TIDMTLOU
RNS Number : 4419L
Tlou Energy Ltd
19 July 2017
19 July 2017
Tlou Energy Limited
("Tlou" or "the Company")
OPERATIONAL REPORT - QUARTERING 30 JUNE 2017
Tlou Energy Limited, the AIM and ASX listed company focused on
delivering power in Botswana and southern Africa through the
development of coal bed methane ('CBM'), is pleased to provide its
operational report in respect to its Lesedi CBM Project in Botswana
("Lesedi") for the quarter ended 30 June 2017.
Highlights
-- Contract for 250km seismic survey signed to commence in Q3 with aim to increase Gas Reserves and Resources
-- Mining Licence application lodged
-- First power generated from CBM following the installation of a Gas Generator - providing reduced spend on
diesel and a proof of concept of 'first gas monetisation'
-- Board bolstered with appointment of Non-Executive Director Hugh Swire and post quarter end the appointment of Ms.
Linah Mohohlo
TLOU ENERGY LIMITED PROJECTS
Lesedi CBM Project Area, Botswana
PLs 001-003/2004 and PLs 35 & 37/2000
Tlou Energy Limited 100%
The Lesedi project consists of five CBM prospecting licences in
Botswana covering an area of approximately 3,800km(2) . These
licences are currently the focal point for the Company's operations
and include the Selemo pilot project where the Company has been
producing gas for approximately 12 months.
The status of the five Lesedi Area Prospecting Licences is as
follows:
Prospecting Licence Expiry Status
-------------------- --------------- --------
PL 001/2004 March 2019 Current
-------------------- --------------- --------
PL 002/2004 March 2019 Current
-------------------- --------------- --------
PL 003/2004 March 2019 Current
-------------------- --------------- --------
PL 035/2000 September 2018 Current
-------------------- --------------- --------
PL 037/2000 September 2018 Current
-------------------- --------------- --------
Contract for 250km seismic survey signed
The Company entered into a contract for a 250 km 2D seismic
program with Velseis Pty Ltd, an Australian seismic acquisition and
processing company providing a fully integrated range of seismic
technologies. Velseis has built a reputation as the leading
Australian contractor in this field, with over 25 years of
experience throughout the Asia-Pacific Region. The seismic program
is scheduled to commence in Q3, 2017. It is envisaged this survey
will give the Company the opportunity to expand its gas reserves
and resources as it progresses towards developing the first CBM gas
to power project in Botswana.
The seismic survey will assist in the next step of Tlou's plan
to drill more wells by providing it with enhanced knowledge of the
sub-surface in its project areas. The results along with the data
from the subsequent planned core well program may also lead to
further gas reserves and contingent resources being certified.
Tlou lodges Mining Licence Application for the Lesedi CBM
project with the Ministry
The Company lodged a Mining Licence Application for the Lesedi
CBM project with Botswana's Department of Mines in the Ministry of
Mineral Resources, Green Technology and Energy Security ("the
Ministry"). The Mining Licence for the Lesedi CBM Project is the
first application of its kind to be lodged in Botswana.
In Botswana, holders of Prospecting Licences ("PL") are issued
Mining Licences once exploration on a relevant Prospecting Licence
has been concluded and the holder of the Prospecting Licence is
ready to commence commercial production. Mining Licences are
assessed in accordance with the prescribed statutory requirements
of the Botswana Mines and Minerals Act. Two major components of a
Mining Licence application are an approved EIA (granted for the
Lesedi Project in September 2016) and a feasibility study for the
relevant project.
Some of the benefits of a Prospecting Licence being converted
into a Mining Licence include:
1. Tenure: The permit being converted from a short-term
Prospecting Licence tenure (2-3 years) to a longer-term tenure (20+
years).
2. Commercial rights: A Mining Licence affords the holder the
legal right to sell the resource for which the licence has been
granted. The granting of a Mining Licence is therefore a
pre-requisite to commercialising a gas resource.
The award of the Mining Licence will be another milestone for
the Company which further enhances the first mover advantage to
develop a Gas-to-Power project in the country. The issue of a
Mining Licence will pioneer the development of a new and exciting
natural CBM gas industry in Botswana, an industry that will lead to
a new indigenous source of energy and employment for the country.
Over time, it will potentially allow new manufacturing industries
to develop using Botswana CBM gas and facilitate the creation of a
new renewable energy industry. This is due to gas being a
relatively clean and cost-effective way to provide peaking power to
complement the often-intermittent nature of renewable energy.
Conversion of field generation from diesel to gas
The Company generated its first power from CBM at its field in
Botswana following the installation of a Gas Generator at the
Selemo project area.
