HIGHLIGHTS
• During the fourth quarter 2010, Tethys Oil sold 18,898 barrels of oil after government take from
the Early Production System ("EPS") on Block 3 Oman, resulting in net sales of TSEK 11,066 (TSEK -)

•Saiwan East-6 finalized in first quarter 2011 with no production flows

• Result for the full year 2010 amounted to TSEK 80,069 (TSEK -42,503 for the corresponding period last year) and TSEK 4,810 (TSEK 10,109) for the fourth quarter. Included in the result is the
farmout of 20 percentage points of Blocks 3 and 4 which resulted in capital gains of TSEK
103,236 during the third quarter 2010. The result has furthermore been impacted by currency
exchange losses and administrative expenditures

• Earnings per share amounted to SEK 2.60 (SEK -1.62) for the full year 2010 and SEK 0.15 (SEK 0.36) for the fourth quarter

•In 2010, a total of 139,213 barrels were produced under the EPS. Teth ys' share of the test
production oil amounts to 30 per cent, or 41,764 barrels, before government take

•Saiwan East–3 well tested 10,714 barrels of oil per day in July

•Farha South-4 well tested 3,079 barrels of oil per day in October

•Farha South-5 well tested in excess of 1,500 barrels of oil per day in December

•Saiwan East-4 well encountered in January 2011 different quality oil from previous Saiwan wells

•Independent third party resource audit over Blocks 3 and 4 in May gives an on Block
contingent resource of 42 million barrels of conventional oil

•On May 19th, Tethys entered into a Farmout Agreement with Mitsui E&P Middle East
B.V., a subsidiary of Mitsui & Co. Ltd., whereby Mitsui acquired 20 percent of the licence
covering Blocks 3 and 4. The purchase price amounted to MUSD 20 in cash. In addition
Mitsui undertook to fund Tethys' share of capital expenditures up to MUSD 60 on the Blocks
effectively from January 1st 2010

• During the first half of 2010 Tethys Oil has received proceeds of TSEK 90,974 before issue costs from 3,955,398 exercised warrants and TSEK 15,820 before issue costs from private placements
of 500,000 shares

• Cash and cash equivalents as per 31 December 2010 amounted to TSEK 190,512 (TSEK 13,620). Oil and gas investments amounted to TSEK 27,428 (TSEK 81,480)

Message from the Managing Director

As 2010 has drawn to a close and 2011 has begun, a note of maturity has slipped into Tethys' portfolio of assets and outlook on life: We have recorded our first oil sales ever. We have an orderly balance sheet following the farm out to Mitsui. And our projects are becoming more organized as the databases grow and the models themselves mature. A draft field development plan has been presented by the operator over Blocks 3 and 4, which is now being discussed in the partner group and with the Ministry of Oil and Gas of the Sultanate of Oman.

The results of the drilling on the Saiwan East area on Block 4 suggest that the area around wells SE-2 and SE-3 is the most prolific one as regards the Khufai light oil. Production plans therefore will focus on this area. In the area surrounding wells SE-4 and SE-6, the presence of moveable oil has not been proven. In this area, further studies within the heavy oil project will be conducted. And the area surrounding the well SE-1 will be the object of exploration for in particular light Khufai oil as well as further heavy oil appraisals. In Farha South on Block 3, we would expect intermittent test production to continue as more wells will be added to the Early Production System.

Gaffney Cline is expected to provide us with an updated Resource report in early March. As the development parts of the Blocks become better defined, we can also more safely include resources for the appraisal parts. This also includes the ubiquitous heavy oils on Block 4 as well as again look at exploration possibilities surrounding the development/appraisal areas. Remember that the databases on the Blocks are huge, more than 30,000 line kilometres of seismic data and over 30 wells drilled, most of which by previous operators and thus at no cost to us.

We will also increase activity in all our other theatres of operations. The JAS-2 well was re-logged and confirmed to be hydrocarbon bearing in December, leading us to suggest further activity on Block 15. Our partner Odin has agreed to assume operatorship and work on a plan to implement an early production system also on this
Block.

In France the operator suggests additional drilling to try and prove the commerciality of our gas discovery on the Attila license, something we are studying today while investigating for more licenses in what could turn into one of Europe's last remaining oil frontiers.

And least but not last, our studies over Gotland has so far yielded more than 40 potentially oil bearing reefal structures. We would like to conduct further studies over these and have in this regard been granted an extension on our Gotland license as well as submitted an application for another one.
So Oman remains at the core but the periphery is also revving up, so stay with us we are maturing but still growing. Stockholm in February 2011

This release is an extract of that published by the Issuer. Accordingly, MAC Capital Limited accepts no responsibility to the accuracy of the information provided.

About Tethys Oil AB

Tethys Oil is a Swedish energy company focused on identification and development for production of oil and natural gas assets in the Middle East, North Africa and Europe. Tethys' strategy is to primarily invest in projects in areas with known oil and natural gas discoveries that have not been properly appraised using modern technology. In this way, high returns can be achieved with limited risk.

The company has interests in licences in Oman, Morocco, France, Spain, Turkey and Sweden. The shares are listed on First North (TETY) in Stockholm. Remium AB is Certified Adviser.

Website: www.tethysoil.com

For further information, please contact
Magnus Nordin
Managing Director
Phone +46 8 679 4995
magnus@tethysoil.com

NOTES FOR THE EDITOR: