TIDMTLOU
RNS Number : 9433G
Tlou Energy Ltd
29 July 2019
29 July 2019
Tlou Energy Limited
("Tlou" or "the Company")
OPERATIONAL REPORT - QUARTERING 30 JUNE 2019
Tlou Energy Limited is an ASX, AIM and BSE listed company
focused on delivering power in Botswana and southern Africa through
the exploration and development of coal bed methane (CBM) natural
gas.
Key events during the quarter:
-- The Lesedi 3 & 4 pods continue to dewater and produce gas
from the coal as the Company aims to confirm commercial gas flow
rates, with further updates to be provided in near term;
-- Progress in the gas-to-power tender has led to Tlou
successfully going through the technical and financial evaluation
stages, and is now at the final stage, being the negotiation of a
Power Purchase Agreement;
-- Downstream environmental approval has been secured. The
authorisation is valid for 30 years and includes development of CBM
power generation, including the drilling of up to 200 production
pods and installation of transmission lines.
Dewatering and gas flow testing
During the quarter the Company's operations have made excellent
progress and are proceeding according to plan at the Lesedi CBM
project.
In the first quarter of the year the Company completed the
drilling of two production pods, designated Lesedi 3 and Lesedi 4.
Dewatering of the coal then commenced. During the current quarter,
dewatering continued at these pods with both wells reaching
Critical (gas) Desorption Pressure (CDP). Reaching CDP is a
positive milestone in the operation and means that as a result of a
successful dewatering process, gas begins to come out of the
coal.
The next stage of the operation involves continued water pumping
which should see gas pressure steadily increase to an optimal point
so that sustained testing and flaring of the gas can begin. The aim
is to achieve a continuous flow of gas from the well. A CBM gas
flow typically starts out from an initial rate and then steadily
increases to reach a commerciality threshold.
As part of this process, gas is periodically flared from the
wells. Post quarter end a short-term flow test was successfully
conducted at Lesedi 3 and a video clip of the gas flare from this
test is available on our website
http://tlouenergy.com/presentations.
The Company looks forward to being able to announce a commercial
gas flow rate. In the interim operations personnel are carefully
managing the testing procedures to try and ensure the best possible
result. The dewatering and gas flow testing process is separate
from the gas-to-power tender negotiations. Further updates on the
progress of the wells will be provided as operations continue.
Gas-to-Power Tender
In October 2018 the Company submitted a comprehensive response
to the Request for Proposal (RFP) for the Development of a Maximum
of 100MW of Coal Bed Methane Fuelled Power Plants in Botswana.
During the quarter, the Company successfully passed the
technical and financial evaluation stages of the gas-to-power
tender. The process is now at the negotiations stage, aimed at
agreeing a Power Purchase Agreement. These negotiations are
confidential and are being led by the government of Botswana.
Further progress will be announced by the government in due
course.
Downstream Environmental Impact Statement approval
Botswana's Department of Environmental Affairs (DEA) has
approved the Environmental Impact Statement (EIS) for up to 20MW of
CBM power generation including the drilling of up to 200 production
pods, a 66kV Transmission Line and a Solar Farm up to 20MW.
In 2018 the Company commenced work on its application for an EIS
for downstream development (power generation and transmission). The
Company already has approval in place for its upstream activities
(development drilling and exploration).
Downstream EIS approval is a major achievement as it is the
final environmental authorisation required to move the Lesedi CBM
Project through to commercialisation. The EIS is for all the
specified project activities in the Company's application, is valid
for 30 years and provides the Company the flexibility to rapidly
expand power generation activities.
Project areas
The Company has three project areas in Botswana:
-- Lesedi Project - Early stage Development, Exploration
-- Mamba Project - Exploration
-- Boomslang Project - Exploration
A brief summary of each area is outlined below.
Lesedi CBM Project Area, Botswana
Licences: Mining Licence 2017/18L, Prospecting Licences 001
& 003/2004 and 35 & 37/2000
Ownership: Tlou Energy Limited 100%
The Lesedi project covers an area of approximately 3,800 Km(2)
and consists of four Coal and CBM Prospecting Licences (PL) and a
Mining Licence. The Mining Licence area is currently the focal
point for the Company's operations and includes the Lesedi 3 and 4
development wells which are currently being dewatered and flow
tested following the recent drilling program.
The status of the Lesedi area licences is as follows:
Licence Expiry Status
Mining Licence 2017/18L August 2042 Current
--------------- --------
PL 001/2004 March 2021 Current
--------------- --------
PL 003/2004 March 2021 Current
--------------- --------
PL 035/2000 September 2020 Current
--------------- --------
PL 037/2000 September 2020 Current
--------------- --------
Mamba Project Area, Botswana
Licences: Prospecting Licences 237-241/2014
Ownership: Tlou Energy Limited 100%
The Mamba project consists of five Coal and CBM PL's covering an
area of approximately 4,500 Km(2) . The Mamba area is considered to
be highly prospective being situated adjacent to Tlou's Lesedi CBM
Project and being on-trend with the encouraging results observed to
date. In the event of a gas field development by Tlou, the Mamba
area provides the Company with considerable flexibility and
optionality.
