Manas Petroleum Corp. Financial and Operations Update as of June 30, 2011

BAAR, Switzerland, Aug. 11, 2011 /PRNewswire/ -- Manas Petroleum Corp. ("Manas") (TSX-V: MNP; OTCBB: MNAP) is pleased to report that it has filed on EDGAR and on SEDAR its quarterly report on Form 10-Q for the second quarter of 2011.  The complete document can be viewed at either www.sedar.com or www.sec.gov.

Financial Results for the Six Month Period ended June 30, 2011

Net loss for the six month period ended June 30, 2011 was $18,673,829 as compared to net income of $55,912,188 for the same period in 2010. This is a decrease of $74,586,017 and is mainly related to our investment in Petromanas. For the six month period ended June 30, 2011, we recorded a decrease in fair value of investment in associate of $16,236,143. In the six month period ended June 30, 2010 we recorded an initial gain from sale of subsidiary (Manas Adriatic) of $57,850,918 and a subsequent increase in fair value of investment in associate (Petromanas) of $2,934,535. Operating Expenses for the six month period ended June 30, 2011 decreased to $2,374,067 from $4,989,167 reported for the same period in 2010. This decrease of 52% or $2,615,100 in our total operating expenses is mainly attributable to lower stock-based compensation expenses in personnel costs and consulting fees.

Liquidity and Capital Resources

Our cash balance as of June 30, 2011 was $18,874,300. Our total current assets as of June 30, 2011 amounted to $19,453,485 and total current liabilities were $382,017 resulting in net working capital of $19,071,468.

Of the 200,000,000 common shares of Petromanas held by us, 80,000,000 were freely tradable as of June 30, 2011. The market value of these freely tradable shares was approximately $23,750,000.

Shareholders' equity as of June 30, 2011 was $75,340,731.

On May 6, 2011, we completed a public offering of units pursuant to a long form prospectus filed in all of the Provinces of Canada except Quebec and a registration statement on Form S-1 filed with the Securities and Exchange Commission in the United States. In the offering, we sold a total of 44,450,500 units at a price of $0.50 per unit for aggregate gross proceeds of $22,225,250. Each unit consisted of one share of common stock in the capital of our company and one common share purchase warrant, and each warrant entitles the purchaser to purchase one additional common share until May 6, 2014 at a purchase price of $0.70 per share.

Also on May 6, 2011, shares of our common stock and all of the unit warrants sold in the public offering were listed on the TSX Venture Stock Exchange.

Recent Developments

Mongolia

Work Program

Our 2011 work program in Mongolia is based on the integration of all available data, acquired by Gobi Energy Partners ("Gobi") from the region. We were concentrating on our two blocks – Block XIII, Tsagaan Els and Block XIV, ZuunBayan – and the area operated today by Dongsheng, which just finalized their field development. Gobi acquired these data by own surveys in the last years or from former operators and the authorities. The data include 431 wells and 951 km 2 D seismic besides several gravity surveys, field data and last year's seismic.

This evaluation resulted in a work program consisting of up to 1700 km 2 D seismic. It covers 10 prospective areas over both blocks, identified by the integrated approach. The 2 D survey is designed in 8 phases without any interruption between the phases; however, some phases show interdependencies. The contract with the seismic contractor is based on 532 km full fold as a firm program and a further 1,106 km full fold as an optional program.

Preparation and mobilization has commenced and the acquisition is expected to begin in mid-August 2011.

Gobi signed the agreement for Seismic Services with Sinopec Mongolia LLC ("Sinopec"), a wholly-owned subsidiary of China Petrochemical Corporation (Sinopec Group), on July 12, 2011. Sinopec has extensive seismic experience in this area. Sinopec offers all services from seismic to drilling and drilling related services. We expect Sinopec will use Sercel equipment for the survey. The total cost of the whole program, including mobilization and demobilization, is projected to be US$4.2 million. Nine companies participated in the tender.

Through this seismic survey we expect all exploration prospects will be identified respectively outlined, and it will increase the chances of success of the exploratory wells we intend to drill upon completion and interpretation of the new data. The first well is anticipated to be spudded in the second quarter of 2012.

