Recently, Hainan Mining held an investor meeting in Beijing, both online and offline, to discuss the completion of its Oman oilfield project. The meeting was attended by Mr. Teng Lei, Vice Chairman and President of Hainan Mining; Mr. Dong Shuxing, Vice President and Rotating CEO of ROC Oil; Ms. He Jing, Vice President and Board Secretary; Ms. Fang Wenyan, Vice President and CO-CEO of ROC Oil; and Mr. Zhang Lei, Assistant to the President and Managing Director of Investment. The discussions with investors focused on the transaction process, reserves, exploration and development plans, and post-investment integration of the Oman project.
On September 13, 2024, ROC Oil, a wholly-owned subsidiary of Hainan Mining, launched a cash tender offer to acquire at least 90% of Tethys Oil AB shares at SEK 58.7 per share. As of December 30, 2024, the tender offer and settlement were fully completed. ROC Oil now holds 29.04 million shares of Tethys, accounting for approximately 90.003% of the total shares, with a total transaction value of SEK 1.705 billion, equivalent to approximately USD 156 million. If calculated based on 100% equity, the total transaction value is USD 173 million - representing a 33% discount compared to Tethys's net assets of USD 258 million.
Furthermore, the Nasdaq Stockholm Stock Exchange has approved Tethys's delisting application, and the company was officially delisted on January 10, 2025. ROC Oil will proceed with the compulsory acquisition of the remaining shares in accordance with Swedish corporate law.
Tethys Oil AB is an oil exploration and production company with a seasoned operational and technical team and over 20 years of experience in onshore oil exploration and development. Its core assets include interests in four onshore oil blocks in Oman, covering a total area of approximately 60,000 KM2 （about 18% of Oman's land area）with nearly 90% of the area still undeveloped, offering substantial potential for resource growth and production increase. In addition, the five blocks are believed to have high natural gas potential.
Oman is a significant oil-producing country in the Middle East and globally, and a key partner in China's "Belt and Road" initiative. China is Oman’s largest trade partner and crude oil importer. Tethys’s oil contracts in Oman are based on a production-sharing model, with post-cost recovery profit-sharing ratios ranging from 20% to 30%.
Blocks 3 & 4 in Oman, held by Tethys, are currently producing. In 2023, the equity production reached 3.2 million barrels, with an average daily equity output of approximately 7,860 barrels in the first half of 2024. As of the end of 2023, Tethys had audited 2P reserves of about 21.7 million barrels. Upon completion of the acquisition, ROC Oil’s 2P net equity reserves will increase by approximately 123%, with total oil and gas reserves increasing by nearly 50% - from 22.3 million BOE to 32.69 million BOE. Crude oil assets will account for nearly 60% of the portfolio, significantly expanding ROC Oil's upstream scale.
The acquisition of Tethys Oil marks a major step forward in the company’s internationalization strategy, expanding its operations into the Middle East and strengthening its global operational capabilities. It also broadens future development prospects, optimizes ROC Oil's asset structure, increases the proportion of crude oil assets, and enhances overall profitability.
The contracts for Tethys’s producing oilfields in Oman have no less than 16 years remaining, while exploration blocks will have contract terms of no less than 15 years upon development plan approval. The full integration of Oman oilfield assets into ROC Oil will significantly extend the overall lifecycle of its oil and gas portfolio, ensure a smooth transition and continued production from existing projects, and lay a solid foundation for the company’s medium- to long-term sustainable development.