Tethys Oil AB: Correction of export reporting error affects fourth quarter 2016 revenue and result negatively
Tuesday, Feb 14, 2017
Tethys Oil has been informed by the operator of Block 3 and 4, that due to an inadvertent fiscal metering calibration problem, an over-reporting of exported oil from Blocks 3 and 4 during the period August 2010 until February 2016 occurred. Tethys Oil estimates that its share of the overestimated volume of oil amounts to 157,000 barrels (before government take). To rectify the over-reported quantity of delivered oil, the Blocks 3 and 4 partners have agreed with the pipeline operator and the Ministry of Oil and Gas to repay the over-lifted amount in cash. Tethys Oil estimates, that Tethys Oil's share of the cash repayment, will amount to approximately MUSD 5.9, which consequently will reduce Tethys Oil's fourth quarter 2016 revenue and result with that amount. The mechanism for the settlement details are being discussed, but Tethys Oil expects that the final settlement will reflect the relevant agreements. Tethys Oil estimates that the negative undiscounted net cash effect for Tethys Oil will be less than MUSD 1.4.
Tethys Oil AB, through its wholly owned subsidiary Tethys Oil Block 3 and 4 Ltd, has a 30 per cent interest in Blocks 3 and 4. Partners are Mitsui E&P Middle East B.V. with 20 per cent and the operator CC Energy Development S.A.L. (Oman branch) holding the remaining 50 per cent.
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