Corporate

On May 11, 2011 DWM Petroleum AG received permission from the Mongolian Petroleum Authority to transfer the title of both PSCs covering Blocks Zuunbayan-XIV and Tsagaan Els XIII to its newly created Swiss subsidiary Gobi Energy Partners GmbH. After the restructuring DWM, through its subsidiary, will have a working interest of 74%. Currently the Mongolian team is finalizing the documentation process enabling the transfer of the local company Gobi Energy Partners LLC to Gobi Energy Partners GmbH.

Ferghana Projects (Tajikistan, Kyrgyz Republic)

General

The following activities were performed for both projects:

• Regional cross-section preparation
• Fergana regional geology
• Updated/improved Fergana fields directory
• Maintain/Improve well, seismic, map etc database
• Prepare for and present to external Auditor Gustavson and associates – assist in report preparation.

Tajikistan

• Somon Oil, in which we hold a 90% interest, contracted the Kazak crew "Dank" to perform a seismic project, which commenced on February 13, 2010 in the southern license areas and locally across the Kyrgyz-Tajik border. This seismic acquisition was completed on June 4, 2010. Data quality is generally good to excellent. Technical database compilation and integration is ongoing. Reprocessing of 470km of 2007-2008 seismic in conjunction with the new data is proceeding.
• A production sharing agreement has been drafted and submitted to the Tajik Ministry of Energy. We continue to negotiate the form of the production sharing agreement with various interested agencies of the government of Tajikistan. We believe that the finalization and ratification of the production sharing agreement is the last hurdle in order for Santos International Ventures Pty Ltd. to exercise its farm-in option.
• The following activities were performed during the three-months ended June 30, 2011:
• Unification and update of resource evaluation of all Tajik prospect and leads;
• Prospect and leads maturation including mapping and re-mapping of both Western and Northwestern Ps, data integration and seismic interpretation (continuing);
• Seismic interpretation for West Supetau prospect evaluation including TWT to Depth conversion completed;
• Play analysis and HC charge model improved;
• 2011 Drilling workshop prepared and successfully conducted;
• Well design, data audit and drill planning for West Supetau-4 and Chkalovsk-1 (near to close gate 2) continuing;
• Preparation of Well Evaluation Program and Testing continuing;
• W-Supetau and Chkalovsk P-T analysis and prognosis completed;
• 2011 seismic acquisition planning and updated completed;
• Seismic technical project (2011) preparation (audit and edit) completed and submitted for Tajik Government approval; and
• Chkalovsk drilling technical project preparation (audit and edit): technical part completed and submitted for Tajik Government approval and cost evaluation continuing.

Kyrgyz Republic

• South Petroleum Company, a closely held Kyrgyz company in which we own a 25% minority equity interest, continued its geological studies within the four license areas owned by it.  Although we do not direct management of South Petroleum Company and we are not the operator of its project, we do receive periodic updates on the status of that project from the operator.
• The following activities were performed during the three-month ended June 30, 2011:
• No Health and Safety Incidents during the 2nd Quarter
• Ongoing work on administration of SPC offices both in Bishkek and Jalalabat;
• Digitizing old geological data: old drilling reports and seismic data;
• Integration of present geological and geophysical data;
• Drilling meetings commenced in support of Tajikistan Drilling:
• Reviewing all previous services and supply contracts for conformity and use in the year 2011;
• Working through the supply routes: Kazakhstan, China to Kyrgyzstan etc.;
• Reviewing and commenting on the new draft laws on Subsoil, Licensing, Somon Oil PSA, etc.;
• Reviewing tax legislation and applicability to SPC operations;
• Support in preparation of the draft PSA for Somon-Tajik;
• Support in meetings held in Dushanbe on the PSA: translation of documents and meetings;
• Submitted SPC's half year (2011) report to the Ministry of Geology on all of SPC's license areas; and
• Obtained Ministry of Energy approval for all Year End reports and program deferrals.
• Information provided in this press release pertaining to the exploration project in the Kyrgyz Republic owned by South Petroleum Company has been provided to our company by the operator of that project, with which we deal at arms length, and is included in this press release in an effort to share that information with the public.  Although we have no reason to doubt the accuracy of this information, we expressly disclaim responsibility therefore and make no representation or warranty that it is complete or correct.

