May 19, 2009

Tristan Oil Ltd. (the “Company”) today announced that the Company and its external auditors require additional time to complete the review of the Company's financial statements for the three months ended March 31, 2009. The Company intends to make available its financial report for the three months ended March 31, 2009 by June 1, 2009.

As previously disclosed, Kazpolmunay (“KPM”) and Tolkynneftegaz (“TNG”) are subject to excess profits tax for the year ended December 31, 2008, amounting to $11.2 million and $20.8 million, respectively. Neither KPM nor TNG were able to pay the excess profit tax on May 15, 2009. As a result, KMP and TNG’s bank accounts in Kazakhstan have been seized by the TCMF. To date, the Tax Committee of the Republic of Kazakhstan Ministry of Finance (the “TCMF”) has taken approximately $900,000 from the bank accounts to apply toward the excess profit tax. The bank accounts will remain seized until the excess profit tax is paid in full.

KPM and TNG hope to pay the tax by May 22, 2009. Failure to do so could result in the TCMF taking KPM and TNG’s oil, gas and condensate production until such time as revenues from the sale of such production are sufficient to pay the excess profit tax in full.

In addition, the TCMF, in connection with an audit of KPM and TNG, has alleged that KPM and TNG failed to pay a total of approximately $45 million and $24 million, respectively, in taxes and interest. The TCMF claims that KPM and TNG incorrectly deducted expenses in 2007 and 2008 in connection with its drilling activities, which is inconsistent with the view taken by TCMF in the past regarding the accounting treatment of such expenses. 

KPM and TNG believe that this tax assessment violates Kazakhstan law and its subsoil use contracts, and are disputing this assessment in the local Kazakh courts. 

In connection with the ongoing criminal investigations of KPM and TNG, initiated by the Department for Fighting Economic Offences and Corruption of the Mangistau Region of Kazakhstan (the “Department”), the Department alleges that KPM and TNG operated a main pipeline without obtaining a state license and that all income earned by KPM and TNG in connection with production that was transported via this pipeline was done so illegally. The Department’s view on this matter is inconsistent with its, and other Kazakh governmental entities’, characterization and treatment of this pipeline.

On May 15, 2009, the Department notified KPM and TNG that it was seizing the assets of KPM and TNG and their shareholders’ equity interest in KPM and TNG. The effect of such seizure is that KPM and TNG, as well as their shareholders, shall refrain during the investigation from selling and/or transferring the assets of KPM and TNG and the equity interest in KPM and TNG to third parties, but may use the assets in their normal business operations. The Company strongly disagrees with such actions and intends to appeal the Department’s decision in the local courts.

Despite the increasingly challenging environment for KPM and TNG in Kazakhstan, and the fact that the Company has no assurance its legal challenges will ultimately prevail, the Company is continuing its efforts to resolve the ongoing claims and litigation matters with the Kazakh authorities and reestablishing normal operating activity.

Contact:

Tristan Oil Ltd.

Artur Lungu, +373 69602130
This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Popovici Mihail, +373 79523211
This e-mail address is being protected from spambots. You need JavaScript enabled to view it