The status of the Mamba area licences is as follows:
Licence Expiry Status
PL 237/2014 September 2019 Current
--------------- --------
PL 238/2014 September 2019 Current
--------------- --------
PL 239/2014 September 2019 Current
--------------- --------
PL 240/2014 September 2019 Current
--------------- --------
PL 241/2014 September 2019 Current
--------------- --------
Renewal applications for the Mamba licences were submitted in
June 2019, with an update on the applications expected to be
received in September 2019.
Boomslang Project Area, Botswana
Licences: Prospecting Licence 011/2019
Ownership: Tlou Energy Limited 100%
The Company's newest licence, PL011/2019 designated "Boomslang",
is valid for an initial term of 3 years. The licence area is
approximately 1,000 Km(2) and is situated adjacent to the Company's
existing licences. The Boomslang area is located on-trend with the
encouraging results observed to date at the Lesedi project and is
considered to be highly prospective.
The award of the Boomslang licence area (adding to the Company's
existing Lesedi and Mamba Project areas) provides the Company with
additional flexibility and optionality.
The status of the Boomslang area licence is as follows:
Licence Expiry Status
PL 011/2019 March 2022 Current
----------- --------
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
****
For further information regarding this announcement please
contact:
Tlou Energy Limited +61 7 3012 9793
Tony Gilby, Managing Director
----------------------
Solomon Rowland, General Manager
----------------------
Grant Thornton (Nominated Adviser) +44 (0)20 7383 5100
----------------------
Samantha Harrison, Colin Aaronson, Harrison
Clarke, Seamus Fricker
----------------------
Shore Capital (Broker) +44 (0) 207 408 4090
----------------------
Jerry Keen, Toby Gibbs, Mark Percy
----------------------
+44 (0) 7891 677
FlowComms Limited (Investor Relations) 441
----------------------
Sasha Sethi
----------------------
Company Information
Tlou Energy is focused on delivering Gas-to-Power solutions in
Botswana and southern Africa to alleviate some of the chronic power
shortage in the region. Tlou is developing projects using coal bed
methane (CBM) natural gas. Botswana has a significant energy
shortage and generally relies on imported power and diesel
generation to fulfil its power requirements. As 100% owner of the
most advanced gas project in the country, the Lesedi CBM Project,
Tlou Energy provides investors with access to a compelling
opportunity using domestic gas to produce power and displace
expensive diesel and imported electricity.
The Company is listed on the Australian Securities Exchange,
London's AIM market and the Botswana Stock Exchange and is led by
an experienced Board, management and advisory team including
individuals with successful track records in the CBM industry.
Since establishment, the Company has significantly de-risked the
project in consideration of its goal to become a significant
gas-to-power producer. The Company flared its first gas in 2014 and
has a 100% interest over its Mining Licence and ten Prospecting
Licences covering an area of 9,300 Km(2) in total. The Lesedi and
Mamba Projects already benefit from significant independently
certified 2P gas Reserves of 41 BCF. In addition, 3P gas Reserves
of 427 BCF and Contingent Gas Resources of 3,043 BCF provide
significant additional potential.
The Company is planning an initial scalable gas-to-power
project. Following successful implementation of this first scalable
project, the Company looks forward to evaluating longer-term
prospects for the delivery of electricity generated from CBM in
Botswana to neighbouring countries.
