SECOND QUARTER 2022

Magnus Nordin, Managing Director,

Petter Hjertstedt, CFO,
9 August 2022
 Highlights Q2 2022

• Al Jumd discovery appraisal programme on Block 56 expanded by two additional horizontal wells.
Ongoing well testing operation in Sarha-3 and Sahab-1.

• Preparation for a long-term production test of the three wells in the Al Jumd discovery ongoing.
Starting in September – All three wells to be hooked up to the production system in October.

• Block 56 central area – seismic interpretation.

2023 Exploration campaign targeting plays with a gross, unrisked, potential of ≤ 50 mmbo.

• Extension on initial exploration phase on Block 49 to December 2023.

 Highlights Q2 2022

• Production of 10,068 (10,475)

• Production still impacted by reduced activity and spending during pandemic.

• Full year ‘22 guidance in line with the 10,271 bopd of the first six months.

• Achieved oil price of USD 100.1 (80.4) drove a strong financial quarter.
• Revenue and other income of MUSD 37.8 (34.6).
• EBITDA of MUSD 24.1 (20.2).
• Free cash flow of MUSD 7.1 (-13.1).

• Total shareholder distribution of MUSD 22.8 (SEK 7,0 per share).

 Expanded appraisal activities ahead of
production test on Block 56
Al Jumd discovery
• Appraisal programme expanded by two additional
horizontal wells, drilled in Q3.
• Preparations for a up to 6 months production test Al Jumd
of Al Jumd-2, -3 & -4.
Sarha-3 & Sahab-1 testing operations
• Ongoing testing operations will be completed in Q4.
Central area
• Processing & interpretation of ≥ 2,000 km2 3D
seismic survey data acquired in Q1 ongoing.
Central area
• Planning for exploration drilling in 2023 targeting
plays with an unrisked potential of up to 50 mmbo,
gross.

Second quarter 2022 – 9 August 2022 4

Block 56 – Al Jumd discovery campaign
Al Jumd-3 Al Jumd-2
• Drilled in Q1 2022.

Al Jumd-2 • Measured depth: 2,032 metres.

• True vertical depth: 1,838 metres.
• Tested initial rate of 700 bopd of 25 API gravity oil from
430 metre horizontal section in Al Khalata sandstone.
Al Jumd-3 & -4 appraisal wells
• Al Jumd-3 and -4 horizontal wells targeting the Al Khalata
sandstone at a depth of 1,300 metres.
Al Jumd-4 • Horizontal sections of 625 and 700 metres drilled,
respectively.
Long-term production test of Al Jumd discovery
• Production test including Al Jumd-2, -3 & -4 to be started by
late Q3 2022.
• Test of up to 6 months to establish optimal production level.

Second quarter 2022 – 9 August 2022 5

 Production on Blocks 3&4

• Production of 10,068 bopd, 4% lower than in Q1.

• Increased production in June as production improvement initiatives started to take effect.

• Maintenance and upgrades of the Saiwan processing facility will impact Q3 production, expected to be just
below 10,000 bopd.

• Based on operator forecast, revised FY production guidance inline with the 10,271 bopd for the first six months
of 2022.

11,072 11,585 11,030 11,280

10,597 10,651 10,659 10,475 10,068
bopd

Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22

Second quarter 2022 – 9 August 2022

Exploration and appraisal activities on Blocks 3&4
• One new, as of yet untested, appraisal
well drilled in Shahd area.
• Second exploration well for the year,
Ahad-1, will spud by late August.
• Campaign of ~ 3,500 km2 3D seismic is
progressing, to be completed in
December.
• “Catch up programme” ongoing with
drilling, workovers and production
assurance initiatives.
• A fourth drilling rig operational in Q3,
enabling continued high pace of
production drilling while retaining ability
to drill exploration wells.

