Tethys Announces Significant Gas Discovery.

Business Editors

CALGARY, Alberta--(BUSINESS WIRE)--March 12, 2001

Tethys Energy Inc. (TSE:TET.) is pleased to announce that it has participated with a 50% working interest, with Petro-Canada Oil & Gas, in a significant gas discovery in the Townsend area of northeastern British Columbia.

The discovery was drilled in December 2000. The well was tested on a four point isochronal test with a final test rate of 11.4 million cubic feet per day.

The well is continuing to be flowed on an extended rate. Petro-Canada is the operator of the well and owns the remaining 50%. Tethys holds between 20% and 50% working interest in the land offsetting the discovery. Delineation drilling is expected to occur this summer with production targeted for the fourth quarter of 2001.

Statements in this press release contain forward-looking statements including expectations of future production and capital expenditures. Information concerning reserves may also be deemed to be forward-looking statements as such estimates involve the implied assessment that the resources described can be profitably produced in future. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to: the background risks of the oil and gas industry (e.g., operational risks in development, exploration and production; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures.

Tethys Energy is a Calgary-based oil and gas exploration company operating in Western Canada. Tethys shares are traded on the Toronto Stock Exchange under the trading symbol TET.