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(TLOU) TLOU Energy Share Chat

Discussion in 'General Share Chat (TLOU)' started by jackjack, Mar 27, 2017.

  1. jackjack

    jackjack Administrator Staff Member

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    Thread created
     
  2. Inspiration

    Inspiration Moderator Moderator

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    Tlou Energy is an AIM and ASX listed company focused on delivering power in Botswana and the broader southern African region through the development of coal bed methane (‘CBM’) projects.

    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 the expensive diesel and import market.

    Tlou’s first planned gas-to-power solution is expected to be delivered through a 10MW pilot project. Following successful implementation of the 10MW pilot project the Company plans to upscale the plant in order to provide further power to Botswana and the southern African region.

    The Company is led by an experienced Board, management and advisory team including individuals with successful track records in the Australian CBM industry.
     
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  3. Barney

    Barney Demi God of BlueShare

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    Amazed a thread didn't already exist. Let those elephants fly!
     
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  4. Cacher

    Cacher A Legendary Member

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    Very excited about this one.
    Held this for quite a while, but always fancied they'd be raising - given the last couple of quarterly figures, so held off building a larger position. Took some more just after the placing and very happy to sit on these. The potential here is immense, and being located and supported by the Botswanan Government is a huge positive factor.
    GLA
     
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  5. Inspiration

    Inspiration Moderator Moderator

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    jackjack likes this.
  6. Cacher

    Cacher A Legendary Member

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  7. Groucho

    Groucho Member

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  8. Groucho

    Groucho Member

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    27 July 2018


    Tlou Energy Limited


    ("Tlou" or "the Company")


    Government Releases Re-tender of 100MW RFP


    Key Points:

    · Tlou is one of two companies to be invited to re-tender for the development of a maximum of 100MW CBM Fuelled Pilot Power Plants in Botswana;

    · A compulsory pre-tender meeting with the Botswana Government will take place on 9 August 2018;

    · The closing date for receipt of tender offers is 12 September 2018.


    Retender of 100MW RFP

    Earlier this year the Company received confirmation that Botswana's Ministry of Mineral Resources Green Technology and Energy Security ('the Ministry') has requested that the Request for Proposal (RFP) for Development of up to 100MW of CBM fuelled power plants in Botswana be re-tendered, with both Tlou and the other shortlisted party to be invited to submit a bid under a new re-tender process.

    The initial RFP was issued in early 2017 and Tlou submitted a detailed response to the Ministry in September 2017. Tlou'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.

    Being the most advanced CBM project in Botswana, with gas reserves in place, having environmental approval for upstream development and a mining licence secured allowing the Company to commence development operations, the Company is very pleased to receive the re-tender document and will now undertake a compressive review of the terms therein.

    Tlou is one of two companies to be invited to re-tender for the development of a maximum of 100MW of CBM fuelled Pilot Power Plants in Botswana as an Independent Power Producer (IPP). The other company being invited to re-tender is a local Botswana company Sekaname (PTY) Ltd.

    Pleasingly for Tlou, a compulsory pre-tender meeting with representatives of the Procuring Department will take place at the Botswana Ministry of Mineral Resources, Green Technology & Energy Security on 9th August 2018.

    The closing date for receipt of tender offers in 12th September 2018.


    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 expensive 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, holds a Mining Licence and nine Prospecting Licences, covering an area of ~8,300Km2 in total, 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 of ~261 billion cubic feet (3P).

    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.
     
  9. Groucho

    Groucho Member

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    25 July 2018


    Tlou Energy Limited


    ("Tlou" or "the Company")


    OPERATIONAL REPORT - QUARTER ENDING 30 JUNE 2018


    Tlou Energy Limited, the ASX, AIM and BSE 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 and Mamba CBM Projects in Botswana for the quarter ended 30 June 2018.


    Highlights

    · Core drilling rig wholly owned by Tlou onsite with operations aimed at upgrading sub-surface data in the project areas

    · Successful capital raising completed raising approximately AUD$8m

    · Preparations for drilling of new pilot production wells close to the proposed central processing facility are under way


    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 in Botswana covers an area of approximately 3,800 km2 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 Selemo pilot project where the Company commenced gas production in 2016.

    upload_2018-7-28_17-55-6.png


    Mamba Project Area, Botswana

    Licences: Prospecting Licences237-241/2014

    Ownership: Tlou Energy Limited 100%

    The Mamba project consists of five Coal and CBM PL's in Botswana covering an area of approximately 4,500 km2. 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.

    upload_2018-7-28_17-53-8.png


    Core-hole drilling and rig purchase

    In early 2018 Tlou purchased a core drilling rig which arrived on site this month. The rig has low hours and will be ideal for obtaining coal and gas data in regions of sparse geological information, noting that the Company holds 100% of licences covering over 8,000 Km2.


