TOL - Annual Report 2011

7/31/2019 TOL - Annual Report 2011

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Teths OlAnnal Report


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Inormation regarding

Annual General MeetingThe Annal General Meetng of shareholders of Teths Ol wll be held on

Wednesda 16 Ma 2012, 3 p.m. at Van der Nootska Palatset, S:t Pals-

gatan 21 n Stockholm. The notce and the complete proposals of the

Board of Drectors etc. are avalable at www.tethsol.com. To be enttled

to partcpate, shareholders mst be nclded n the regster of sharehold-

ers mantaned b Eroclear Sweden AB, n ther own names, as of Thrs-

da Ma 10th, 2012 and mst notf Teths Ol no later than Thrsda

Ma 10th, 2012. Accordng to the Swedsh Companes Act, a shareholder

who wshes to attend b prox, mst present a prox n wrtng, dated and

sgned b the shareholder.

Lan

ds

ten

Re

klam

2012

.Des

ign

Henri

kStrm

berg.

Prin

tedinSwe

den.

ContentsANNuAL GENERAL MEETiNG 2

FiNANCiAL iNFORMATiON 2

TETHyS OiL iN BRiEF 3

2011 iN BRiEF 3LETTER TO THE SHAREHOLDERS 4

OPERATiONS 6

RESERVES AND RESOuRCES 7

OMAN 9

LiTHuANiA 15

FRANCE 17

SWEDEN 19

CORPORATE RESPONSiBiLiTy 20

BOARD OF DiRECTORS, MANAGEMENT AND AuDiTORS 22

THE TETHyS OiL SHARE 24

KEy FiNANCiAL DATA 27

ADMiNiSTRATiON REPORT 29

NOTES 43

AuDiTORS REPORT 54

DEFiNiTiONS AND ABBREViATiONS 55

ADDRESSES 56

Financial inormationThe company plans to publish the ollowing nancial reports:

Three month report 2012 (Janar March 2012) on 14 Ma 2012

Six month report 2012 (Janar Jne 2012) on 20 Agst 2012

Nine month report 2012 (Janar September 2012) on 12 November 2012

Year end report 2012 (Janar December 2012) on 11 Febrar 2013


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ethys Oil in brieethys Oil is a Swedish energy company ocused on exploration and production o

oil and natural gas. ethys core area is the Sultanate o Oman, where the company

is the second largest onshore oil and gas concession-holder with licence interests in

three onshore blocks. ethys also has licences onshore France, Lithuania and Swe-

den. Te shares are listed on First North (EY) in Stockholm. Remium AB is

Certied Adviser.

2011 in brieOperational

TethysOilscrudeoilproductionamountedin2011to423,469barrelsFielddevelopmentplanforBlock3and4submittedtotheMinistryofOiland

Gas or approval

DeGoylerandMacNaughtonappointedreservesauditors

Tethys establishes second leg with oil production and appraisal/explorationpotential in three licence areas onshore Lithuania

Financial

Netsales2011amountedtoTSEK 103,538

Duringtheyear,147,228barrelsofoilweresold Resultfor2011amountedtoTSEK 68,991

Resultpershare2011amountedtoSEK2.12

Cashandcashequivalentsasper31December2011amountedtoTSEK 93,105


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Letter to the shareholders

Dear Friends and Investors

In 2011, the total crude oil production from ourOmani assets Blocks 3 and 4 increased from some600hundredbarrelsto8,000barrelsofoilperday.Tethysnet production amounted to some420,000barrelsin2011.Almost50percentoftheproduc -tionwasproducedinthefourthquarter.eoilpro-ductionincreasehascontinuedintherstquarterof2012,whereTethysnetshareamountedto284,481barrelsofoilover40percenthigherthaninthelastquarter2011.

Te operational success is being reected in our

incomestatement.In2011,ourrevenuesincreasedwithover800percentfromMSEK 11toMSEK104.Te cash ow rom operations beore change in work-

ingcapitalamountedtoMSEK 91.Andthestrongoperational perormance resulted in a net income o

MSEK 69.

edrillingprogrammeonBlocks3and4resultedin22wellsin2011,whereof18production/appraisalwells,3waterinjectionwellsand1explorationwell.With two rigs in operations on the Blocks, we have

started2012atanevenhigherpace.OntheFarhaSoutheldonBlock3,atotalof11wellsweredrilled

andcompletedduringthe rstquarterthisyear.Ofthese, ve were exploration/appraisal wells drilledinto the Barik reservoir o previously undrilled ault

blocks resulting in the discovery o three new oil bear-

ing blocks. We now have a total o eleven ault blocks

in production with several more planned to be drilled

in2012.Fourproductionwellsandtwowaterinjec -tions wells were also drilled and completed. Te aver-

age drilling times have come down to less than two

weeks per well.

Te oil rom the Farha South and Saiwan East oil

elds has so ar been produced under the Early Pro-

ductionSystem(EPS).eFieldDevelopmentPlan(FDP),focusedontheFarhaSouthandSaiwanEastoil elds, has been submitted to the Omani govern-

ment or review and approval.

Construction o the permanent acilities is ongo-

ing. Te rst part o the pipeline connecting Farha

South with Saiwan East was completed in February

2012 and has been functioning without interrup-tion. New and larger tanks or oil storage at Saiwan

have been completed as has the laying o the pipeline

connecting Saiwan with the Alam station, the con-

nection point to the national transportation system.

Final installations are in progress and it is expected

that the time plan will hold and that the Saiwan to

Alam part will be operational beore the end o the

secondquarter2012.ecapacityoftheproductionsystemshouldbeabletohandleabout18,000BOPDwith the possibility to upgrade i needed. Te export

pipeline as dimensioned is large enough to allow or a

substantially higher output.

ethys share o the budgeted expenditures, includ-

ing both capex and opex for 2012, amounts toMSEK430.Includedaretheremainingcostsforfacil -itiesandinfrastructure,thedrillingofappraisal/devel -opmentwells, water injection wells aswell as someexplorationwells.Waterinjectionisbeingappliedinthe Farha South eld in order to stabilize production

10

20

30

40

14

28

42

56

70 50

mbbl MSEK

Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011

Sales, mbbl

Sales, MSEK


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and achieve higher recovery actors. A large part o the

budget is expected to be covered rom available cash

and cash ow rom production, however the increasedpacing o the work programme and the act that the

Mitsuicarryhasendedandthatthepartofproductioncash ow relating to cost recovery will be used to repay

Mitsuiforthefullledcarryundertaking,mayresultin a cash owshortfall which mayrequire externaldebtorequitynancing.ApossiblenancingsourcewillofcoursealsobeMitsuithroughthebonuspay-mentofMUSD10payableifwereach10,000bopdalsoaftertheFDPhasbeenapproved.

DeGolyerandMacNaughtonhasconductedareserve/

resourcesauditonBlocks3and4.AsperDecember31,2011,TethysOilsnetworkinginterestofcontin -gentresourcesamountsto2.6millionbarrelsofoil(mmbo)of1Ccontingentresources,9.8 mmboof2Cand12.4of3C.Itisimportanttonotethatthecontingent resources are mainly contingent on a nal-

ized eld development plan and that they only cover

reservoirs on production, or reservoirs that are likely to

beputintoproductionduring2012.Wearehopefulthat the contingent resources soon can be classied as

reserves and that continued drilling and mapping o

theFarhatrendwillincreasethereserve/resourcebase.

Besides our Omani assets, our European leg took a

majorstepforwardwiththeacquisitionofLithuanianinterests in two exploration licences and the ongoing

acquisitionofaproductionlicence.eproduction

on the Gargzdai licence attributable to ethys Oil

amountedintherstquarter2012to14,508barrels,

correspondingto159bopd.TethysOilsshareofthelicences2P reservesamountsto1.7millionbarrels.On this licence, an exploration well is planned to be

spuddedinmidMay2012toinvestigateapreviouslyundrilled Cambrian sandstone prospect as well as the

potentialoftheSilurian/Ordovicianshalesections

On the exploration licences, Rietavas and Raiseiniai,

the reprocessing o existing seismic data is ongoing.

Also,theSilale-1wellontheRietavaslicence,whichowed150bopdfromtheCambrianlayerwhenitwas discovered in the eighties, will be worked over.

ethys is at its strongest point ever operationally.

With producing assets in two countries and signi-

cant exploration potential, we now eel ready to leave

First North behind and aim or a listing on the main

market. It is our intention to apply or a listing on the

NASDAQOMXNordicexchangeassoonaspracti-cal, but certainly within twelve months rom now. So

stay with us

StockholminApril2012

Magnus Nordin Vince Hamilton

Managing Director Chairman o the Board


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Strategy

Investinginupstreamprojectsoerstwomainoppor -tunities to over time achieve superior returns on capital

invested. One is to consistently invest in rank explora-

tion wells and limit the risk through carry agreements

or by keeping absolute investments low by holding

onlysmallinterests.Anotheristonotinvestinaprojectuntilthemainriskelement,thequestionofwhether

Operations

hydrocarbons are present, has been eliminated. Te

risklevelofaprojectistypicallyunderestimatedintheexploration phase and over estimated in the appraisal

phase. By consistently invest primarily in appraisal pro-

jectsitisTethysbeliefthatsuperiorreturnsoncapitalinvested will be achieved over time.

Licences

Country Licence name Tethys Oil, % Total area, km Partners(operator n bold)

Oman Block 15 40% 1,389 Odin Energy, Teths Ol

Oman Block 3,4 30% 33,125 CCED, Mts, Teths Ol

France Attla 40% 1,986 Galli Coz, Teths Ol

France Als 37.5% 215 Tethys Oil, MovOl

Sweden Gotland Strre (ncl Gotland Mndre) 100% 581 Tethys Oil

Lithuania Retavas, Rasena 20% 3,100Odin Energi, Teths Ol,

prvate nvestors

Litauania Gargzda 25% 400Odin Energi, Teths Ol,

GeoNata

Total 40,796

* For uther inormation please see page 29.


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Reserves and Resources

ethys Oils net working interest reserves and

resourcesoilbaseasperDecember31,2011,amountsto1,7millionbarrelsofoil(mmbo)of2P-reserves(provenandprobable)inLithuaniaand9,8mmboof 2Ccontingentresources inOman. ereservesand contingent resources have been audited by inde-

pendent petroleum auditors. In addition, ethys Oil

has conducted an in-house estimate o prospective

resources attributable to available prospects and leads

withintheFarhaSouth3Dareaasatyearend2011.eprospectiveresourcesarerangingfrom3to16mmbo.