Power required to run pumps and metering at the Selemo wells was
previously supplied by diesel generators. During the quarter, the
Company's operations team replaced a diesel generator with a new
gas fired generator, running on the gas being produced from Tlou's
wells. This is the first Gas-to-Power via Tlou's CBM, and is a
significant milestone for the Company and in effect a proof of
concept of 'first gas monetisation'. This achievement reinforces
Tlou's view that CBM Gas-to-Power is achievable in Botswana using
gas from the Lesedi Project.
The Cummins G8.3 generator can supply up to 60 kVA of power and
has been customised to run on a small portion of the gas currently
being produced at the Selemo pilot which would otherwise be flared.
It is expected that the conversion of generation from diesel to gas
will initially reduce the Company's diesel requirements by
approximately 50,000 litres per year. These savings should grow
with time given that a second gas to power generation unit is
planned to be installed.
Mamba Project Area, Botswana
PLs 237-241/2014
Tlou Energy Limited 100%
The Mamba project consists of five CBM prospecting licences in
Botswana covering an area of approximately 4,500km(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.
Renewal applications were submitted for the Mamba licences in
March 2017. The Company has received confirmation from the
Department of Mines that they were unable to complete their review
of the renewal application prior to the end of June but undertook
to expedite their review as soon as possible.
The status of the Mamba Area Prospecting Licences is as
follows:
Licence Expiry Status
------------ ---------- -------------------------------------------
PL 237/2014 June 2017 Renewal Application submitted - March 2017
------------ ---------- -------------------------------------------
PL 238/2014 June 2017 Renewal Application submitted - March 2017
------------ ---------- -------------------------------------------
PL 239/2014 June 2017 Renewal Application submitted - March 2017
------------ ---------- -------------------------------------------
PL 240/2014 June 2017 Renewal Application submitted - March 2017
------------ ---------- -------------------------------------------
PL 241/2014 June 2017 Renewal Application submitted - March 2017
------------ ---------- -------------------------------------------
Corporate
In June 2017 the Company was pleased to announce that Mr Hugh
William Swire was appointed to the Board as a Non-Executive
Director.
Hugh, aged 37, is a partner in Mahon China, an established
investment management and advisory partnership based in Beijing.
Active in China since 1985, Mahon China have over three decades of
experience advising foreign companies with investments and
corporate activities in China.
Hugh has expert knowledge and direct investment experience in
the low carbon water, energy and technology sectors having
completed and exited investments into several leading companies in
the low carbon sector. Hugh travels to China regularly and using
his Chinese language skills after graduating from Oxford University
with a BA (Hons) in Chinese.
Post end of the quarter, Ms Linah Mohohlo, was also appointed to
the Board as a Non-Executive Director. Ms. Mohohlo is the former
Governor of the Bank of Botswana, holds a Bachelors Degree in
Economics from The George Washington University, Washington DC, a
Masters Degree in Finance and Investment from University of Exeter,
UK and a Diploma in Accounting and Business Studies from the
University of Botswana.
New Ventures
While Tlou is focussed on the Lesedi CBM project, the Company
will continue looking at potential areas of expansion should the
possibility arise.
****
Anthony Gilby
Managing Director
Tlou Energy Limited
Website: www.tlouenergy.com
For further information regarding this announcement please
contact:
Tlou Energy Limited +61 7 3012 9793
------------------------------------ ---------------------
Tony Gilby, Managing Director
------------------------------------ ---------------------
Solomon Rowland, Company Secretary
------------------------------------ ---------------------
Grant Thornton (Nominated
Adviser) +44 (0)20 7383 5100
------------------------------------ ---------------------
Samantha Harrison, Colin Aaronson,
Harrison Clarke
------------------------------------ ---------------------
+44 (0) 207 408
Shore Capital (Joint Broker) 4090
------------------------------------ ---------------------
Jerry Keen, Mark Percy, Toby
Gibbs
------------------------------------ ---------------------
Optiva Securities Limited
(Joint Broker) +44 (0)20 3137 1904
------------------------------------ ---------------------
Jeremy King, Christian Dennis
------------------------------------ ---------------------
St Brides Partners Limited +44 (0) 20 7236
(Public Relations) 1177
------------------------------------ ---------------------
Lottie Brocklehurst, Megan
Dennison
------------------------------------ ---------------------
FlowComms Limited (Investor +44 (0) 7891 677
Relations) 441
------------------------------------ ---------------------
Sasha Sethi
------------------------------------ ---------------------
Company Information
Tlou Energy is an AIM and ASX listed company focused on
delivering power in Botswana through the development of coal bed
methane ('CBM') gas. Botswana has a severe energy shortage and is
currently relying on expensive imported power and diesel generation
to deliver its requirements. However, as the 100% owners of the
most advanced gas project in the country, the Lesedi CBM Project,
Tlou Energy provides investors with access to a compelling
immediate and longer-term opportunity using domestic gas to produce
power and displace expensive diesel and import power market.