    Once commissioned the rig will be prepared for a core well drilling campaign in advance of proposed pilot well drilling. In addition, Tlou already has its own desorption testing facilities onsite which allows the Company to test core-hole samples without the requirement to mobilise third party personnel. Owning the core rig and gas testing equipment is expected to greatly reduce the cost of Tlou's core-hole drilling and core sample analysis.


    Core-hole information assists with the addition of gas reserves and resources and it is to this end that the Company intends to use the rig to obtain additional subsurface information. This also brings field operations more under the direct control of the Company in terms of timing of coring programs, maintenance, and health and safety. It also leads to additional direct employment of local staff by Tlou.




    Key benefits of drilling further core-holes include:

    · Confirming coal quality, thickness, and gas content in previously un-drilled areas of the Lesedi and Mamba projects;

    · Acquiring new information to expand the Company's gas reserves and contingent resources;

    · Providing additional data that can be used to determine optimum locations for project development as well as high-grading areas for further development in both the Lesedi and Mamba project areas.




    CBM Tender

    Earlier this year the Company received confirmation that Botswana's Ministry of Mineral Resources Green Technology and Energy Security ('the Ministry') has requested that the Request for Proposal (RFP) for Development of up to 100MW of CBM fuelled power plants in Botswana be re-tendered, with both Tlou and the other shortlisted party to be invited to submit a bid under a new re-tender process.


    The initial RFP was issued in early 2017 and Tlou submitted a detailed response to the Ministry in September 2017. Tlou'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.


    Being one of the most advanced CBM projects in Botswana, with gas reserves in place, having environmental approval for upstream development and a mining licence secured allowing the Company to commence development operations, the Company is very eager to receive the re-tender document and review the terms therein.


    Earlier this month, members of the Tlou board met with the Minister of Mineral Resources Green Technology and Energy Security, the Honourable Minister Molale, in Gaborone, Botswana. The Honourable Minister was very knowledgeable on Tlou's project and appreciated the huge investment Tlou had made in Botswana to date, the potential positive impact the project can bring to the country and that it made perfect sense for the project to succeed as Botswana needs the power and Tlou has the gas. The Minister expressed his concern that the tender had not progressed further already especially as the project had been approved by cabinet some time ago. The meeting also highlighted the other advantages the project can bring including energy security and vital long term sustainable direct and indirect local employment opportunities.


    Tlou is also considering whether it should become a member of the Southern African Power Pool ("SAPP") as an Independent Power Producer ("IPP") and what the costs and benefits of membership would be. Currently Tlou is investigating whether it is practical to potentially become an IPP member of SAPP to either trade in the SAPP or to have some form of contract with an existing SAPP member for an offtake.



    Capital raised to progress activities


    In June and July 2018, the company completed a Non-Renounceable Entitlement Offer ("Entitlement Offer") whereby existing eligible shareholders were invited to subscribe for 1 Offer Share for every 6 ordinary shares held at a price of A$0.10 (£0.0575) per Offer Share. In addition, the Company successfully placed shares with institutional investors in the UKand Australia. Following the Entitlement Offer and placements a total of approximately AUD $8m was raised.



    The net proceeds of the placements and the Entitlement Offer, along with existing cash, will mainly be applied by Tlou towards drilling of production pods, core-hole drilling regulatory approvals and working capital.



    The Company intends to commence production pod drilling in the Q3 2018 with dewatering to be completed prior to planned production testing, installation and commissioning of power generation facilities. The proposed production pods, referred to as Dual Lateral Pods, consist of two lateral or horizontal wells that intersect a vertical well. Up to three pods are anticipated subject to funds and operational parameters. The pods will be drilled in areas identified as being potentially highly suited for initial project development, where quality seismic and core-hole data exists. In addition, the reserve certifiers have indicated that drilling of production pods in a slightly different orientation to existing wells has the potential to enhance gas production rates. The work program, if successful, could de-risk the project even further and add to the Company's independently certified gas reserves at the Lesedi CBM project.



    A proportion of the capital raised is also planned to be used towards further core-hole drilling operations, using the core-drilling rig recently purchased by the Company. Additional core-hole data can upgrade the existing data control over the project and could assist with reserves and contingent resources expansion.



    Progressing environmental and licencing requirements for project development is also planned. This includes the Environmental Impact Assessment for the downstream component (transmission lines, gas and potential solar generation) of the project. The Company has already secured approval for upstream development (i.e. field operations including drilling of production wells and further exploration wells).