Reserves

(Audited)

mmbo 1P 2P 3P

The Gargzda lcense, Lthana 0.7 1.7 3.0

Contingent Resources

(Audited)

mmbo 1C 2C 3C

Blocks 3 and 4, Oman 2.6 9.8 12.4

Prospective resources

(In-house estimate)

mmbo Low case High case

Blocks 3 and 4, Oman 3 16

Te reserve report in Lithuania has been conducted by

independentpetroleumconsultantMillerLents,andthe contingent resources in Oman by independent

petroleumconsultantDeGolyerandMacNaughton.Bothreportshavebeencalculatedusing2007Petro -

leumResourcesManagement System (SPE PRMS)Guidelines o the Society o Petroleum Engineers(SPE), World Petroleum Council (WPC), American

Association o Petroleum Geologists (AAPG) and

Society o Petroleum Evaluation Engineers (SPEE).

Reserves

Te reserves are located on the Gargzdai license in

western Lithuania. ethys Oils share o reserves

is held in accordance to the agreement with Odin

EnergiA/S(Odin).Forfutherinformationpleaseseepage29.ereservesarecalculatedonthebasisofthereservesfromtheMillerLentsreviewasperJanu-

ary1,2011,reducedwiththeoperatorsnumbersofaggregatedproductionfor2011.

Contingent Resources

econtingentresourcesarelocatedonBlock3and4onshore Oman. Te contingent resources are mainly

contingent on a nalized eld development plan

(FDP).AnFDPhasbeensubmittedtotheOmaniMinistry of Oil and Gas. In theirreport, eectiveDecember31,2011,D&Mhasestimatedthecon -tingentresourcesintheBariklayerinBlock3andthe Khufai layerin Block4. eestimates are alsolimited to reservoirs on production, or reservoirs that

arelikelytobeputintoproductionduring2012inFault Blocks that have been penetrated by producing

wells. Further extensions o the production layers as

well as other reservoirs on the licensed Blocks that did

not have production were not included.

Prospective Resources

In addition, ethys holds prospective resources along

the Farha rend on the Farha South oil eld on Block

3. e prospective resourcesis an in-house estima-tion using ethys volumetrics on prospects and leads

withintheFarhaSouth3Dareamappedasatyearend2011.e recovery factors applied arederivedfrom the D&M Farha South contingent resource

report. Te estimates have been limited to prospectsandleadsthatarelikelytobeexploredduring2012.Further extensions o the Farha trend as well as other

prospectsandleadsoutsidetheFarhaSouth3Dareahave not been included.

About Contingent and Prospective

Resources

ContingentResourcesarethosequantitiesofpetro-leum estimated, as o a given date, to be potentially

recoverable rom known accumulations using estab-

lished technology or technology under development,

but which are not currently considered to be commer-cially recoverable due to one or more contingencies.

ProspectiveResourcesarethosequantitiesofpetro-leum estimated, as o a given date, to be potentially

recoverable rom undiscovered accumulations by

application of future development projects. Pro-spective resources have both an associated chance o

discovery and a chance o development. Prospective

Resources are urther subdivided in accordance with

the level o certainty associated with recoverable esti-

mates assuming their discovery and development and

maybesub-classiedbasedonprojectmaturity.


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Oman is Tethys Oils core area and

Tethys has interests in three onshore

licences covering an area o around30,000 square kilometres, which

makes Tethys Oil one o the largest

onshore oil and gas concession-holder

in Oman. For detailed inormation

regarding partners and interests please

see the table on page 29.

The Sultanate o Oman

Te Sultanate o Oman is located on the

tip o the eastern Arabian Peninsula, neigh-

bouringUnitedArabEmiratesinthenorth -west, Saudi Arabia in the west and Yemen

in the southwest. Te coast is ormed by

the Arabian Sea on the south and east and

the Gul o Oman on the northeast, with

acoastlineof2,092kilometres.Omancov-ers anareaof 212,460 square kilometers.ecapitalis Muscat and the populationamountsto3.0millions.Omanhasabout5.5billionbarrelsofprovenoilreservesandtheproductionin2010amountedtoabout865,000 bopd. (Source: Nationalencyklopedin andBP Statistical Review 2011)

Block 3 and 4

Block 3 and 4 is situated in the easternpart o Oman and covers a combined area

ofabout30,000squarekilometres.Tethyshas a 30 per cent interest in the Blocks.Te current drilling program was launched

in2009,withanEarlyProductionSystemimplemented in order to conduct a long

term production test on both blocks in

2010.TethysOilsshareoftheproduction

in2011amountedto423,469barrelsofoil.

Work program

22newwells,including18production&appraisal wells, were drilled on the Blocks in

2011.erearetwodrillingsrigsinopera-tion currently working the Farha trend on

Block3,focusingonexpandingintonewault blocks, as well as drilling new produc-

tion and water injection wells in alreadyproducing areas.

Te work on a more permanent system is

making good progress with several majorunits constructed. A new pipeline connect-

ing the Farha South oil eld with the pro-

duction acilities at the East Saiwan oil eld

Oman

Muscat

islamc

Repblc o

iran

Gulf of Oman

Arabian Gulf

unted Arab

Emrates

3

15

4

Sltanate o

Oman

Kngdom o

Sad Araba

4

has been launched. A Field DevelopmentPlan has been submitted to the Omani gov-

ernment or review and approval.

Early production system

Inthethirdquarterof2010,anEarlyPro -duction System (EPS) or a long term

production test o the Blocks was launched.Production continues to increase and is in

rstquarter2012averagingabout10,000barrels o oil per day, o which ethys share

amountsto30percent.

Exploring the Unconventional Potential

In2009,atestwasconductedtoverifythemobility o the heavy oil on Saiwan East on

Block4.Liquidsampleswereobtainedfromthree o the our zones tested. ethys believes

that the results are cautiously encouraging,

however any potential production o heavy

oilinSaiwanEastwillrequireenhancedoilrecoverytechniques.

Block 15

Block 15 issituated inthe northwesternpart o central Oman and covers a area o

about 1,400 square kilometres. Two wellshave been drilled since ethys entered the

licence. e Jebel Aswad-1 (JAS-1) wellwasdrilledin2007.Upontesting,itowed

11.03mmcfpdofgasand793bopdofcon-densate(totalof2,626boepd).eJAS-2well,drilledin2008,showedthesamelogresponsewhilstdrillingas theJAS-1,how-ever, the JAS-2 well tested only water. In2008, a 3D seismic survey covering 285squarekilometresoftheJebelAswadstruc -ture was conducted.

Work program

e main eorts on Block 15 is focusedon nding the most economic method o

putting theJAS-1 wellin production. An

extensionofthe3Dseismicsurveyshotin2008isalsoplannedbeforedrillingactivi-ties will resume.


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Exploratory wells

Technical status

Ongoing

Suspended

Abandoned

Result

Oil

Gas

Oil shows

Gas shows

Oil and Gas


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12/5612


13/5613


14/5614

Pho

to:

Viln

ius

Sunse

tby

jaime.s

ilva(

fickr)


15/5615

Lithuania

Tethys Oil holds interests in three Lithu-

anian licences. All licences are onshore

and cover some 4,000 square kilome-

tres o the Baltic Sedimentary Basin.

For detailed inormation regardingpartners and interests please see the

table on page 29.

The Gargzdai licence

Te Gargzdai licence is located in western

Lithuania. Te daily production amounts to

about700barrelsofaround42degreeAPI

oil.Intotal,15millionbarrelsofoilhavebeen produced rom Cambrian sandstonereservoirs. Te Gargzdai licences proven

andprobableoilreservesareinexcessof6million barrels according to independent

petroleumconsultantMillerLentsestimatefromMay2011.Proven,probableandpos-siblereservesamounttomorethan12mil -lion barrels. A reservoir study made on the

licence area suggests that the reserves could

be signicantly increased with the use o

modernalternativeoilrecoverytechniques.Te licence also holds signicant uncon-

ventional hydrocarbon potential, includ-

ing exposure to Silurian/Ordovician shalesections.

The Rietavas licence

Te Rietavas licence is located close to the

Gargzdai licence, with a known oil discov-

ery in the Cambrian sandstones, the same

reservoir layer which is in production inGargzdai. Te Rietavas licence is or the

momentquiteunexplored.

The Raiseiniai licence

Te Raiseiniai licence covers a so ar unex-

plored trend o Silurian rees similar to, but

expected to be o larger size, to the Ordovi-

cianreefsfoundonGotland.eSilurian/Ordovician shale section is present also in

the Rietavas and Raiseiniai licences.

Baltic Sea

LATVIA

BELARUS

LITHUANIA

POLAND

KALININGRAD

(RUSSIA)

Vilnius

GARGZDAI RIETAVAS

RAISEINIAI


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France

Tethys has interests in two French

licences. The licence Permis du Bassin

DAls, an exploration and production

licence in the Als basin in southern

France. The Attila licence is located in

the oil and gas producing Paris basin,

some 250 kilometres east o Paris. For

detailed inormation regarding part-

ners and interests please see the table

on page 29.

The Attila licence

One well has been drilled on the Attila

licence.Tethysobjectivewastondnatu-ralgasaccumulations.PLM-2spuddedin2007,andthewellwasdrilledtoadepthof1,310metres.Duringdrilling,gasshowswere recorded and wireline logging con-

rmed the indications o gas, but the well

testedonlyaminorgasows.ePLM-2

well is not commercial in its current state.

Permis du Bassin DAls

elicenceareacoverstheMaruejolsheavyoil eld. Te eld is delineated by nine

wells and has produced small amounts o

14degreeAPIoil.elicencealsocoversatleast two prospects with potential or con-

ventionaloilatrespectivedepthsof1,400and2,000metres.

A easibility study o a heavy oil eld on the

license has been launched, with a view to

recommend the most suitable pilot produc-

tions system.

