Tlou Energy today listed its shares on Main Board of the Botswana Stock Exchange(BSE) to establish a platform for future raising of development capital to realize Tlou Energy’s growth plans, raise its regional profile and improve the liquidity of the shares.
In conjunction with the Listing, Tlou Energy is seeking to raise P33,000,000 to commence first phase development drilling at its Lesedi CBM Project (“Lesedi Project”). Tlou Energy is an AIM and ASX listed company whose business involves the appraisal for and proposed production of CBM gas.
The Company’s focus is on its prospecting licences in Botswana, considered highly prospective for CBM, with sizeable independently assessed CBM Reserves and Resources.
“This listing is extending an opportunity to most Batswana to own a share of Tlou Energy. We have independently certified gas reserves and enough gas deposits to generate 100MW of power for over 30 years based on studies we have undertaken already on a small area,” said Gabaake Gabaake Executive Director of Tlou Energy.
He said, “We have also received an Environmental Impact Assessment approval(EIA) and are quite happy that we are on the verge of developing a new revenue source for Botswana.”
Tlou Energy’s most advanced project, the Lesedi CBM Project (“Lesedi Project”), is located in the Karoo Kalahari Basin in south-eastern Botswana. Having advanced the Lesedi Project, through the exploration and appraisal phase, Tlou Energy is now focused on development.
Tlou Energy is a company registered in Australia on the 16 March 2010 with Company Number ACN 136 739 967 as a public company and registered as an external company in Botswana, in terms of the Companies Act on the 7th November 2017.
In 2009, Tlou Energy entered into a joint venture arrangement with Saber in respect of the Lesedi Licences and certain other licences in Botswana held by Saber. The joint venture terminated in November 2010 when Tlou acquired the companies that held the Licences that were subject to the joint venture with Saber and became the sole operator and 100% owner of the Licences.
Over the last 7 years, Tlou Energy has made significant progress at the Lesedi Project, which is now viewed as the most advanced CBM Project in Botstwana, given its certified reserves position, environmental approval for gas field development and the award of a Mining Licence.
While its focus continues to be on the Lesedi Project, Tlou Energy was awarded additional licences in 2014 as part of a competitive tendering process administered by the Botswana MMEWR.
Operations in the Lesedi Project area have been ongoing from 2007, with Tlou Energy’s involvement commencing in 2009. Over 50 wells have been drilled since this time by Tlou Energy and previous operators, including 16 core holes yielding good quality technical data suitable to support a detailed understanding of the subsurface coal characteristics and associated reservoir models.
In addition to core holes, the Company has drilled a series of both vertical and horizontal pilot pods. Leveraging the Australian CBM industry experience of Tlou Energy’s founders, the Company pioneered the drilling of “surface to in-seam” horizontal wells in Botswana in 2013 intersecting approximately 3,500 metres of Lower Morupule coal.
In 2014, the Company flowed its first gas from the Selemo horizontal pilot pod. Production testing at Selemo has been ongoing with consistent gas production demonstrated now for over 12 months . CBM gas from the Selemo pilot pod has been used to generate power via a 60kVA Cummins generator to operate its pumps and metering at the wellsite, proving the conversion of gas to power for the first time in the country.
In total over US$50 million has been spent by Tlou Energy (and its predecessor) on exploration and drilling activities. Tlou Energy intends to follow a similar systematic approach with respect to project development. The long-term development concept for the project involves producing up to 100MW of CBM power, consistent with the recently submitted response to the Botswana Government’s Request for Proposal. It is proposed that the project be developed in stages, with the initial stage comprising an incremental 10MW project targeting first power sales from 2019.
Tlou has environmental approval in place for the gas field development of its Lesedi Project, having received notification in September 2016 from the Botswana Department of Environmental Affairs that its Environmental Impact Statement (“EIS”) had been approved. This followed a two year process and extensive public consultation meetings.
A Mining Licence was subsequently awarded in August 2017. This was the first CBM Mining Licence to be granted in Botswana, and covers a large area of approximately 900 square kilometres.
Tlou’s independently certified reserves are believed to represent the only gas Reserves currently identified in Botswana. Following the current 2017 appraisal program, Tlou expects a material upgrade to its current gas Reserves position.
The energy markets in Botswana and Southern Africa are underdeveloped and will continue to suffer from a deficit of supply in the medium term. In response to power shortages in its domestic market of South Africa, the largest supplier of electricity in the region, Eskom, is progressively terminating power export agreements to other countries in southern Africa whilst continuing to rely on coal resources for its aging power stations.
“It adds to many successes we have had on the Botswana Stock Exchange over the years. We were the first Stock Exchange outside of South Africa to list ETF’s. More recently, the BSE has been tasked to lead the region in terms of bond issuance,” revealed Tshepo Tsheole, Chief Executive of the Botswana Stock Exchange(BSE).
He said, “The listing adds to diversity of investment instruments available on local bourse. It is the 6th this year and 11th listed on the Botswana Stock Exchange. P2.9billion worth of bonds have now been listed on the stock exchange although P1.3billion have been delisted. We remain in the positive and later this year we have the first US$ denominated bond placed by Investec.”
Tlou Energy’s current work program has been designed to expand certified 2P and 3P Gas Reserves, select the optimal location to commence production drilling; and provide final inputs for a bankable feasibility study for Stage 1 of the Project (up to 10MW) in order to secure project funding.
Tlou Energy has recently appointed Velseis Pty Ltd (“Velseis”), an experienced seismic survey contractor, to undertake a seismic survey for both the Lesedi and Mamba permits. The seismic survey is expected to provide enhanced knowledge of sub-surface structures and resources in the project area, and is designed to expand gas Reserves or Resources.
Tlou plans to drill two pre-development production pods in early 2018. The location of these pods will be based on the preceding seismic and core hole results. These pods are planned to confirm the optimal location to commence Stage 1a production drilling with one of these pods in the successful location being used as a de-watering well for the new production pods.
