TIDMTLOU
RNS Number : 5897Z
Tlou Energy Ltd
20 May 2019
20 May 2019
Tlou Energy Limited
("Tlou" or "the Company")
Confirmation of Tender approval
Tlou Energy Limited can confirm that the Company has now
received written confirmation from the government of Botswana that
it has been chosen as a preferred bidder for the Development of a
"Maximum of 100 MW of Coal Bed Methane Fuelled Power Plants in
Botswana".
Highlights
-- Tlou Energy Limited has been selected as a preferred bidder for the CBM tender
-- The Company will now work with the government to finalise all the project agreements
-- An enormous step forward for the Company in the development of its Gas-to-Power project
Tlou's Managing Director, Mr Tony Gilby commented, "The approval
of the Company's tender represents great progress for Tlou. The
proposal that we submitted was very competitive and we welcome this
decision by the Government. We look forward to working together to
deliver a successful power project. The effort put in by our team
over recent years has been phenomenal and this result makes it all
worthwhile. The Company will now progress with additional work on
the ground to deliver a Gas-to-Power solution that can bring
significant benefits to the country and to our shareholders. I look
forward to updating the market as we continue to develop the
project."
Request for Proposal (RFP)
In October 2018 the Company submitted its comprehensive response
to the Request for proposal (RFP) for the Development of a Maximum
of 100 MW of Coal Bed Methane Fuelled Power Plants in Botswana.
The Company's submission outlined a staged development
commencing with up to 10MW of generation as well as outlining
project feasibility, proposed field development, installation of
power generation facilities and supply of power into the grid in
Botswana.
The RFP was assessed across three different criteria,
Compliance, Technical and Financial. Of the competing bidders,
Tlou's proposal received the highest pass mark for the compliance
and technical stage. The financial stage required the calculation
of a Levelised Cost of Energy (LCOE) for the project, with Tlou's
proposal having the most competitive LCOE. This was possible due to
Tlou's ability to operate efficiently using very experienced
personnel coupled with the geological knowledge gained over many
years of operating in Botswana. Upon successful completion of the
initial project, the Company would look to expand further.
An initial staged 10MW development was selected to facilitate
the success of the downstream project by requiring relatively
minimal up-front capex. This reduces risk and therefore limits the
downside for Tlou, its shareholders and the government.
Tlou used the electricity guide price provided by the government
in the Company's tender of approximately USD $0.12 per kWh. At this
price a 10MW project could generate gross revenue of approximately
USD $10 million per annum.
Tlou considers the first 10MW as a pilot power generation
project. Revenues from this project could facilitate rapid future
expansion, which could be enormous based on the Contingent Gas
Resources already in place at Tlou's project acreage.
The transmission line component of the downstream power
generation project represents the bulk of the capex required and
will be designed to transmit upwards of 20MW of electricity into
the grid.
Milestones
The RFP approval is another very significant milestone for the
company which include:
-- Establishing the first Independently Certified Gas Reserves
in the country with enough 2P Gas Reserves already in place to
complete the proposed 10MW power project;
-- Flowing gas from the Selemo Pilot for approximately 2 years;
-- Generating electricity from the Selemo Pilot gas for several months;
-- Being awarded the first Mining Licence for CBM gas in the country;
-- Obtaining upstream environmental approval for over 200
production wells, water handling, seismic, gas gathering pipelines
and a processing facility;
-- Successfully acquiring the first seismic program in the
country specifically targeting CBM gas;
-- Successfully completing two gas production pods (Lesedi 3 & 4) in early 2019;
-- Obtaining downstream environmental approval for 20MW of gas
fired power generation coupled with 20MW of solar plus a
transmission line to connect to the grid.
Additional Achievements
-- Drilled numerous wells since Tlou operations commenced;
-- Tlou holds approximately 9,000 Km(2) 100% owned licence area,
with enormous scope for Gas Reserve expansion;
-- The Company has built an experienced in-county operational workforce;
-- Landholder agreements are either in-place or being finalised;
-- Botswana based investors are now the largest shareholder
group in the Company aligning the country's interest with that of
the broader shareholder base.
Financing
The Company's cash balance was approximately AUD $6.5 million at
the end of March 2019. The Company has no debt. The Company is well
funded through to 2H 2020 and has sufficient funds to carry out
planned drilling and seismic activities, that have the potential to
further increase existing Gas Reserves.
Downstream funding primarily relates to transmission lines,
which will be designed to transmit in excess of 20MW of electricity
from the proposed power generation facility to the Serowe
sub-station. This has the potential to make future generation
expansion both rapid and low cost.
Tlou has already received indications of funding support from a
number of existing strategic investors as well as from Botswana
Development Corporation (BDC). The Company will look to source the
lowest cost of capital for the downstream development.
Upcoming work program/milestones:
-- Flow gas (post de-watering) from the recently completed production wells;
-- Conduct further operations across the Lesedi, Mamba and Boomslang project areas;
-- Finalise the funding package for the downstream development.
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
----------------------
FlowComms Limited (Investor Relations) +44 (0) 7891 677 441
----------------------
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 power.
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.
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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