Atlantic Ocean

Mediterranean Sea

SPAIN

ITALY

SWITZERLAND

BELGIUM

Paris

Marseille

FRANCE

ATTILA

BASSIN DALES


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Pho

to:

Clou

dre

fec

tions,

Go

tlan

d,

Swe

de

nby

Ben

124

.(fickr)


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Sweden

Tethys holds two licences in Sweden

called Gotland Strre (Greater Gotland)and Gotland Mindre. The licences cov-

ers an area o about 581 square kilo-

metres over the northern part o the

Baltic island Gotland. For detailed inor-

mation regarding partners and inter-

ests please see the table on page 29.

Gotland Strre

GotlandStrrecoversanareaofaround556squarekilometres.Oilhaspreviouslybeenproduced rom ree structures on Gotland,

proving the existence o a viable petroleum

system within the licence area. ethys has

conducted a comprehensive study o the

existing data over the licence. More than300kmofseismicdatahasbeendigitalizedand reprocessed with modern computer

technology. A soil sampling survey over

parts o its licence area has also been con-

ducted.Sofarsome10potentiallocationsor exploratory drilling have been identied.

Gotland Mindre

ethys Oil was awarded the licence area oGotland Mindre in February 2011 goingthree years orward. Te area is situated

within our Gotland Strre licence with an

areacoveringaround25squarekilometres.Te licence is set within a similar geologi-

cal environment as Gotland Strre, and has

been the ground on which a number o suc-

cessul wells were drilled in the past.

NASAGo

ddard

Pho

toan

dVideo


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Corporate ResponsibilityPolicy statement

Like everything else, ethys Oil, its employ-ees, customers, partners and shareholders

are part o our common society and envi-

ronment. We, as individuals or companies

mayfromtimetotimeoperateindierentpositions and play dierent roles but weare always a part o the society, at large or

local, and our undamental dependence on

our common environment never goes away.

Being an oil company ethys Oil knows this

only too well, because the business o an oil

company by denition impacts the environ-

ment. It is not possible to extract raw mate-

rials rom the earth without in some way

aectingtheareawheretheextractiontakesplace. And this o course is true not only or

the physical environment but also or the

human environment where oil is ound and

produced.

As long as there is a demand or the prod-ucts that oil companies bring to market to

satisy that demand there will also be oil

companies carrying out this business. And

here lies a great opportunity. o look or

and try to nd and produce oil and natural

gas is challenging in its own right, but an

equallyspurringchallengeistodothisinacost efcient minimum impact way. ethys

Oilwillstrivetousetechniquesandmeth-odology that is the most efcient rom an

environmental impact point o view.

In practice ethys Oil has not and will not

embark on any major industrial activitywithout commissioning appropriate health,

saety, environmental and social (HSES)

studies from suitable experts. Acquiredassets not operated by ethys Oil are and

will be independently reviewed by ethysOil out o a HSES perspective and ethys

Oil will closely monitor any contractor or

operator. Wherever changes can be avour-

ably employed such will be recommended.

Mostcountriestodayhavestrongenviron-mental laws and standards which o course

are a great help to an oil company in assur-

ing correct practices are ollowed. However,

ethys Oil will aim to ollow best available

practices under all circumstances even i this

will go beyond local laws.

o conclude, ethys Oil will always be

aware that it is part o our common society

and our environment and will do its utmost

to act responsible.


21/5621

Case studies

Denmark Karlebo well rom an

HSES perspectiveeKarlebowellwasdrilledinthevicinityoftheDanishvillageofthesamename,northo Copenhagen. Te drilling commenced

inautumnof2006withTethysasoperator.Prior to planning the well an environmental

screening report was conducted so as to iden-

tiy site-specic risks and hazards. In order to

be open the local community, ethys Oil pro-

videdcontinuousinformationontheKarlebowell operations beore and during the drilling.

Public meetings were held beore the drilling

equipmentarrived.Duringdrillinganinfor -mation cabin was open daily, as well as anobservatory at the well site. Even an Internet

webcam was installed to allow people to see

the activity as it happened. Coordination was

made with local school, church and kinder-

garten in order or them to be aware. Special

trafc measures to protect sot trafc were

put in place, and special hours and speed

limitsforheavytrucktracwereset.Eortsto reduce impact on nearest neighbour were

made, especially to reduce noise pollution

caused by the drilling rig. Te well site loca-

tion was ully asphalted to prevent any soil

pollution. Tere were no underground pits

or drilling uids, instead metal tanks were

used. Cuttings and drilling uids have been

taken away rom site to a sae processing

and treatment acility. Te drill site was alsoselcontained or drainage o rain water and

other uids, and an oil skimmer was installed

between site drainage and public sewer but

was never needed to be used.

Oman Water is lie!

Good drinking water is scarce in the deserts

o Oman. So when good clean and abun-

dant drinkingwater was discovered at60metres whilst drilling or oil west o Ibri in

northwestern Oman, the Department of

WaterandElectricitywasquicktodevelopand distribute this important resource. TeAlMassarratwatercatchmentareaincludesmostofBlock15in itsboundary,andthisimportant fresh water aquifer suppliesthousands o inhabitants with clean drink-

ing water every day. Te inner core o the

AlMassarratwatercatchmentareastraddlestheJebelAswadstructureandthereareclearand unambiguous rules on what type o

activitiesareallowedinsidetheAlMassarratwater protection zone.

TethysOilre-enteredtheJebelAswadwellin2007understrictsurveillancebytheAlMassarat water protection team. A zerodischargepolicywasineectandallareas

where spills were likely had to be covered

with an impermeable membrane. Addition-ally, all potentially contaminated soils and

gravel were collected and transported to

registered hazardous waste sites. In addition

to adhering to a strict emission standard,

two water observation wells were drilled,

one upstream and one downstream o the

re-entry site. Weekly samples were taken

and analysed or pollutants by the Water

Department as well as Tethys Oils thirdparty Environmental Consultant Al Saa.

After80daysofdrillingandproducingwelluids and ater moving thousands o tonnesofequipmentandsupplies,therewerenoenvironmental problems. At the end o

the drilling operations, Al Saa conducted

a Legacy Investigation on the site where

several ve metres deep boreholes were

drilled in multiple areas o the site to exam-

ine the subsoil or pollutants. Te site was

given a clean bill o health.

Te water well that was drilled to supply

the drilling operations with water has now

beenhandedovertotheAlMassarratwaterDepartmentsothatthewellcancontinueto provide good clean drinking water to the

inhabitants o Ibri.

The driling o Karlebo-1, Autumn 2006


22/5622

Vincent Hamilton, John Hoey, Hkan Ehrenblad, Magnus Nordin, Jan Risberg.

Vincent Hamilton,

bornin1963.ChiefOperatingOcerandChairmanoftheBoardsince2004(mem-ber of the Board since 2001). Education:Master of Science in Geology, ColoradoSchool of Mines in Golden, Colorado.Geologist Shell, 19891991. GeologistEurocan, 19911994. President of Cana-dianIndustrialMinerals,19941995.Gen-eralManagerofSandsPetroleumUKLtd.,

19951998. President of Mart Resources,19992001. Board member of AladdinMiddleEastLtd.Number o shares in ethys Oil: 2,326,955

Magnus Nordin,

bornin1956.ChiefExecutiveOcerandMemberoftheBoardsince2001.Educa-tion:BachelorofArts,LundUniversityandMaster of Arts, University of Californiain Los Angeles, Caliornia. CEO o Sands

Petroleum,19931998.DeputyCEOLun-dinOil1998-2000,Headofinvestorrela-tions20012004,(actingCEO)VostokOilLtd. October 20022003, CEO of Sodra

Petroleum 19982000. Board member ofMinotaurusAB,MinotaurusEnergiASochCassandra Oil AB.

Number o shares in ethys Oil: 1,459,127

John Hoey,

bornin1939.Memberoftheboardsince2001. Education: Bachelor of Science inMechanical Engineering, University ofNotreDame,IndianaandMBA,HarvardUniversity, Boston, Massachusetts. Mr.Hoey has a management background in

corporate nance and energy sector. Presi-

dent and Director of Hondo Oil & GasCo,19931998.PresidentandDirectorof

Atlantic Petroleum Corp. o Pennsylvania,

19851992. Various executive positionsin commercial and investment banking in

SaudiArabia,EnglandandtheUSAwith

Board o directors, management and

Board o directors


23/5623

Arab and American nancial institutions,

1972-1984.Co-founderofVietNamHold-ingLtd.andChairmanofMundoroCapitalInc.

Number o shares in ethys Oil: 821,393

Hkan Ehrenblad,

bornin1939.Memberoftheboardsince

2003. Education: Mechanical engineerHTLS, Chemical/Paper manufacturingRoyal Institute o echnology, Stockholm,

PED from the Institute for Management

Development (IMD), Lausanne, Switzer-land.VariousexecutivepositionsatBonnierMagazineGroupuntil1984.Mr.Ehrenbladhas been a pioneer in the elds o inorma-

tion concerning computer and internet

security, and has published several books.

Mr.Ehrenbladisactiveinpublishingandmedia and is also an active investor. Board

member o anganyika Oil Company Ltd.

until2008.

Number o shares in ethys Oil: 311,336

Jan Risberg,

bornin1964.Memberoftheboardsince2004.Mr.Risberghasseveralyearsofexpe-rience from the nancial sector. Variousposition within Aros Securities department

o Corporate Finance, at Enskilda Securi-

ties department o Corporate Finance, and

as Manager of Ledstiernan ABs Londonbranch. Mr. Risberg is today acting inde-pendently in the nancial sector.

Number o shares in ethys Oil:838,419

Magnus Nordin,

ManagingDirector

Vincent Hamilton,Chie Operating Ofcer

Morgan Sadarangani,

born in 1975. Chief Financial Ocer.Employed since January 2004. Education:Masterof EconomicsinBusinessAdministra-tion,UniversityofUppsala.Dierentpositionswithin SEB and Enskilda Securities, Corporate

Finance,19982002.Number o shares in ethys Oil: 139,200

Johan Rippe,

bornin1968.AuthorizedPublicAccountant,Leadpartner. Companys auditor since2007.

