Tethys Petroleum: Secures AGR Energy Loan Plus Additional Financing From Pope Asset Management

Tethys Petroleum Limited is pleased to announce that in addition to the recently announced US$7.5 million convertible debenture financing, it has entered into an agreement in respect of the issue and sale of an additional convertible debenture as described below.

Additional Convertible Loan Signed

--  Financing: Unsecured convertible loan facility 
--  Principal: US$1.7 million 
--  Term: 2 years 
--  Interest rate: 9% p.a. 
--  Conversion price: US$0.10 
--  Lender: Annuity and Life Reassurance Ltd ("ALR")

The additional convertible debenture agreement has been entered into with ALR, an insurance company, the assets of which are managed by Pope Asset Management, LLC (“PAM”). ALR currently holds warrants to acquire 23,333,333 ordinary shares in Tethys, as detailed in the announcement by the Company on March 10, 2015. PAM currently controls the voting rights over approximately 19% of the shares in the Company. The transaction is on similar terms to the convertible debenture financing announced on May 15, 2015, and is subject to customary closing conditions.

Pursuant to the terms of the debenture, ALR will not be entitled to exercise any right of conversion that would result in the issuance of more than 10,320,980 new ordinary shares until such time as the approval of the Company’s disinterested shareholders has been obtained if and to the extent required under the rules of the TSX. In the event that the exercise of the conversion rights would result in ALR and its affiliates together with PAM exercising control or direction over 20% or more of the issued and outstanding ordinary shares of the Company, such exercise will be subject to approval of the shareholders of the Company excluding votes attached to the shares over which ALR or its affiliates or PAM exercises control or direction.

The debenture is redeemable prior to maturity for an amount equal to the principal outstanding together with any accrued interest and an early redemption fee of 3.5% of the principal amount to be redeemed. The debenture contains event of default provisions, including as a result of the failure to obtain any required governmental approvals to the conversion of the debenture.

John Bell, Executive Chairman, said:

“We are very pleased to have now received all the funds on the US$7.5 million convertible with AGR Energy and, alongside this, to have secured additional funding and the support of Pope Asset Management, our largest shareholder, as we continue to progress the strategic review.”

Bill Wells, President of Pope Asset, said:

“We are pleased to have the opportunity to be able to participate on this placement. The investment by AGR Energy not only helps provide needed short-term capital but also provides a potential new in country partner that may be of great strategic benefit to Tethys. We are hopeful an agreement can be reached that will help put Tethys on a path for success.”