Chile

On January 29, 2010, we signed an agreement to assign our interest in our Chilean project in exchange for a return of all of the money that we have invested in this project to date (i.e. approximately $70,000) and relief from all currently outstanding and future obligations in respect of the project. This agreement and the assignment of our interest in this project have been approved by all levels of the Chilean Government. The transfer of our participation in this project to the new owners is now subject to approval by the parties.

About Manas Petroleum Corp.

Manas Petroleum is an international oil and gas company with primary focus on exploration and development in South-Eastern Europe, Central Asia and Mongolia.  In Albania, Manas participates in a 1.7 million acre exploration project through its equity interest in Petromanas Energy Inc., a Canadian public company.  In Kyrgyz Republic, Manas has signed a US$54 million farm-out agreement with Santos International Holdings Pty Ltd., a subsidiary of Australia's third largest oil and gas company. In addition to the development of its Kyrgyz Republic project, Santos is developing the company's neighboring Tajikistan license under an option farm out agreement.  In Mongolia, Manas owns record title to the two Production Sharing Contracts covering Blocks XIII and XIV through its wholly-owned subsidiary DWM Petroleum AG, but 26% of the beneficial ownership interest in these blocks is held in trust for others.

For further information please contact:

Roger Jenny
Corporate Secretary
Manas Petroleum Corp.
Bahnofstr. 9, P.O. Box 155
CH-6341 Baar, Switzerland
Phone: +41 44 718 1030
Fax:  +41 44 718 1039
Email: [email protected]
Web: www.manaspete.com

Cautionary Note About South Petroleum Company:

Information provided in this Press Release pertaining to the exploration project in Kyrgyztan owned by CJSC South Petroleum Company has been provided to Manas Petroleum Corporation by the operator of that project, with which Manas Petroleum deals at arms length, and is included in this Press Release in an effort to share that information with the public.  Although Manas Petroleum has no reason to doubt the accuracy of this information, it expressly disclaims responsibility therefor and makes no representation or warranty that it is complete or correct.

Cautionary Note to U.S. Investors:

The United States Securities and Exchange Commission (the "SEC") permits oil and gas companies, in their filings with the SEC, to separately disclose proved, probable and possible reserves that have been determined in accordance with SEC rules.  We use certain terms in this press release, such as "prospective resources" and "potential resources" that the SEC's guidelines strictly prohibit in filings with the SEC by U.S. oil and gas companies.  U.S. investors should refer to our Annual Report on Form 10-K available from us or the SEC for oil and gas disclosure that complies with the SEC requirements.

DISCLAIMER

Forward-Looking Statement Disclaimer

This press release contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management's plans and objectives for future operations. In some cases you can identify forward-looking statements by the use of terminology such as "may", "should", "anticipates", "believes", "expects", "intends", "forecasts", "plans", "future", "strategy", or words of similar meaning. Forward-looking statements in this press release include statements about Manas' plan to conduct the acquisition of the seismic data in Mongolia in 8 phases, its expectation that the acquisition of the seismic data will begin mid-August, its expectation that Sinopec will use Sercel equipment for the survey, its projection that the total cost of the seismic program will be US$4.2 million, its intention to drill exploratory wells upon completion and interpretation of the new data, its anticipation that the first well in Mongolia will be spudded in the second quarter of 2012, and its belief that the finalization and ratification of the production sharing agreement in Tajikistan is the last hurdle in order for Santos International Ventures Pty Ltd. to exercise its farm-in option.  While these forward-looking statements and any assumptions upon which they are based are made in good faith and reflect current judgment regarding the direction of Manas' business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this press release. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks presented by the market price and volume of trading in shares of Petromanas Energy Inc., field conditions and the risks described in Manas periodic disclosure documents filed on SEDAR and EDGAR, copies of which are also available on the company's website at www.manaspetroleum.com. Any of these risks could cause Manas' or its industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Except as required by applicable law, including the securities laws of the United States and Canada, Manas does not intend to update any of the forward-looking statements to conform these statements to actual results.

SOURCE Manas Petroleum Corp.