    The Company will also continue negotiations to secure offtake or power purchase agreements with interested parties and in the coming weeks plans to apply for a Generation licence in Botswana, which is required to generate and sell power in the country.



    Funds will also be used to cover working capital requirements including general and administrative costs across the Company's three stock exchange listings on ASX, AIM and BSE.


    With this funding in place, Tlou is currently working with its geological and drilling consultants on optimising the production well design which it hopes will lead to the wells delivering enhanced flow rates. Long lead items have now been ordered with drilling of the first of the production wells scheduled to begin during Q3 2018.



    The Company's priorities remain to:

    · secure a clear pathway towards a gas to power pilot project Power Purchase Agreement in Botswana;

    · Connect to the Power grid in Botswana which facilitates access to the Southern African Power Pool;

    · Further de-risk the Lesedi project by the drilling of additional dual lateral pods in the Company's mining licence area to prove up additional gas reserves and enhance commercial gas flow rates;

    · Expand the Company's reserves and contingent resources footprint through further core-hole drilling, core-sample analysis, and seismic surveys subject to funding.



    In addition, the company will continue to progress other options including:

    · Offtake opportunities outside Botswana to service the enormous regional power demand;

    · Investigating possibilities for the Company to expand into other countries.


    ****


    Anthony Gilby

    Managing Director

    Tlou Energy Limited

    Website: www.tlouenergy.com
     
    Last edited: Jul 28, 2018
  10. Groucho

    Groucho Member

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  11. Groucho

    Groucho Member

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  13. Groucho

    Groucho Member

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    31 July 2018


    Tlou Energy Limited


    ("Tlou" or "the Company")


    Southern African Power Market Study


    Tlou Energy Limited, the AIM, ASX and BSE listed company focused on delivering power in Botswana and Southern Africa through the development of coal bed methane ("CBM") projects, has released a presentation on the Southern African Power Market, prepared by Tlou in association with the Mott MacDonald Group.


    Tlou's Executive Director Mr Gabaake will make a presentation at the 3rd Annual SADC Industrialisation Week being held in Namibia this week.


    A copy of the presentation is available on the Company's website http://tlouenergy.com/presentations.
     
  14. Groucho

    Groucho Member

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    13 August 2018


    Tlou Energy Limited


    ("Tlou" or "the Company")


    Operations Update and RFP bidders meeting


    Tlou Energy Limited is pleased to provide an update on preparations for the upcoming pilot production well program and the pre-tender bidders meetings in relation to the Government of Botswana's Request for Proposal ('RFP') for the development of up to 100MW of Coal Bed Methane ('CBM') power plants in Botswana.


    Key Points:

    · Equipment arriving onsite ahead of drilling of lateral and vertical pilot production wells;

    · Spudding of first well expected to occur in September once critical long lead items are onsite;

    · Pre-tender bidders meeting was positive and Tlou is now working towards submitting its proposal.


    Pilot production program

    The Company is scheduled to commence a pilot well drilling program this quarter. The proposed pilot wells, referred to as 'dual lateral pods', consist of two lateral or horizontal wells that intersect a vertical well, with up to three pods anticipated to be drilled under the program.


    The pods will be drilled in areas identified as being potentially highly suited for initial project development, where quality seismic and core-hole data exists. In addition, Tlou's reserve certifiers have indicated that drilling of production pods in a different orientation to existing wells has the potential to enhance gas production rates. A key objective of the program is to achieve enhanced gas flow rates in the area proposed for initial project development. In addition, and if successful, the work program could further de-risk the project and add to the Company's independently certified gas reserves at the Lesedi CBM project.


    Long lead items have been ordered and are due onsite in the near term. Tlou has also purchased additional equipment for the program to bring the operations more under the Company's control. This will drive future operational efficiencies and cost savings. Tlou has steadily built up the operational equipment it owns. These assets, along with Tlou's experienced operations team, reduce the Company's reliance on mobilising expensive third-party equipment and personnel for drilling operations. This can also increase local experience and create further employment opportunities. The development of the CBM industry and creation of sustainable jobs within Botswana is a key focus for the Company.


    Spudding (commencement) of the first well under the planned drilling program is expected in September. Following drilling of the pods, wells will proceed to dewatering and, subject to successful dewatering, gas production. Due to the current workload in the field, planned core-hole drilling is now more likely to begin following completion of the pilot production pods.


    Pre-tender bidders' meeting

    Botswana's Ministry of Mineral Resources Green Technology and Energy Security ('the Ministry') has issued a Request for Proposal ('RFP') for development of up to 100MW of CBM fuelled power plants in Botswana, as announced on 27 July 2018.