PricewaterhouseCoopers AB, Gothenburg

Johan Malmqvist,

bornin1975,AuthorizedPublicAccountant.Companys auditor since 2010. Pricewater-houseCoopers AB, Gothenburg

Management Auditors

Morgan Sadarangani, Johan Rippe, Johan Malmqvist.

auditors


24/5624

Te ethys Oil shareTethysOilssharesandoutstandingwarrantsarelistedonFirstNorth,whichisoperatedbyNASDAQOMX.First North is a sponsor based marketplace, which means that each company that is admitted to trading must

have an agreement with a Certied Adviser. Te Certied Adviser ensures that the company meets the admissionrequirementsandthecontinuousobligationsassociatedwithhavingsharesadmittedtotradingonFirstNorth.Furthermore, the Certied Adviser constantly monitors the companys compliance with the rules and immedi-

ately reports to the exchange i there should be a breach o the rules. ethys Oil has been listed on First North

anditspredecessorNyaMarknadensinceApril2004.RemiumABisthecompanysCertiedAdviser.WiththepurposeofimprovingliquidityandreducingthespreadbetweenbuyersandsellersofTethysOilshares,thecompanyhasassignedhmanFondkommissionABtoactasaliquidityproviderforthesharesofthecompany.

Shares and warrants outstanding

TethysOilsregisteredsharecapitalat31December2011amountstoSEK 5,423,958representedby32,543,750shareswithaquotavalueofSEK 0.17.

AllsharesinTethysOilrepresentonevoteeach.Alloutstandingsharesarecommonsharesandcarryequalrightsto participation in ethys Oils assets and earnings. ethys Oil does not have an incentive program or employ-

ees.Asper31December2011theBoardofDirectorshadremainingoutstandingauthorizationfromtheAGMtoissueupto10percentofthesharesupuntilthenextAGM.

Asper1January2011,TethysOilhad32,504,489shares.In2011,TethysOilconductedashareissueinkindrelatedtotheacquisitionoftheAlspermitinFrance.eshareissuewasregisteredinJune2011andthenumberofsharesamountedto39,261andtransferredtoprivateSwisscompanyMouvOilS.A.aspartoftheconsideration.

Share capital development

SincethecompanysinceptioninSeptember2001andupto31December2011theparentcompanyssharecapitalhasdevelopedasshownbelow:

Year

Share capital

development

Quota

value,

SEK

Change in

number o

shares

Total number

o shares

Change in

total share

capital, SEK

Total share

capital, SEK

2001 Formaton o the Compan 100.00 1,000 1,000 100,000 100,000

2001 Share sse 100.00 4,000 5,000 400,000 500,000

2001 Splt 100:1 1.00 495,000 500,000 500,000

2003 Share sse 1.00 250,000 750,000 250,000 750,000

2004 Splt 2:1 0.50 750,000 1,500,000 750,000

2004 Share sse 0.50 2,884,800 4,384,800 1,442,400 2,192,400

2006 Share sse 0.50 400,000 4,784,800 200,000 2,392,400

2006 Non-cash sse 0.50 876,960 5,661,760 438,480 2,830,880

2006 Share sse 0.50 80,000 5,741,760 40,000 2,870,880

2007 Share sse 0.50 300,000 6,041,760 150,000 3,020,880

2007 Exercse o warrants 0.50 2 6,041,762 1 3,020,881

2007 Share sse 0.50 125,000 6,166,762 62,500 3,083,381

2007 Set-o sse 0.50 226,000 6,392,762 113,000 3,196,381

2008 Splt 3:1 0.17 12,785,524 19,178,286

2008 Share sse 0.17 4,800,000 23,978,286 800,000 3,996,381

2008 Exercse o warrants 0.17 1,800 23,980,086 300 3,996,681

2009 Share sse 0.17 1,300,000 25,280,086 216,667 4,213,348

2009 Share sse 0.17 2,000,000 27,280,086 333,333 4,546,618

2009 Exercse o warrants 0.17 176,186 27,456,272 29,364 4,576,045





2010 Share sse 0.17 250,000 29,443,542 41,667 4,907,257

2010 Share sse 0.17 250,000 29,693,542 41,667 4,948,924




2010 Exercse o warrants 0.17 2,057,653 32,504,489 342,942 5,417,415

2011 Non-cash sse 0.17 39,261 32,543,750 6,544 5,423,958


25/5625

Dividend policy

ethys Oil has, since the oundation o the company, not paid any dividends. Future dividends are dependent

o the uture result o ethys Oil. In the event o uture generated income, dividends can be paid i other condi-tions o the company allows. Te size o uture dividends will be determined by the companys nancial position

and growth opportunities by protable investments.

Share ownership structure

e20largestshareholdersinTethysOilasper30March2012.

Name Number o shares Capital and votes

Sx Ss AG 8,262,731 25.4%

Vncent Hamlton * 2,326,955 7.2%

Magns Nordn *,** 1,459,127 4.5%

BK Jls Baer & Co Sweden 1,283,417 3.9%

uBS (Lxemborg) SA 1,200,000 3.7%

MZ investments 980,000 3.0%

Pctet & Ce 863,580 2.7%

Jan Rsberg 838,419 2.6%

John Hoe * 821,393 2.5%

Avanza Penson 751,093 2.3%

BNy Mellon SA/NV 655,092 2.0%

ML, Perce, Fenner & Smth inc. 606,990 1.9%

BNP Parbas (Ssse) S.A. 543,513 1.7%

Nordnet Pensonsrskrng AB 489,759 1.5%

Maha Resorces LTD 446,996 1.4%

Grebbeshlt Holdng AB 406,800 1.3%

Bo-Axel Johnson 402,000 1.2%

Svenska Handelsbanken SA 399,450 1.2%

OZ Master Fnd LTD 329,980 1.0%

Skandnavska Ensk Banken Copenhagen 324,000 1.0%

Total, 20 largest shareholders 23,391,295 71.9%

Other approx 1,900 shareholders 9,152,455 28.1%

Total 32,543,750 100.0%

Source: Euroclear Sweden AB and ethys Oil AB

* Trough company** Incl 60,000 shares lent to hman Fondkommission AB

Distribution o shareholdings

DistributionofshareholdingsinTethysOilasper30March2012.

Size categories as o

30 March 2012 Number o shares

Percentage

o shares, %

Number o

shareholders

Percentage o

shareholders, %

1 1,500 570,585 1.75% 1,347 69.76%

1,501 30,000 3,440,469 10.57% 509 26.36%

30,001 150,000 3,668,600 11.27% 50 2.59%

150,001 300,000 551,560 1.69% 3 0.16%

300,001 24,312,536 74.71% 22 1.14%

Total 32,543,750 100.0% 1,931 100.0%

Source: Euroclear Sweden AB and ethys Oil AB


26/5626

Share price development and turnover 1 November 2010 16 March 2012

Share price development and turnover since inception, 6 April 2004 16 March 2012

Share statistics 2011

Te shares in ethys Oil are traded on First North in Stockholm.

Tcker name TETy

year hgh 70.00 (13 Janar 2011)

year low 26.00 (9 Agst 2011)

Average trnover per da, shares 24,321

Perod trnover, shares 6,153,251

Source: First North

SEK

20

40

60

400

800

1200

Share volume, thousands

MarJan

2012

NovSepJulMayMarJan

2011

Nov

2010

20112010200920082007200620052004

SEK

10

20

30

40

50

300

600

900

1200

1500

60 1800

2012

Share volume, thousands


27/5627

Group 2011 2010 2009 2008 2007

Items regarding the income statement and balance sheet

Gross margn, TSEK n.a. n.a. n.a. n.a. n.a.

Operatng reslt, TSEK 83,057 100,661 -28,985 -31,748 -23,533

Operatng margn, % 80.22% n.a. n.a. n.a. n.a.

Reslt beore tax, TSEK 69,114 80,144 -42,446 -16,395 -24,704

Net reslt, TSEK 68,991 80,069 -42,503 -16,426 -24,721

Net margn, % 66.63% n.a. n.a. n.a. n.a.

Shareholders' eqt, TSEK 455,559 380,055 202,770 177,077 103,196

Balance sheet total, TSEK 464,862 384,069 222,680 179,909 105,586

Capital structure

Eqt rato, % 98.00% 98.95% 91.06% 98.43% 97.74%

Leverage rato, % n.a. n.a. n.a. n.a. n.a.

Adjsted eqt rato, % 98.00% 98.95% 91.06% 98.43% 97.74%

interest coverage rato, % n.a. n.a. n.a. n.a. n.a.

investments, TSEK 208,392 28,832 81,681 72,512 51,765

Protability

Retrn on shareholders' eqt, % 15.14% 21.07% neg. neg. neg.

Retrn on captal emploed, % 16.25% 20.85% neg. neg. neg.

Employees

Average nmber o emploees 12 9 10 10 9

Number o shares

Dvdend per share, SEK n.a. n.a. n.a. n.a. n.a.

Cash ow rom operatons per share, SEK 3.49 5.97 neg. neg. neg.

Nmber o shares at ear end, thosands 32,544 32,504 28,049 23,980 19,179

Shareholders' eqt per share, SEK 14.00 11.69 7.23 7.38 5.38

Weghted nmber o shares or the ear, thosands 32,521 30,849 26,274 22,669 17,592

Earnngs per share, SEK 2.12 2.60 -1.62 -0.72 -1.41

Denitions o key ratios

MarginsGross marginOperating result beore depreciation as a percentage o yearlyturnover.

Operating marginOperating result as a percentage o yearly turnover.

Net marginNet result as a percentage o yearly turnover.

Capital structureEquity ratioShareholdersequityasapercentageoftotalassets.

Leverage ratioInterestbearingliabilitiesasapercentageofshareholdersequity.

Adjusted equity ratioShareholdersequityplusequitypartofuntaxedreservesasapercentage o total assets.

Interest coverage ratioResult beore taxes plus nancial costs as a percentage o nan-cial costs.

Key fnancial data


28/5628

Parent 2011 2010 2009 2008 2007

Items regarding the income statement and balance sheet

Gross margn, TSEK n.a. n.a. n.a. n.a. n.a.

Operatng reslt, TSEK -7,318 -5,366 -5,366 -6,853 -3,996

Operatng margn, % n.a n.a. n.a. n.a. n.a.

Reslt beore tax, TSEK -14,669 -18,717 -30,327 -12,389 -22,558

Net reslt, TSEK -14,669 -31,903 -30,327 -12,389 -22,558

Net margn, % n.a n.a. n.a. n.a. n.a.