2021/22 3D seismic acquisition

area of 3,555 km 2

Second quarter 2022 – 9 August 2022 7

Project overview
EPSA/Licences
Working Award/
(operated Phase Expiry Partners (operator in bold)
Interest % Acquisition
Blocks in bold)

Blocks 3&4 30% 2007 Production 2040 CCED, Mitsui E&P, Tethys Oil

Block 49 100% 2017 1st exploration 2023 Tethys Oil

Block 56 65% 2019 2nd exploration 2023 Tethys Oil, Medco Arabia, Biyaq, Intaj

Block 58 100% 2020 1st exploration 2023 Tethys Oil

• Blocks 3&4: Has produced more than 100 million barrels

(gross) since 2010 with substantial continued potential.
• Block 56: A promising blend of exploration and appraisal
opportunities in both the Al Jumd and Central areas, the
focus for Tethys Oil’s main exploration activities in 2022.
• Block 58: A high-potential exploration Block with two main
areas of interest; Fahd and South Lahan. First exploration
drilling is planned for late 2022.
• Block 49: Tethys Oil drilled the Thameen-1 exploration
well on the Block in 2021 and is currently attempting to
establish oil flows from the Hasirah formation.

8
 Encouraging progression on Block 58
South Lahan
• Interpretation of 450 km2 3D seismic ongoing with
completion in late Q3.
• Encouraging results so far reinforce our view on
the prospectivity of the area.
• Several new leads identified from the new seismic
in addition to the multiple leads from proven play
concepts in production in surrounding areas.
Fahd
• Leads maturing into prospects.
• Well design for a Fahd area prospect completed.
• Work so far confirms prospectivity of Fahad area
and increase prospectivity of the Lahan area
• Following the positive early results, the work .
programme is being revised accordingly.

Second quarter 2022 – 9 August 2022 9

 Exploration activities on Block 49
• Extension of the initial exploration phase until December 2023
has been granted.

• Objective of extended work programme is to attempt to

establish oil flows from the tight Hasirah formation in the
Thameen-1 well. Thameen-1 well

• Geological model updated with regional information and data.

Second quarter 2022 – 9 August 2022 10

 Financial highlights Q2 2022

37.8
• Achieved Oil Price USD 100.1 (80.4) per barrel 31.8
34.6
• Revenue and other income MUSD 37.8 (34.6) 26.1
29.4
25.4
• EBITDA MUSD 24.1 (20.2) 24.1
20.2
• Net Result MUSD 17.0 (9.9) 16.5 18.0
14.5
• Investments in oil & gas properties MUSD 19.6 (24.6) 12.3
• Free Cash Flow MUSD 7.1 (13.1)
• Total shareholder distribution MUSD 22.8
• Net Cash MUSD 40.2 (55.4)
Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22

Revenues and other income, MUSD

EBITDA, MUSD

11
Second quarter 2022 – 9 August 2022
Oil price rally feeding through in Q2 & Q3 OSPs
• Q2 Average OSP reflects the production weighted average of spot price in February-April 2022
• The Q3 unweighted average OSP points to a 6% sequential increase of average oil price
• Q2 Oman Blend-Brent average differential USD 6 per barrel (Q1: USD 3.8/barrel)

160
Q2-22 Average OSP Q3-22 Average OSP
150 USD 101.8 USD 107.8

140
Apr OSP May OSP June OSP July OSP Aug OSP Sept OSP
130 USD 92.0 USD 111.0 USD 102.4 USD 107.2 USD 112.9 USD 103.2

120

110

100

90

80

70

60
Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22

Second quarter 2022 – 9 August 2022 12

 Q2 Oil sales impacted by delayed lifting
600,000 110
100.1
100
• Q2 oil sales of 261,072 barrels does not
include June nomination of 94,497 barrels of 500,000 90
oil 80.4
80
• June nomination lifted in early July and 73.7
included in Q3 400,000
66.7 70
• Underlift of 65,573 barrels per 30 June 59.7
(overlift of 58,360 per 31 March) 60

USD/bbl
Barrels
300,000
• Achieved oil price reflects the pricing of April 46.7 50
and May
40
• If June pricing had been included – 100.8 200,000
USD/barrel 30

100,000 20

10

0 0
Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22

Oil sales, bbl Achieved Oil Price, USD/bbl

Second quarter 2022 – 9 August 2022 13

Entitlement value continues to increase
• As oil prices increase fewer barrels are required to recover cost incurred reducing number of “cost oil”
entitlement barrels without any effect on cost recovery value
• Value of total entitlement increases even though volume decreases – more barrels available for profit oil