    As part of this RFP, a compulsory pre-tender meeting with representatives of the Procuring Department has taken place at the Ministry's office. Tlou's management believes that the meeting was positive and there appears to be continued government goodwill to advance the project. Tlou requested clarification of some terms in the RFP documents and were pleased with the responses received. While the Company will submit a comprehensive bid, the RFP is a very detailed and regulated process so there is no guarantee of success. The Company will continue to push other objectives including negotiating directly with potential off-takers and becoming a member of the Southern African Power Pool.

    The closing date for submission of a response to the RFP is 12 September 2018. Tlou's submission will outline an initial project of up to 10MW of generation including project feasibility, proposed field development, installation of power generation facilities and supply of power into the grid. If successful in the RFP and following implementation of the initial project, the Company would look at expansion.

    Tlou's Lesedi CBM project is well advanced, with significant CBM gas reserves in place, environmental approval for upstream development, and a Mining Licence which allows the Company to commence development operations. Management considers that Tlou is therefore ideally placed to deliver a project under the RFP process should the application be successful.
     
  15. Groucho

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  17. Groucho

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    28 August 2018


    Tlou Energy Limited


    ("Tlou" or "the Company")


    Africa Oil Gas & Energy Australia Conference Presentation


    Tlou Energy Limited, the AIM, ASX and BSE listed company focused on delivering power inBotswanaandSouthern Africathrough the development of coal bed methane ("CBM") projects, has released a presentation given today by Tlou's General Manager Solomon Rowland,at the Africa Oil Gas & Energy Australia Conference being held in inPerth, Western Australia.


    A copy of the presentation is available on the Company's websitehttp://tlouenergy.com/presentations.
     
  18. Groucho

    Groucho Member

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    30 August 2018


    Tlou Energy Limited


    ("Tlou" or "the Company")


    Final Results

    Tlou Energy Limited, the AIM, ASX and BSE listed company focused on delivering power in Botswana and Southern Africa through the development of coal bed methane ("CBM") projects, is pleased to announce its results for the year ended 30 June 2018. The Annual Report and Consolidated Financial Statements are available on the Company's website http://tlouenergy.com/reports.


    Highlights

    · Significant upgrade of Independently Certified Gas Reserves across the Lesedi and Mamba areas

    · Seismic survey and core-hole operations successfully completed

    · Company listed on the Botswana Stock Exchange

    · Mining Licence granted over approximately 900Km2


    Tlou Managing Director Tony Gilby said, "This has been a very productive year for the Company, with key targets achieved that have further de-risked the project, including a significant increase in certified gas reserves. We look forward to building on our success to date to deliver a project that can bring vital energy security and employment to Botswana and has the potential to provide an excellent return for our supportive shareholders."


    https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/TLOU/13772239.html

    Chairman's letter


    Dear Shareholders,


    We have made excellent progress towards establishing ourselves as a key power player in Botswana, culminating in being awarded our Mining Licence in August 2017 over a licence area of approximately 900Km2. This was a key target as we work towards our goal of reducing the regional power deficit in Southern Africa through the development of our gas-to-power project via Coal Bed Methane ('CBM').


    We are privileged to have the support of the forward-thinking Government of Botswana, which announced in 2016 that CBM, a relatively clean source of energy and more competitively priced than solar and diesel, is to be included as part of the country's forward plan to combat power deficiency. In September 2017, the Company submitted a proposal for up to 100MW of CBM power in response to the Request for Proposal ('RFP') issued by the Ministry of Mineral Resources, Green Technology and Energy Security in January 2017. Despite the submission being extensive, the Ministry of Mineral Resources, Green Technology and Energy Security did not approve the submission on the basis that it did not satisfy some requirements. The Ministry of Mineral Resources, Green Technology and Energy Security has since reissued an amended RFP for up to 100MW. The Company has met with Government officials to discuss the requirements of the reissued RFP and is confident that Tlou's resubmission due in September 2018 will be comprehensive. As 100% owners of the most advanced CBM project in Botswana we believe we are in an excellent position to deliver the project outlined in our response to the RFP.


    During the last 12 months, Tlou has completed a work program including a 2D seismic survey and core drilling. The seismic survey acquired data over approximately 250km of the Company's Lesedi and Mamba project areas providing excellent quality data that has been integrated with the existing resource models. To further verify the seismic data, Tlou completed a 3-core hole drilling program in January 2018, including the first core hole drilled in the Mamba project area. The work program has provided important data that will be used to optimise future development activities and resulted in an increase in gas reserves.