Shareholders' eqt, TSEK 249,960 262,901 226,005 187,035 113,197

Balance sheet total, TSEK 302,657 314,746 226,800 188,409 115,179

Capital structure

Eqt rato, % 82.59% 83.53% 99.65% 99.27% 98.28%

Leverage rato, % n.a. n.a. n.a. n.a. n.a.

Adjsted eqt rato, % 82.59% 83.53% 99.65% 99.27% 98.28%

interest coverage rato, % n.a. n.a. n.a. n.a. n.a.

investments, TSEK 47,888 71,982 62,999 82,755 21,887

Protability

Retrn on shareholders' eqt, % neg. neg. neg. neg. neg.

Retrn on captal emploed, % neg. neg. neg. neg. neg.

Employees

Average nmber o emploees 6 6 6 5 5

Number o shares

Dvdend per share, SEK n.a. n.a. n.a. n.a. n.a.

Cash ow rom operatons per share, SEK neg. 0.11 neg. neg. neg.

Nmber o shares at ear end, thosands 32,544 32,504 28,049 23,980 19,179

Shareholders' eqt per share, SEK 7.68 8.09 8.06 7.80 5.90

Weghted nmber o shares or the ear, thosands 32,521 30,849 26,274 22,669 17,592

Earnngs per share, SEK -0.45 -1.03 -1.15 -0.55 -1.28

Investmentsotal investments during the year.

ProtabilityReturn on shareholders equityNetresultaspercentageofshareholdersequity.

Return on capital employedNet result as a percentage o average capital employed (totalassets less non interests-bearing liabilities).

OtherNumber of employeesAverage number o employees ull-time.

Shareholders equity per shareShareholders equity divided by the number of outstandingshares.

Weighted numbers of sharesWeighted number o shares during the year.

Earnings per shareNet result divided by the number o outstanding shares.

n.a.Not applicable.


29/5629

Administration report(An English translation o the Swedish original)

Te administration report o the ethys Oil Group

(hereater reerred to as ethys Oil or the Group),

where ethys Oil AB (publ) (the Company) with

organisational number 556615-8266 is the parentcompany, is hereby presented or the twelve months

periodended31December2011.eamountsrelat-ingtothecomparativeperiod(equivalentperiodoflast year) are shown in parenthesis ater the amount

or the current period. Segments o the Group aregeographical markets.

OPERATIONS

ethys Oil is a Swedish company, which together

with subsidiaries is ocused on exploration or and

production o oil and natural gas. ethys Oil aims to

maintainawellbalancedportfolio ofhighrisk/high

Country Licence name Tethys Oil, % Total area, km Partners (operator n bold)

Oman Block 15 40% 1,389 Odin Energi, Teths Ol

Oman Block 3,4 30% 33,125 CCED, Mts, Teths Ol

France Attla 40% 1,986 Galli Coz, Teths Ol

France Als 37.5% 215 Tethys Oil, MovOl

Sweden Gotland Strre and

Gotland Mndre

100% 581 Tethys Oil

Lithuania* Retavas, Rasena 20% 3,100 Odin Energi, Teths Ol, prvate nvestors

Lithuania* Gargzda 25% 400 Odin Energi, Teths Ol, GeoNata

Total 40,796

* ethys interests in Lithuania are held together with Odin Energi AS (Odin) through Odin group companies giving ethys a net indirect interesto 25% in UAB Minijos Nata (MN) and 20% in UAB LL Investicos (LLI). MN holds the Gargzdai license and LLI holds the Rietavas andRaiseiniai licenses. ethys has received newly issued shares in an Odin group company or the holding o LLI. In order to enable the transer o sharesin Odin group companies or ethys holding in MN, a reconstruction o the Odin group is ongoing.

reward exploration opportunities coupled with lower

risk exploration and appraisal development assets. Te

companysstrategyistwofold:toexploreforoilandnatural gas near existing and developing markets; and

to develop proven reserves that have previously been

sub-economic due to location or technological rea-

sons.Asatyearend2011thecompanyhadinterestsin Oman, France, Sweden and Lithuania.

Production

TethysOilsproductionin2011comesfromFarhaSouthandSaiwanEastoileldsonBlock3andBlock4locatedonshoreOman.eproductionisunderan Early Production System (EPS) with temporary

acilities. Te production rates rom the EPS vary

depending on both the test programme design as well

as on transport and acility capacity.

Tethys Oil AB (publ)

Tethys OilSpain AB

Tethys OilTurkey AB

Tethys OilExploration AB

Tethys OilDenmark AB

Tethys OilFrance AB

Tethys OilCanada AB

Tethys Oil

Canada Ltd.

100% 100%

100%

Lundin Data

Services B.V.

100%

100% 100% 100% 100%

Tethys OilSuisse S.A.

100% 100% 100% 40%100%

WindsorPetroleum(Spain) Inc.

Tethys OilOman Ltd.

Tethys OilBlock 3&4 Ltd.

JyllandsOlie ApS


30/5630

estrongnancialperformanceduring2011isaconsequenceoftheincreasedproductionduringtheyear. Cash ow rom operations amounted during

2011toTSEK 113,604(TSEK -36,770).Cashowfromoperationshas furtherincreaseddueto Mitsuiunding productions costs in accordance with the ar-

mout agreement.

eresultforthefullyear2011hasbeenimpactedbynet oreign exchange losses. Te currency exchange

eectofthegroupamountstoTSEK -14,236and

almostalloftheeectrelatestotheweakerUSdol-lar in relation to the Swedish krona on intercompanyloans denominated in US dollars. ese currencytranslationdierencesbetweentheparentcompanyand subsidiaries are non cash related items. Te cur-

rencyexchange eectis part ofnet nancialresultamountingtoTSEK -13,943forthefullyear2011.

Tere have been no write downs o oil and gas prop-

ertiesforthefullyear2011(TSEK 311).Cashowrom operations beore changes in working capital

duringthefullyear2011amountedtoTSEK 91,277(TSEK -1,944).

Tere has been no depletion o oil and gas properties. In

accordance with the Accounting Principles, ethys Oil

will present depletion o oil and gas properties when

Avarage daily production 2011

eelddailyproductionhasincreasedduring2011andamountedinDecember2011toaround8,000barrels o oil per day, o which ethys Oils share is

30percent.

Net sales

During full year 2011, Tethys Oil sold 147,228(18,898)barrelsofoilaftergovernmenttakefromtheEarlyProductionSystemonBlock3and4inOman.isresultedinnetsalesduringthefullyear2011of

TSEK 103,538(TSEK 11,066).eaveragesellingpriceperbarrelamountedtoUSD107.37perbarrelduringthefullyear2011.

Te increase o net sales during the year reects the

increaseinproductionandthemorefrequentliftings.

Result

TethysOilreportsaresultforthefullyear2011ofTSEK 68,991(TSEK 80,069forlastyear),represent-ingearningspershareofSEK 2.12(SEK 2.60)forthefullyear2011.ecomparableresultforthefullyearperiod2010waspositivelyimpactedbythefar -

mouttoMitsuiaddingTSEK 103,236totheresult.Increased oil sales have positively impacted the result

o the year.

Quarterly volumes, beore government take Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010

Total quarterly production, (bbl)

Prodcton 659,720 474,349 215,283 62,214 108,957

Average dal prodcton 7,171 5,156 2,366 691 1,184

Tethys share o quarterly production, (bbl)

Prodcton 197,916 142,304 64,585 18,664 32,687

Average dal prodcton 2,151 1,547 710 207 355

2

4

6

8

Tethys Oils share of average daily production, mbbl

Other 70%

DecNovOctSepAugJulJunMayAprMarFebJan


31/5631

reserves are established or when the company is a com-

mercial production phase.

Administrativeexpensesamounted toTSEK 20,443(TSEK 15,247)forthefullyear2011.DepreciationamountedtoTSEK 693(TSEK 348)forthefullyearperiod. Administrative expenses are mainly salaries,

rents,listingcostsandoutsideservices.Depreciationisreferabletooceequipment.eadministrativeexpenditures during the full year 2011 are highercomparedwiththeequivalentperiodlastyear,mainlydue to increased activity and more employees. Part o

the administrative expenses are capitalised in the sub-

sidiaries and i ethys is the operator theses expensesare unded by partners. In the consolidated income

statement these internal transactions are eliminated.

Duringthe latterpartof 2011,TethysOilacquiredthecompanyLundinDataServicesBVwhichownsand maintains a substantial oil and gas database

locatedinDubai.

Oil and gas properties

ethys Oil has interests in licences in Oman, France,

Sweden and Lithuania.

Oil and gas properties as at 31 December 2011amounted to TSEK 206,651 (TSEK 170,135).InvestmentsinoilandgaspropertiesofTSEK 44,375(TSEK 27,428)wereincurredforthetwelvemonthperiodending31December2011.

Block 3 and 4

Intotal,22wellsweredrilledonthetwoBlocksin2011,whereof18production/appraisalwells,3waterinjectionwellsand1explorationwell.Ahorizontalsidetracking in an old well has also been drilled. Work

overhavealsobeenconductedon3wells.

Te total production rom the Farha South and the

SaiwanEastoileldsincreasedin2011fromsome600bopdinthebeginningoftheyearto8,000bopd

inDecember.Tethysshareoftheproduction,beforegovernmenttake,amountsto30percentofthetotal.was a very successul year or ethys Oil. ethys share

oftheyearsproductionamountedto423,469barrels.Inthefourthquarter,197,916barrels,correspondingtoalmost50percentoftheannualproduction.

Te oil rom the Farha South and Saiwan East

oil elds has so ar been produced under the Early

Production System. e Field Development Plan,ocused on the Farha South and Saiwan East oil elds,

has been submitted to the Omani government or

review and approval. Production will continue under

theEPSuntiltheFDPhasbeenapproved.eworkon a more permanent system is making good progress

withinfrastructuredevelopments.Severalmajorunitshave been constructed. Construction o a new pipe-

line connecting the Farha South oil eld with the pro-

duction acilities at the East Saiwan oil eld was com-

pletedafterthereportingperiodinFebruary2012.Te construction o the export pipeline connecting

Saiwan East with the national Omani pipeline system

at Alam station continues.