45.0 600,000 60%

40.0 50%
500,000 46% 50%
44%
35.0 42% 42%
41%
400,000 40%
30.0

25.0
MUSD

300,000 30%

20.0

200,000 20%
15.0

10.0
100,000 10%

5.0
0 0%
0.0 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22
Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22
Net Entitlement barrels, bbl Net Entitlement share, %

Second quarter 2022 – 9 August 2022 14

 Opex per barrel impacted by production dip

16
• Opex expenses down from Q1 but
remain on higher levels than in 13.4 13.2 14
2021 due to post-pandemic 14
normalisation of activity and 11.5 12
spending 12 10.4
9.9
• Opex per barrel impacted by the 3.3
2.9 10
lower production in the second 10
2.5
2.7
quarter 1.0

USD/bbl
2.5 1.1 8
MUSD
8 0.7 0.9
• 2022 Guidance increased to 13 0.4
USD/bbl (+/- 0.5) from 12 6
USD/bbl (+/- 0.5) 6

4 8.3 8.1 4
7.6 7.7
7.0

2 2

0 0
Q2-21 Q3-21 Q4-21 Q1-22 Q2-22

Production costs Workovers & well intervntions

Operator G&A and Overhead expenses Opex per bbl (USD)

Second quarter 2022 – 9 August 2022 15

 Stable operating cash flows
• Recent quarters have seen increased working capital volatility mainly driven by increased oil prices and liftings
slippages
• Rapid changes in oil prices makes forecasting lifting volumes more challenging – more volatility in over-/underlift
• Operating cash flow is however stable, predictable and increasing in recent quarters

23.8
8.4 20.6
18.1
MUSD

15.0 5.9 16.4

11.8
3.0

-1.7

-9.0 -9.0

Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22

Second quarter 2022 – 9 August 2022 16

 Investments reflect high exploration activity
• Total investments in Oil&Gas properties in Q2 30
amounted MUSD 19.6 (Q1: MUSD 24.6)
• Blocks 3&4 and Block 56 expected to dominate 25
capex driven mainly by drilling activity 13.7

• Full year guidance of MUSD 87 (91) following 20

lower than budgeted spend in the first six 4.2
months and prolonged lead times pushing 4.7
some activities to 2023 15

• Blocks 3&4 capex recovered immediately as

1.5

MUSD
cost oil 10
• Block 49, 56 & 58 capex in “cost pool” to be 0.3 15.3
1.1
recovered from potential future production 10.8
5 10.5
7.0 8.0

-5

-10
Q2-21 Q3-21 Q4-21 Q1-22 Q2-22

Block 3&4 Block 49 Block 56 Block 58

Second quarter 2022 – 9 August 2022 17

 Free cash flow positive in Q2
• Free cash flow in Q2 of MUSD 7.1 (Q1: MUSD -13.1) in Q1, driven by strong operational cash flow and lower
levels of investment
• Investments in significant exploration programme
• Free cash flow volatile due to discretionary exploration investment spend and WC volatility

15.0
13.1

10.0 9.2
7.1
4.9
5.0
2.3
MUSD

0.0

-5.0

-10.0

-15.0 -13.1
Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22

Second quarter 2022 – 9 August 2022 18

 Cash flow year to date
• Strong own cash availability even after increased investment levels and shareholder distribution

MUSD 18.1 on exploration blocks

MUSD 26.1 on Blocks 3&4

Net change in cash before

financing/distribution

Significant
-6.0
shareholder
distribution

Second quarter 2022 – 9 August 2022 19

 Netback trend shows Blocks 3&4 profitability
• Strong trend in Netback
• Netback (net of capex) proxy for profit oil/free cash flow from Blocks 3&4

30 35
27.1
29.6
30
25

21.7
20.9
25
19.3 22.9
20
21.3
16.6
20 18.6

USD/bbbl
MUSD

15 16.5

11.9 15
11.3 10.9 12.9
10.4
9.6 10.9 11.5
10 10.6
9.5
10

5
5

0 0
Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022

Netback Netback (Net of Capex) Netback Netback (Net of Capex)