The Company is led by an experienced Board, management and
advisory team including individuals with successful track records
in the Australian CBM industry.
Since establishment in 2009, the Company has significantly
de-risked the project in consideration of its goal to become a
significant gas to power producer. The Company has the most
advanced CBM project in Botswana and flared its first gas in 2014.
It holds 10 Prospecting Licences covering an area of 8,300Km(2) and
the Lesedi Project already benefits from significant independently
certified Contingent Gas Resources of 3.2 trillion cubic feet (3C)
and independently certified Gas Reserves.
The Company is planning an initial scalable gas-to-power project
in Botswana. Following successful implementation of this first
scalable project, the Company plans to expand to provide further
power to Botswana and the southern African region.
+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 2017
--------------- ------------------------
Consolidated statement Current quarter Year to date
of cash 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 (199) (1,612)
(b) development
(c) production
(d) staff costs (328) (1,025)
(e) administration
and corporate costs (326) (1,364)
1.3 Dividends received
(see note 3)
1.4 Interest received 1 2
1.5 Interest and other
costs of finance paid
1.6 Income taxes paid
1.7 Research and development
refunds
Other (GST refunds,
Share related expenditure
1.8 as per AASB 132) (268) (199)
---------------- -------------
Net cash from / (used
1.9 in) operating activities (1,120) (4,198)
----- -------------------------------- ---------------- -------------
2. Cash flows from investing
activities
2.1 Payments to acquire:
(a) property, plant
and equipment
(b) tenements (see
item 10)
(c) investments
(d) other non-current
assets
2.2 Proceeds from the disposal
of:
(a) property, plant
and equipment (97) (101)
(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
2.6 in) investing activities (97) (101)
------- ------------------------------ ---------------- -------------
3. Cash flows from financing
activities
Proceeds from issues
3.1 of shares 6,292 9,939
3.2 Proceeds from issue
of convertible notes
3.3 Proceeds from exercise
of share options
Transaction costs related
to issues of shares,
convertible notes or
3.4 options (27) (162)
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
3.10 in) financing activities 6,265 9,777
------- ------------------------------ ---------------- -------------
4. Net increase / (decrease)
in cash and cash equivalents
for the period
Cash and cash equivalents
4.1 at beginning of period 1,748 1,224
Net cash from / (used
in) operating activities
4.2 (item 1.9 above) (1,120) (4,198)
Net cash from / (used
in) investing activities
4.3 (item 2.6 above) (97) (101)
Net cash from / (used
in) financing activities
4.4 (item 3.10 above) 6,265 9,777
Effect of movement
in exchange rates on
4.5 cash held (69) 25
---------------- -------------
Cash and cash equivalents
4.6 at end of period 6,727 6,727
------- ------------------------------ ---------------- -------------
5. Reconciliation of cash Current quarter Previous
and cash equivalents $A'000 quarter
at the end of the $A'000
quarter (as shown in
the consolidated statement
of cash flows) to the
related items in the
accounts
---- ---------------------------- ---------------- ---------
5.1 Bank balances 6,727 1,748
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) 6,727 1,748
---- ---------------------------- ---------------- ---------
6. Payments to directors of the entity Current quarter
and their associates $A'000
----------------
Aggregate amount of payments to
these parties included in item
6.1 1.2 174
----------------
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 Current quarter
the entity 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 Total facility Amount drawn
available amount at at quarter
Add notes as necessary quarter end end
for an understanding $A'000 $A'000
of the position
--------------- -------------
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 $A'000
for next quarter
---- --------------------------------- -------
9.1 Exploration and evaluation 867
9.2 Development
9.3 Production
9.4 Staff costs 293
Administration and corporate
9.5 costs 471
Other (Share related expenditure
9.6 as per AASB 132) 184
-------
9.7 Total estimated cash outflows 1,815
---- --------------------------------- -------
10. Changes in Tenement Nature of interest Interest Interest
tenements reference at beginning at end
(items 2.1(b) and location of quarter of quarter
and 2.2(b)
above)
----- ---------------------- -------------- ------------------- -------------- ------------
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: .....19
July 2017.....
(Director/Company secretary)
Print name: ...... Solomon Rowland................
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 company news service from the London Stock Exchange
END
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