Block 15

e JAS-2 well owed only water when tested in2008.InDecember2011,atestwaslaunchedwiththeattempttopumpothewaterwithjetpumpsandenable the well to ow hydrocarbons. Te test yielded

small amounts o oil and gas, but the water did not

diminish. Te results suggest that the hydrocarbons

trappedintheJAS-2sidetrackcannotbeeconomi -cally produced due to the low porosity o the reser-

voir rock together with the permeable water bearing

fractures. ereforethe JAS2 horizontal section isnow suspended and will probably be abandoned in

the uture. Work will still be done on the vertical part

o the well, in order to better understand the geology

o the potentially hydrocarbon bearing lower Shuaiba

ormation, below the Natih ormation. Te Shuaiba

ormation produces gas condensate rom the Wadi

RafasheldintheadjacentBlock9.

Country Licence name

Tethys Oil,

%

Total area,

km

Partners

(operator n bold)

Book value

31 Dec 2011

Book value

31 Dec 2010

Investments

JanDec 2011

Oman Block 15 40% 1,389 Odin Energi, Teths Ol 113,671 92,682 19,807

Oman Block 3,4 30% 33,125 CCED, Mts, Teths Ol 74,466 66,573 16,890

France Attla 40% 1,986 Galli Coz, Teths Ol 9,717 9,238 479

France Als 37.5% 215 Tethys Oil, MovOl 5,764 5,764

SwedenGotland Strre and

Gotland Mndre100% 581 Tethys Oil 2,200 1,628 615

Lithuania Retavas, Rasena 20% 3,100Odin Energi, Teths Ol,

prvate nvestors

New ventures 835 16 615

Total 40,396 206,651 170,135 44,375

* Te interest in Rietavas and Raiseinai licences are indirectly held through a 40 per cent shareholding in Jyllands Olie ApS which in turn holds 50 per cent o the shares in UAB LL Investicoswhich holds 100 per cent o the two licences. As Jyllands Olie ApS is not consolidated in ethys Oils nancial statements due to the ownership structure, there are no oil and gas propertiesrelated to the two licences. Te ownership o Jyllands Olie ApS is presented in the balance sheet under Shares in associated companies.Te interest in the Gargdzai license was as o 31 December 2011 not converted rom receivable to shareholding.


32/5632

emaineortsonBlock15willnowfocusonnd-ingthemosteconomicmethodofputtingtheJAS-1wellinproduction.JAS-1owedgasandcondensatewhentestedin2007.Anextensionofthe3Dseismicsurveyshotin 2008 isalsoplannedbefore drillingactivities will resume.

Investments made on Block 15 amounting toTSEK 19,807have mainly beenrelated to loggingoperationsonJAS-2conductedinDecember2010andJanuary2011andpreparatoryworkforthelongterm production test. Furthermore investments on

Block15haveregardedlicenceadministration,super-vision and geological studies.

Lithuania

Tethys has agreed with Odin Energi to acquireinterestsinLithuanianoilcompaniesUABMinijosNafta(MN)andUABLLInvesticos(LLI).MNholds the Gargzdai license with proven and probable

reservesin excess of6 million barrels according toindependent petroleum consultant Miller Lents inMay2011andwithadailyoilproductionofaround700 barrels per day. LLI holds the Rietavas andRaiseiniai licenses with known oil deposits and it is

ethys Oils view that these licences hold signicant

exploration upside. Te licenses also holds signicant

unconventional hydrocarbon potential, including

exposure to Silurian/Ordovician shale sections. Alllicensesareonshoreandcoversome4,000squarekil-ometres o the Baltic Sedimentary Basin. Te interests

will be held in partnership with Odin, giving ethys

anetindirectinterestof25percentinMNand20per cent in LLI in consideration or approximately

MSEK 140.

Te consideration will be met primarily by converting

MEUR13(aboutMSEK 117)fromaloanprovidedto Odin by ethys, under a strategic investment agree-

ment entered into previously. Also as consideration,

TethyshaspaidMUSD3.5(aboutMSEK 24)incash.UndertheinvestmentagreementabalanceofMEUR2willremain,whichcanbeusedforotherinvestmentsor will be repaid to ethys through share dividends.

France

In April,Tethys acquired 37.5 per cent interest ina second French licence. Te licence, called Permis

duBassinDAls,isanexplorationandproductionlicencecovering215squarekilometresinthedepart-ment o Gard in southern France. Te licence area

coverspartoftheAlsbasinincludingtheMaruejolsheavyoilelddiscoveredin1947.eeldisdeline-ated by nine wells and has produced small amounts

of14degreeAPIoil,during1947-1950and1980-1982.elicencealsocoversatleasttwoprospectswith potential or conventional oil at respective

depthsof1,400and2,000metres

A feasibility study of a heavy oil eld on the Alslicence has been launched, with a view to recommend

the most suitable pilot productions system. A seismic

interpretation as well as reprocessing o old seismic

isalsoongoing.A2Dseismicstudyaswellasarstexplorationwellisplannedforattheendof2012.

Investments related to the assets in France o

TSEK 6,243 have mainly regarded the acquisition

of 37.5 per cent of the Als permit from privateSwiss company MouvOil S.A.. e purchase priceamountedto39,261sharesandEUR250,000.

Sweden

e2011soilsamplingsurveyoverpartsofthelicensearea on Gotland gave encouraging results. Te analy-

sis was ocused on interpreting the data rom samples

taken rom above known reeal prospects that have

been identied on existing seismic lines and have not

beendrilled.Sofarsome10potentiallocationsforexploratory drilling have been identied and ethys is

investigating the possibility to conduct drilling opera-

tions on Gotland.

Currency exchange eects

Te book value o oil and gas properties includes cur-

rency exchange eectsofTSEK -9,564 during theyear2011,whicharenotcashrelateditemsandthere -ore not included in investments. For more inorma-

tion please see above Result.

Liquidity and nancing

Cashandbankasat31December2011amountedtoTSEK 93,105(TSEK 190,512).

e decrease in Cash and bank during 2011 ismainly explained by investments related to Lithu-

anianoilandgasprojects.einvestmentamountedto TSEK 160,229 and is an agreement betweenTethys Oil and private Danish oil company OdinEnergi.emajorpartoftheinvestmentisasper31December2011aloanofMEUR15.2,equivalentofTSEK 139,175toOdin.eloanissecuredbyapledgeof30percentofthesharecapitalofOdin.eremainingpartoftheinvestment,TSEK 23,951,isasper31December2011anindirectownershipofLith -

uanian oil and gas assets through a share ownershipofaDanishcompany.isownershipispresentedasShares in associated companies in the balance sheet.

A large part of the liquidity is kept in USDwhichhas depreciated against SEK during the reportingperiod. e currency exchange eect on cash andcashequivalentsamountedduringthefullyear2011toTSEK -4,344.

During2010,TethysOilenteredintoanagreementwithMitsui E&PMiddle EastB.V., whereby Mit-suiacquired20percentagepointsinBlocks3and4

onshore Oman. A part rom the cash considerationamountingtoMUSD20,Mitsuiundertooktofundethys Oils share o non exploration related capi-

talexpenditureuptoMUSD60onBlocks3and4


33/5633

eectivelyfrom1January2010.Asper31December2011,Mitsuihasfullledtheundertakingandthereisnoremainingcarryvalueoutstanding.MitsuiwillrecovertheMUSD60paidonbehalfofTethysfromthe proceeds o ethys share o uture cost recovery

productionentitlement.Mitsuisrecoveryofthecarryvalueisexpectedtocommenceduringtherstquar -

ter2012andwillsignicantlyimpactthecashavail -able or investments. It will urthermore increase oil

andgaspropertieswithanequalamountandaccord-ingly have a result eect through depletion over alonger period o time. ethys Oil will thereore have

tofunditsshareofinvestmentsonBlocks3and4through available liquidity and proceeds from oilsales.Dependingontheinvestmentpacebothrelat -ing to the development and the exploration o Blocks

3and4andincomingrevenuesfromtheoilsales,additionalnancingmayberequired.

As part of the agreementMitsuiwill pay toTethysOilaproductionbonusamountingtoMUSD10ifcommercialproductionexceeds10,000bopdfor30consecutivedays.Giventhat10,000bopdhasalreadybeen achieved during test production, the Company

is hopeul that rate will also be met during commer-

cial production and that the bonus payment will be

paidoutduring2012.

Parent company

Te Parent company reports a result or the ull year

2011amountingtoTSEK -14,669(TSEK -31,903).Administrativeexpenses amountedto TSEK 10,502

(TSEK 8,386)for thefull year 2011. Net nancialresult amounted to TSEK -7,351 (TSEK -13,351)duringthefullyear2011.eweakerUSdollarhashad a negative impact on net nancial result during the

twelvemonthperiod2011.eexchangeratelossesregardtranslationdierencesandarenoncashrelated.Investmentsduringthefullyear2011amountedtoTSEK 47,888(TSEK 71,982).Financialinvestmentsare nancial loans to subsidiaries or their oil and

gas operations. Te turnover in the Parent company

relates to chargeouts o services to subsidiaries.

Signicant agreements and commitments

In ethys Oils oil and natural gas operations there are

two main categories o agreements; one that governs

the relationship with the host country; and one that

governs the relationship with partners.

Te agreements that govern the relationship with host

countries are reerred to as licences or Exploration

and production sharing agreements (EPSA or PSA).

ethys Oil holds its interest directly through aore-

mentioned agreements in Oman, France and Swe-

den. Te agreements with host countries have a time

limit and are normally divided into periods. Financial

commitments and or work commitments normally

relatestothedierentperiods.TethysOilhasfullleditscommitmentsonBlock15andBlocks3and4in Oman or the current period. In the other areas

o operations the commitments are either ullled or

there are no commitments o which ethys Oil can

be held liable or. In some o ethys Oils areas o

interesttherearerequirementsofworktobedoneorminimum expenditures in order to retain the licences,

but no commitments o which ethys Oil can be held

liable or.

Te agreements that govern the relationship with

partners are referred to as Joint Operating Agree-ments(JOA).ExceptforSwedenwhereTethysOilisthesolelicenceholder,TethysOilhasJOAswithitspartners in all areas o operation.

Other than the aorementioned agreements, there are

no individual agreements or similar circumstances

relating to the business which are o crucial signi-

cance or the groups operations or protability.

