Tethys Petroleum said Olisol has not met certain funding requirements and considered it to be in breach of an Investment Agreement.
Tethys said it continued to work with Olisol to complete the private placement, same time evaluating alternative funding arrangements.
This following approval of The Grand Court in the Cayman Islands on August 19, 2016 to reduce the par value of Tethys' ordinary shares from $0.10 to $0.01.
It had worked with Olisol and its advisors to complete the previously announced C$9.8m private placement by September 2, 2016.
The company made the necessary filing with the Cayman Islands Registrar of Companies on August 31, 2016 at which time the reduction in par value became legally effective.
The Investment Agreement required a closing date two business days after all closing conditions have been satisfied or waived by the parties.
Tethys was prepared to complete the private placement with Olisol on September 2, 2016 as originally scheduled or to agree a short extension with Olisol if Olisol met certain funding commitments.
"As Olisol has not done so the Company considers Olisol to be in breach of the Investment Agreement," Tethys said.
"The Company continues to work with Olisol to complete the private placement whilst at the same time evaluating alternative funding arrangements.
"Olisol continues to advance funds required under its' obligation of the terms of the Investment Agreement to the Company in order to meet working capital needs and has advanced a total of US$452,000 to the Company in recent days."
At 9:07am: (LON:TPL) Tethys Petroleum Limited share price was -0.5p at 1.38p