+Rule 5.5
Appendix 5B
Mining exploration entity and oil and gas exploration entity
quarterly report
Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97,
01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16
Name of entity
-----------------------------------------------------
Tlou Energy Limited
ABN Quarter ended ("current quarter")
--------------- ----------------------------------
79 136 739 967 30 June 2019
----------------------------------
Consolidated statement of cash Current quarter Year to date
flows $A'000 (12 months)
$A'000
1. Cash flows from operating
activities
1.1 Receipts from customers
1.2 Payments for
(a) exploration & evaluation (580) (6,584)
(b) development (6) (34)
(c) production
(d) staff costs (358) (1,623)
(e) administration and corporate
costs (366) (1,451)
1.3 Dividends received (see note
3)
1.4 Interest received 1 7
1.5 Interest and other costs of
finance paid
1.6 Income taxes paid
1.7 Research and development refunds
1.8 Other 69 683
---------------- -------------
Net cash from / (used in)
1.9 operating activities (1,240) (9,002)
----- ------------------------------------- ---------------- -------------
2. Cash flows from investing
activities
2.1 Payments to acquire:
(a) property, plant and equipment (79) (1,988)
(b) tenements (see item 10)
(c) investments
(d) other non-current assets
2.2 Proceeds from the disposal
of:
(a) property, plant and equipment
(b) tenements (see item 10)
(c) investments
(d) other non-current assets
2.3 Cash flows from loans to
other entities
2.4 Dividends received (see note
3)
2.5 Other (provide details if
material)
---------------- -------------
Net cash from / (used in)
2.6 investing activities (79) (1,988)
------- ----------------------------------- ---------------- -------------
3. Cash flows from financing
activities
3.1 Proceeds from issues of shares 4,107 9,596
3.2 Proceeds from issue of convertible
notes
3.3 Proceeds from exercise of
share options
Transaction costs related
to issues of shares, convertible
3.4 notes or options (46) (306)
3.5 Proceeds from borrowings
3.6 Repayment of borrowings
3.7 Transaction costs related
to loans and borrowings
3.8 Dividends paid
3.9 Other (provide details if
material)
---------------- -------------
Net cash from / (used in)
3.10 financing activities 4,061 9,290
------- ----------------------------------- ---------------- -------------
4. Net increase / (decrease)
in cash and cash equivalents
for the period
Cash and cash equivalents
4.1 at beginning of period 2,522 7,019
Net cash from / (used in)
operating activities (item
4.2 1.9 above) (1,240) (9,002)
Net cash from / (used in)
investing activities (item
4.3 2.6 above) (79) (1,988)
Net cash from / (used in)
financing activities (item
4.4 3.10 above) 4,061 9,290
Effect of movement in exchange
4.5 rates on cash held (59) (114)
---------------- -------------
Cash and cash equivalents
4.6 at end of period 5,205 5,205
------- ----------------------------------- ---------------- -------------
5. Reconciliation of cash and Current quarter Previous quarter
cash equivalents $A'000 $A'000
at the end of the quarter
(as shown in the consolidated
statement of cash flows) to
the related items in the accounts
5.1 Bank balances 5,205 2,522
5.2 Call deposits
5.3 Bank overdrafts
5.4 Other (provide details)
---------------- -----------------
Cash and cash equivalents
at end of quarter (should
5.5 equal item 4.6 above) 5,205 2,522
---- ----------------------------------- ---------------- -----------------
6. Payments to directors of the entity and Current quarter
their associates $A'000
Aggregate amount of payments to these parties
6.1 included in item 1.2 237
----------------
6.2 Aggregate amount of cash flow from loans
to these parties included in item 2.3
----------------
6.3 Include below any explanation necessary to understand
the transactions included in items 6.1 and 6.2
----- -----------------------------------------------------------------
Office rent, Directors fees and salaries
7. Payments to related entities of the entity Current quarter
and their associates $A'000
7.1 Aggregate amount of payments to these parties
included in item 1.2
----------------
7.2 Aggregate amount of cash flow from loans
to these parties included in item 2.3
----------------
7.3 Include below any explanation necessary to understand
the transactions included in items 7.1 and 7.2
---- ----------------------------------------------------------------
8. Financing facilities available Total facility Amount drawn
Add notes as necessary for amount at quarter at quarter end
an understanding of the position end $A'000
$A'000
8.1 Loan facilities
------------------- ----------------
8.2 Credit standby arrangements
------------------- ----------------
8.3 Other (please specify)
------------------- ----------------
8.4 Include below a description of each facility above, including
the lender, interest rate and whether it is secured or
unsecured. If any additional facilities have been entered
into or are proposed to be entered into after quarter
end, include details of those facilities as well.
---- -------------------------------------------------------------------------
9. Estimated cash outflows for next $A'000
quarter
9.1 Exploration and evaluation 372
9.2 Development
9.3 Production
9.4 Staff costs 395
9.5 Administration and corporate costs 243
9.6 Other (Equipment) 111
-------
9.7 Total estimated cash outflows 1,121
---- ----------------------------------- -------
10. Changes in tenements Tenement Nature of interest Interest Interest
(items 2.1(b) reference at beginning at end
and 2.2(b) above) and location of quarter of quarter
10.1 Interests in
mining tenements
and petroleum
tenements lapsed,
relinquished
or reduced
----- --------------------- -------------- ------------------- -------------- ------------
10.2 Interests in
mining tenements
and petroleum
tenements acquired
or increased
----- --------------------- -------------- ------------------- -------------- ------------
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Sign here: .......Solomon Rowland............................
Date: .....29 July 2019.....
(Director/Company secretary)
Notes
1. The quarterly report provides a basis for informing the
market how the entity's activities have been financed for the past
quarter and the effect on its cash position. An entity that wishes
to disclose additional information is encouraged to do so, in a
note or notes included in or attached to this report.
2. If this quarterly report has been prepared in accordance with
Australian Accounting Standards, the definitions in, and provisions
of, AASB 6: Exploration for and Evaluation of Mineral Resources and
AASB 107: Statement of Cash Flows apply to this report. If this
quarterly report has been prepared in accordance with other
accounting standards agreed by ASX pursuant to Listing Rule 19.11A,
the corresponding equivalent standards apply to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities,
depending on the accounting policy of the entity.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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