Second quarter 2022 – 9 August 2022 20

Solid oil demand projected despite recession concerns
• Oil price is still at elevated levels: despite correction since the beginning of June, Brent is up +24% YTD and +40% y/y
• Major institutions (OPEC/EIA/IEA) expect solid growth of global oil demand in 2022&2023, despite the recession fears
• The growth range of MMbbl/d 2.0-2.7 is expected for 2023, bringing the daily demand to the range of MMbbl/d 101.3 - 103

105
130
102.99
123.6
120 101.58
101.30
100.29

Global oil demand, MMbbl/d

100 99.58
99.20
110
Brent, USD/bbl

97.3597.50
96.82
100
96.5

95
90

80
77.8
90
2021 2022 2023
70
Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 OPEC EIA IEA

Second quarter 2022 – 9 August 2022 21

 Supply is tight and getting tighter…
• Supply is lagging so far in 2022, with more uncertainties on 2023 rising…
• OPEC+ is underproducing ca. MMbbl/d 2.7 as of June
• The US crude oil production is up by just MMbbl/d 0.3 (or 2.5%) YTD, as of end of July
• The ban of Russian oil and petroleum products by the EU is supposed to start in Q1-23 (up to MMbbl/d 2.0-3.0* off the market, in the worst case)

OPEC+ actual crude production vs. output quota (19 countries) Compliance rates for OPEC+ (based on 19 countries)
43,000 330%
42,202 313%
42,000

41,000 40,805 280% 265%

40,000

39,000
000 bbl/d

230% 224%
38,000 38,115

37,000

36,000 180%
157%
35,000
126%
34,000 130% 114% 115%
104% 109%
100% 102%
33,000
Jul-21

Nov-21

Jul-22
Sep-21

Sep-22
Apr-21

Apr-22
Oct-21
Jan-21
Feb-21
Mar-21

Jun-21

Jan-22
Feb-22
Mar-22

Jun-22
May-21

Aug-21

Dec-21

May-22

Aug-22

80%

OPEC+ actual crude production Output target/quota

Note: * Bloomberg Intelligence

Second quarter 2022 – 9 August 2022 22
2022 Production Guidance & Work programme

• Production in for the second six months and full year 2022 expected to be in line with average
production during first six months of 10,271 barrels per day
• Previous guidance: 10,500-11,000 bopd for the full year ’22

• Operating expenditures expected to be in the USD 13 (+/- 0.5) per barrel range for the full year
• Previously USD 12 (+/- 0.5)

• The 2022 work programme & budget targeted investments for a total of MUSD 87, compared to the
previous target of MUSD 91
• Increased investments in Blocks 3&4: a fourth drilling rig and increased asset integrity spending
• Increased investments on Block 56 as the Al Jumd programme was expanded
• Overall decrease following lower than budgeted spending in the first six months and prolonged lead
times pushing some activities to 2023
• Investments will be financed by the Company’s cash flow from operations and available cash

Second quarter 2022 – 9 August 2022

23
Outlook and summary

Q2 2022
• Expansion and rapid progression in Al Jumd as long-term production
test is about to begin, test production may have a noticeable impact
on Tethys full production for the closing months of 2022.
• Block 56 will also see a multi-well exploration programme in the
central area starting in 2023, targeting plays of close to 50 mmbo,
gross, unrisked potential.
• Encouraging early results on Block 58 as activities on the Block
continue.
• Block 49 initial exploration phase extended to December 2023.
• Higher oil prices drive strong financial growth.
• Ongoing production initiatives to increase future production levels on
Blocks 3&4, including a fourth drilling rig.

Second quarter 2022 – 9 August 2022

 Thank you for your time

Financial Calendar 2022-2023

• Report for third quarter 2022 (January–September 2022)
on 8 November 2022
• Report for fourth quarter 2022 (January–December 2022)
on 7 February 2023
• Report for the first quarter 2023 (January – March 2023)
on 9 May 2023
• Report for the second quarter 2023 (January – June 2023)
on 8 August 2023
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Second quarter 2022 – 9 August 2022

Tethys Oil AB (publ)
Hovslagargatan 5B
SE -111 48 Stockholm
Sweden
Phone: +46 8 505 947 00
Fax: +46 8 505 947 99
E-mail: info@tethysoil.com

WWW.TETHYSOIL.COM