Kulob Petroleum , a subsidiary of Tethys Petroleum , has signed a memorandum of understanding to execute a farm-out agreement on the Bokhtar production-sharing contract in Tajikistan, according to a news release.

Based on the terms contained in the MOU, the parties will now negotiate a farm-out agreement and a joint-operating agreement, which are planned to be executed in the near future when the farmee and all commercial terms will be disclose, the release said. The farm-out is subject to final agreement on the commercial and legal issues, finalization of due diligence, and Tajik governmental approval. A period of exclusivity has been granted to the farmee during the negotiations.

The 25-year Bokhtar PSC was signed in 2008 and covers a total area of approximately 35,000 sq km (13,514 sq miles)in the Afghan Tajik portion of the Amu Darya basin west of the Pamir mountains. The area included in the PSC is in the southwestern part of Tajikistan and is a large, highly prospective region that has existing oil and gas discoveries but has seen limited exploration to date. An independent resource report dated June 30 estimates gross unrisked mean recoverable resources of 27.5 Bboe, consisting of 114 Tcf of gas and 8.5 Bbbl of oil, the release said.