Subsequent events

In early January 2012 after the reporting period,TethysOilsold52,484barrelsofoiltoavalueofTSEK 37,702, which is not included in the2011result.

est production rom the Early Production System

(EPS)onBlocks3and4onshoretheSultanateofOmancontinuesandamountedto311,457inJanu -ary,275,419inFebruaryand361,394inMarch,cor-respondingtoadailyproductionof10,047,9,947and11,658respectively.Tethysshareoftheproduc-tion,beforegovernmenttake,amountsto30percent

o the total.

In January 2012, the drilling Maha-1 explorationwellonBlock3onshoreSultanateofOmanwascom -pleted. Te well encountered oil, but the oil satura-

tion was too low to be produced. Te well has been

suspended to enable urther studies in the uture.

InApril2012,TethysOilpublishedtheresultsofthereserve/resource audit conducted by DeGolyer andMacNaughtononBlocks3and4.

Derivative nancial instruments

ethys Oil has not during the period used any deriva-

tive nancial instruments in order to hedge risks.

Board o Directors and Management

At the AnnualGeneral Meetingof shareholderson25May2011HkanEhrenblad,VincentHamilton,

JohnHoey,MagnusNordinandJanRisbergwerere-elected members o the Board. No deputy directors

wereappointed.AtthesamemeetingVincentHamil -ton was appointed Chairman o the Board.

eworkoftheBoardissubjecttoanestablished

work procedure that denes the distribution o workbetweentheBoardandtheManagingDirector.ework procedure is evaluated each year and revised

i deemed appropriate. Te Board had nine meet-


34/5634

ingsduring2011.MostimportantlytheBoardhasadopted the interim reports o the year as well as the

budgetof2012.

Te ve board members consist o two executive and

three non-executive directors. Vince Hamilton hasacted both as Chairman o the Board and as Chie

Operating Ofcer. Te three non-executive directorsare also members o the Audit committee which had

4meetingsduring2011.ChairmanoftheAuditcom -mittee is Jan Risberg. Furthermore, the three non-executive directors are also members o the Remuner-

ationcommittee,whereJanRisbergalsoisChairman.

Group structure

ethys Oil AB (publ), with organizational number

556615-8266,istheparentcompanyintheTethysOil Group. Te wholly owned subsidiaries ethys

OilOmanLimited,TethysOilBlock3&4Limited,WindsorPetroleum(Spain)Inc,TethysOilDenmarkAB, ethys Oil Canada AB, ethys Oil Spain AB,

ethys Oil urkey AB, ethys Oil France AB, ethys

Oil Suisse S.A., ethys Oil Exploration AB, ethys

OilCanadaLtdandLundinDataServicesB.V.arepart o the group. Te ethys Oil Group was estab-

lished1October2003.

Share data

Asper31December2011, thenumberof outstand-ing shares in Tethys Oil amount to 32,543,750(32,504,489), with a quota value of SEK 0.17(SEK 0.17).Allsharesrepresentonevoteeach.Tethys

Oil does not have any incentive program or employees.

During2011,TethysOilconductedashareissueinkindrelatedtotheacquisitionoftheAlspermitinFrance.eshareissuewasregisteredinJuneandthenumber of shares amounted to 39,261 and trans-ferredtoprivateSwisscompanyMouvOilS.A.asparto the consideration.

Risk and uncertainties

A statement o risks and uncertainties are presented

innote1,page46.

Dividend

eDirectorsproposethatnodividendbepaidforthe year.

Proposed disposition o unrestricted

earnings

eBoardofDirectorsproposethattheunrestrictedearningsofSEK 173,464,688ofwhichthelossfortheyear,SEK 14,669,177,bebroughtforward.

Te result o the groups and parent companys opera-

tions and the nancial position at the end o the nan-

cial year is shown in the ollowing income statement,

balance sheet, cash ow statement and related notes.

Balance sheet and income statement will be resolved

attheAnnualGeneralMeeting,16May2012.

eBoardofDirectorsandtheManagingDirectordeclare that the consolidated nancial statements

have been prepared in accordance with IFRS as

adoptedbytheEUandgiveatrueandfairviewoftheGroups nancial position and results o operations.

Te nancial statements o the Parent Company have

been prepared in accordance with generally accepted

accounting principles in Sweden and give a true and

air view o the Parent Companys nancial position

and results o operations. Te statutory Administra-

tion Report o the Group and the Parent Company

provides a air review o the development o theGroups and the Parent Companys operations, nan-

cial position and results o operations and describes

material risks and uncertainties acing the Parent

Company and the companies included in the Group.

Stockholm,27April2012

VincentHamilton,Chairman o the Board

HkanEhrenblad,Director JohnHoey,Director

JanRisberg,Director MagnusNordin,Managing Director


35/5635

Consolidated statement ocomprehensive income

TSEK Note 2011 2010

Net sales o ol and gas 4 103,538 11,066

Depleton o ol and gas propertes 9

Wrte o o ol and gas propertes 9 -311

Other ncome 5 13 105,016

Other losses/gans, net 10 -52 138

Admnstratve expenses 1113 -20,443 -15,247

Operating result 83,057 100,661

Fnancal ncome and smlar tems 14 2,339 19,984

Fnancal expenses and smlar tems 15 -16,281 -40,501

Net proft/loss rom assocated companes 6 0

Net nancial income -13,943 -20,517

Result beore tax 69,114 80,144

income tax 16 -123 -75

Result or the year 68,991 80,069

Other comprehensive income

Crrenc translaton derences 4,785 -8,533

Other comprehensive income or the period 4,785 -8,533

Total comprehensive income or the period 73,776 71,536

Nmber o shares otstandng 19 32,543,750 32,504,489

Nmber o shares otstandng (ater dlton) 19 32,543,750 32,504,489

Weghted nmber o shares 19 32,520,596 30,849,461

Earnngs per share, SEK 19 2.12 2.60

Earnngs per share (ater dlton), SEK 19 2.12 2.60


36/5636

Consolidated balance sheet

TSEK Note 31 Dec 2011 31 Dec 2010

ASSETS

Fixed assets

Ol and gas propertes 9 206,651 170,135

Ofce eqpment 17 2,298 2,100

Total xed assets 208,949 172,235

Financial assets

Other long term recevables 7 136,278

investment n assocated companes 6 23,951

Total nancial xed assets 160,228

Current assets

Other recevables 18 1,971 20,789

Prepad expenses 608 533

Cash and bank 93,105 190,512

Total current assets 95,685 211,834

TOTAL ASSETS 464,862 384,069

SHAREHOLDERS' EQUITY AND LIABILITIES

Shareholders' equity 19

Share captal 5,424 5,417

Addtonal pad n captal 438,329 436,608

Other reserves -2,955 -7,740

Retaned earnngs 14,761 -54,230

Total shareholders' equity 455,559 380,055

Non current liabilities

Provsons 8 1,705

Total non current liabilities 1,705

Non interest bearing current liabilities

Acconts paable 2,226 1,199

Other crrent labltes 4,114 481

Accred expenses 1,258 2,334

Total non interest bearing current liabilities 7,598 4,014

TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 464,862 384,069

Pledged assets 22 500 500

Contngent labltes 23


37/5637

Consolidated statement o changes inequity

TSEK

Share

capital

Paid in

capital

Other

reserves

Retained

earnings

Total

equity

Opening balance 1 January 2010 4,675 331,601 794 -134,300 202,770

Comprehensive income

Total comprehensve reslt 2010 80,069 80,069

Result or the year 80,069 80,069

Other Comprehensive income

Crrenc translaton 2010 -8,533 -8,533

Total other comprehensive income -8,533 -8,533

Total comprehensive income -8,533 80,069 71,536

Transactions with owners

Sbscrpton o warrants Febrar 65 8,894 8,959

Sbscrpton o warrants March 126 17,238 17,364

Sbscrpton o warrants Aprl 80 11,018 11,098

Sbscrpton o warrants Ma 31 4,242 4,273

Sbscrpton o warrants Jne 14 1,940 1,954

Sbscrpton o warrants Jl 343 46,983 47,326

isse costs warrant sse -1,050 -1,050

Prvate placement March 83 15,742 15,825

Total transactions with owners 742 105,007 105,749

Closing balance 31 December 2010 5,417 436,608 -7,739 -54,231 380,055

Opening balance 1 January 2011 5,417 436,608 -7,739 -54,231 380,055


Total comprehensve reslt 2011 68,991 68,991

Period result 68,991 68,991

Other Comprehensive income

Crrenc translaton derences 2011 4,785 4,785

Total other comprehensive income 4,785 4,785

Total comprehensive income 4,785 68,991 73,776


Share sse n knd Jne 7 1,721 1,728


Closing balance 31 December 2011 5,424 438,329 -2,955 14,761 455,559


38/5638

Consolidated cash ow statement

TSEK Note

1 Jan 2011

31 Dec 2011

1 Jan 2010

31 Dec 2010

Cash fow rom operations

Operatng reslt 83,057 100,661

interest receved 14 62 1

income tax 16 -123 -75

Adjstment or wrte down o ol and gas propertes 9 311

Adjstment or deprecaton and other non cash related tems 17 8,281 -102,842*

Total cash fow rom operations beore change in working capital 91,277 -1,944

Change n recevables 18,743 -18,929

Change n labltes 3,584 -15,897

Cash fow rom operations 113,604 -36,770

Investment activity

Proceeds rom armot 5 144,114

investment n ol and gas propertes 9 -44,375 -27,428

investment n assocated companes -23,951

investment n long term recevables -139,175

investment n other fxed assets 17 -891 -1,404

Cash fow rom investment activity -208,392 115,282

Financing activity

Share sse, net ater sse costs 19 1,727 105,750

Net proft/loss rom assocated companes

Cash fow rom nancing activity 1,727 105,750

Period cash fow -93,061 184,262

Cash and cash eqvalents at the begnnng o the perod 190,512 13,620

Exchange gans/losses on cash and cash eqvalents -4,344 -7,369

Cash and cash eqvalents at the end o the perod 93,105 190,512

* Te capital gain rom the armout, SEK 103 236, is transerred rom the operational cash fow to investments activities where all proceeds rom the armout is presented. Teremaining part is depreciation and other non cash related items o SEK 394.


39/5639

Parent Company income statement

TSEK Note

1 Jan 2011

31 Dec 2011

1 Jan 2010

31 Dec 2010

Net sales o ol and gas

Deprecaton o ol and gas propertes 9

Wrte o o ol and gas propertes 9

Other ncome 3,236 2,883

Other losses/gans, net 10 -52 138

Admnstratve expenses 1113 -10,502 -8,386

Operating result -7,318 -5,366

Fnancal ncome and smlar tems 14 9,148 28,058

Fnancal expenses and smlar tems 15 -16,270 -40,478

Net proft/loss rom assocate 0

Wrte down o shares n grop compan 20 -229 -932

Net nancial income -7,351 -13,351

Result beore tax -14,669 -18,717

income tax 16 -13,186

Result or the period and total comprehensive income -14,669 -31,903

Nmber o shares otstandng 19 32,543,750 32,504,489

Nmber o shares otstandng (ater dlton) 19 32,543,750 32,504,489

Weghted nmber o shares 19 32,520,596 30,849,461


40/5640

Parent Company balance sheet

TSEK Note 31 Dec 2011 31 Dec 2010

ASSETS

Fixed assets

Ol and gas propertes 9

Other fxed assets 17 169 264

Total xed assets 169 264

Financial assets

Shares n sbsdares 20 26,456 26,456

Long term recevables to grop companes 110,423 235,877

investment n assocate 6 23,951

Other long term recevables 7 136,278

Total nancial xed assets 297,107 262,333

Current assets

Other recevables 18 546 302

Prepad expenses 892 331

Cash and cash eqvalents 3,943 51,517

Total current assets 5,380 52,149

TOTAL ASSETS 302,657 314,746

SHAREHOLDERS' EQUITY AND LIABILITIES

Shareholders' equity 19

Restricted equity:

Share captal 5,424 5,417

Stattor reserve 71,071 71,071

Unrestricted equity:

Share premm reserve 367,258 365,537

Retaned earnngs -179,124 -147,221

Net reslt -14,669 -31,903

Total shareholders' equity 249,960 262,901

Non interest bearing current liabilities

Acconts paable 2,005 1,107

Other crrent labltes to grop companes 50,692 50,618

Accred expenses 120

Total non interest bearing current liabilities 52,697 51,845

TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 302,657 314,746

Pledged assets 22 500 500

Contngent labltes 23


41/5641

Parent Company statement ochanges in equity

Restricted equity Unrestricted equity

TSEK

Share

capital

Statutory

reserve

Share

premium

reserve

Retained

earnings

Net

result Total equity

Opening balance 1 January 2010 4,675 71,071 260,530 -79,944 -30,327 226,005

Transer o pror ear net reslt -30,327 30,327


Loss or the ear 2010 -31,903 -31,903

Result or the year -31,903 -31,903

Other comprehensive income

Grop contrbton -50,137 -50,137

Tax eect on grop contrbton 13,186 13,186

Total other comprehensive income -36,951 -36,951

Total comprehensive income -36,951 -31,903 -68,854


Sbscrpton o warrants Febrar 65 8,894 8,959

Sbscrpton o warrants March 126 17,238 17,364

Sbscrpton o warrants Aprl 80 11,018 11,098

Sbscrpton o warrants Ma 31 4,242 4,273

Sbscrpton o warrants Jne 14 1,940 1,954

Sbscrpton o warrants Jl 343 46,983 47,326

isse costs warrant sse -1,050 -1,050

Prvate placement March 83 15,742 15,825

Total transactons wth owners 742 105,007 105,749

Closing balance 31 December 2010 5,417 71,071 365,537 -147,221 -31,903 262,901

Opening balance 1 January 2011 5,417 71,071 365,537 -147,221 -31,903 262,901

Transer o pror ear net reslt -31,903 31,903


Loss or the ear 2011 -14,669 -14,669

Result or the year -14,669 -14,669

Total comprehensive income -14,669 -14,669


Share sse n knd 7 1,721 1,728


Closing balance 31 December 2011 5,424 71,071 367,258 -179,124 -14,669 249,960


42/5642

Parent Company cash ow statement

TSEK Note 2011 2010

Cash fow rom operations

Operatng reslt -7,318 -5,366

interest receved 14 7,105 8,075

interest pad 15 0

Adjstment or deprecaton 17 3,067 165

Total cash fow rom operations beore change in working capital 2,854 2,874

Change n recevables 135,472 -117

Change n labltes 852 914

Cash fow rom in operations 139,178 3,671

Investment activity

investment n assocate 6 23,951

investment n long term labltes 7 -208,042 -71,777

investment n other fxed assets 17 -74 -205

Cash fow rom investment activity -184,166 -71,982

Financing activity

Share sse, net ater sse costs 19 1,727 105,750

Net proft/loss rom assocate 6

Cash fow rom nancing activity 1,727 105,750

Cash fow or the year -43,261 37,438

Cash and cash eqvalents at the begnnng o the perod 51,517 12,278

Exchange gans on cash and cash eqvalents -4,313 1,801

Cash and cash eqvalents at the end o the perod 3,943 51,517


43/5643

Notes

General inormation

ethys Oil AB (publ) (the Company),

corporate identity number 556615-8266,

and its subsidiaries (together the Group orethys Oil) are ocused on exploration or

and production o oil and natural gas. Te

Group has interests in exploration licences

in Oman, France, Lithuania and Sweden.

Te Company is a limited liability company

incorporated and domiciled in Stockholm,

Sweden. Te Company is listed on First

North in Stockholm.

Tese consolidated nancial statements

have been approved or issue by the Board

ofDirectorson27April2012.

Accounting principles

Te accounting principles applied in the

preparation o these consolidated nan-

cial statements are set out below. Te same

accounting principles were used in the

Annual report 2010 and have been con-sistently applied to all the years presented,

unless otherwise stated. Te Annual report

o the Group has been prepared in accord-

ance with International Financial Report-

ing Standards (IFRS) as adopted by theEU, the Annual Accounts Act and RFR1 Supplementary rules for groups. eAnnual report or the Parent company

has been prepared in accordance with the

Annual Accounts Act and Swedish Finan-

cial Accounting Standards Councils RFR

2 Accounting for legal entities. RFR 2means that the parent company in the

annual report or the legal entity shall apply

IFRS rules and statements as adopted by

the EU, so far this ispossible within the

ramework o the Annual Accounts Actand with regard to the connection between

accounting and taxation. Te recommenda-

tion states which exceptions and additions

that shall be or are allowed to be made rom

IFRS. Te accounting principles o the Par-

ent company are the same as or the Group,

except in the cases specied below in the

section entitled Parent Company account-

ing principles.

Te preparation o nancial statements

inconformity with IFRS requiresthe use

o certain critical accounting estimates. It

also requires management to exercise itsjudgement in the process of applying theCompanys accounting policies. Tese areas

involvingahigherdegreeofjudgementorcomplexity, or areas where assumptions and

estimates are signicant to the consolidated

nancialstatementsaredisclosedinnote1.

New accounting principles or

2011

New and amended standards

adopted by the Group 2011

None o the new accounting principles or

interpretations thatcame intoeectas ofJanuary 1, 2011 has had any signicantimpact on the Groups nancial statements.

New standards, amendments and

interpretations issued but not

eective or the nancial year

beginning 1 January 2011 and not

early adopted by the Group

When preparing the consolidated nan-

cial statements asof December 31, 2011,a number o standards and interpretations

has been published, but has not yet become

eective. e following is a preliminaryassessment o the standards and statements

that could have impact on the Groups

nancial statements.

IFRS 9 Financial instruments

Tis standard addresses the classication

and measurement o nancial instruments

andislikelytoaecttheGroupsaccount-ing or its nancial assets and liabilities. Te

groupisyettoassessIFRS9sfullimpactandintendstoadoptIFRS9nolaterthanthe accounting period beginning on or ater

1January2015.

IFRS 10 Consolidated fnancial

statements

Tis standard builds on existing principles

by identiying the concept o control as the

determining actor in whether an entity

should be included within the consolidated

nancial statements o the parent company.

Te standard provides additional guidance

to assist in the determination o control

where this is difcult to assess. Te Group

isyettoassessIFRS10sfullimpactandintendstoadoptIFRS10nolaterthantheaccountingperiodbeginningonorafter1

January2013.

IFRS 11 Joint Arrangements

e new standard replaces IAS 31 Inter-estsinJointVenturesandimplementsnew

accounting requirements for joint ven-tures. Te ability to apply the proportion-

atemethodwhenrecognizingjointlycon-

trolled companies will be abolished. Teequity interest of the joint ventures resultwillaecttheinvestmentinjointventuresin the balance sheet. Te Group intends to

adoptIFRS11nolaterthantheaccount -ingperiodbeginningonorafter1January2013.

IFRS 12 Disclosures o interests in

other entities

Te standard includes the disclosure

requirements for all forms of interests inother entities, including joint arrange-ments, associates, special purpose vehicles

and other o balance sheet vehicles. egroupisyettoassessIFRS12sfullimpactandintendstoadoptIFRS12nolaterthanthe accounting period beginning on or ater

1January2013.

Tere are no other IFRSs or IFRIC inter-

pretations that are not yet eective thatwould be expected to have a material impact

on the Group.

Principles o consolidationSubsidiaries are all entities (including spe-

cial purpose companies) over which the

Group has the power to govern the nancial

and operating policies generally accompa-

nying a shareholding o more than one hal

ofthevotingrights.eexistenceandeecto potential voting rights that are currently

exercisable or convertible are considered

when assessing whether the group controls

another entity. Subsidiaries are ully con-

solidated rom the date on which control is

transerred to the Group. Tey are de-con-solidated rom the date that control ceases.

egroupusestheacquisitionmethodofaccounting to account or business combi-

nations. Te consideration transerred or

the acquisition of a subsidiary is the fairvalues o the assets transerred, the liabili-

tiesincurredandtheequityinterestsissuedby the group. Te consideration transerred

includes the air value o any asset or liabil-

ity resulting rom a contingent considera-

tionarrangement.Acquisition-relatedcosts

are expensed as incurred. Identiable assetsacquiredandliabilitiesandcontingentlia-bilities assumed in a business combination

are measured initially at their air values at


44/5644

theacquisitiondate.Onanacquisition-by-acquisitionbasis,thegrou

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TOL - Annual Report 2011

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