    Further field development is being planned for later in 2018 and into 2019. The Company has purchased a core drilling rig to undertake an expanded core drilling program to further expand gas reserves. The purchase of the core rig will reduce the cost of future core drilling programs and provide increased control over the operations. The Company is also planning to drill new pilot production wells close to the proposed central processing facility.


    Tlou's Lesedi project has Botswana's first independently-certified CBM reserves. The results of the recent work program have significantly increased the gas reserves, upgrading 2P (Proved and Probable) gas reserves by 944% to 40.8 billion cubic feet ('BCF') and 3P (Proved, Probable and Possible) gas reserves by 63% to 426.6 BCF. We believe there is significant further upside to these figures which will come to fruition through further de-risking of both the Lesedi and Mamba project areas.


    During the year, we were delighted to complete a listing on the Botswana Stock Exchange as part of the Company's strategy to access local investors focused upon the development of Botswana based projects. As part of this listing we secured African Alliance Botswana Limited, a leading asset manager in Botswana, as a cornerstone investor raising P33 million (approximately £2.4 million or A$4.1 million). We were also delighted to complete an equity entitlement offer and placings to raise ~A$8 million which was well supported by new investors and existing shareholders. This cash will enable us to undertake additional field development work.


    This has been a highly active year for Tlou. With the Lesedi Mining Licence now in hand which is an important prerequisite to developing the first commercial gas-to-power project in the Botswana, we have a range of milestones ahead that are set to be pivotal in shaping our future and we believe we are very well placed to achieve our objectives. I would like to take this opportunity to thank the Tlou Board, Management Team, Advisers and most importantly our shareholders for their continued support during this exciting time for Tlou.



    Yours faithfully,



    Martin McIver

    Chairman




    Managing Director's Report


    Dear Shareholders,


    The Company made significant advancements over the previous twelve months however, this was unfortunately not reflected in the share price at year end. Nonetheless, we are now in a much stronger position to advance our gas-to-power project in Botswana in the near term.


    Notable achievements over the previous period include producing the first on-site electrical power from Tlou's gas, being awarded the first Mining Licence for CBM gas in the country, having a Botswana entity as our largest shareholder, for the first time acquiring excellent quality seismic data to form the basis of future technical evaluation and the drilling of a number of wells including the first core-hole in our Mamba project area. A significant increase in independently certified gas reserves was also achieved on the back of the technical work undertaken during the year with the Company flowing gas from the Selemo pilot production pod for over 2 years.


    We unfortunately fell short on delivering a successful outcome for a gas-to-power tender which effectively negated our share price momentum. A positive to come out of the tender process was a much more detailed understanding of what we need to do to connect our project to the electricity grid and the economic parameters of doing so.


    As a result of the achievements of the previous twelve months, we are in a good position to make further significant advancements in the year ahead. Our cash position is strong, and we are therefore financially well placed to proceed with a series of value adding field operations, the most significant of which will be drilling a number of gas production well pods scheduled to begin in the third quarter of 2018. These pods have been positioned in the best technical location and orientation to potentially result in enhanced gas flows compared to what has already been achieved. The results of the recent seismic data coupled with an extensive geological review of our area by our independent geological consultants has determined the optimum positioning for the upcoming drilling campaign.


    Furthermore, we purchased our own coring rig and associated testing equipment so that future core-hole drilling campaigns are much more flexible and cost effective for us as we continue to evaluate our 100% owned circa 8,300Km2 of acreage over 10 individual permits.


    In terms of gaining access to the power grid to ultimately monetise our gas via electricity, we have continued to run parallel processes of going down the path of the re-issued gas to power tender (recognising its challenges) as well as going it alone by gaining all of the necessary approvals to independently connect to the grid in any event. The Company notes that the Southern African Power Pool region continues to suffer from inadequate investment in the electrical power infrastructure and sooner rather than later will again experience significant electrical energy shortages. The Tlou project offers cost effective and relatively clean energy for Botswana coupled with providing energy security and much needed jobs with successful implementation.


    We look forward to the next phase of growth and barring encountering any currently unforeseen circumstances, we are set for a promising year ahead.



    Yours faithfully,



    Anthony (Tony) Gilby

    Managing Director
     
  19. Groucho

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  20. Groucho

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    17 September 2018


    Tlou Energy Limited


    ("Tlou" or "the Company")


    Operations Update


    Tlou Energy Limited, the ASX, AIM and BSE listed company focused on developing gas-to-power projects in southern Africa using coal bed methane ("CBM") natural gas from its gas field in Botswana, is pleased to provide an update on field operations at its Lesedi CBM project.


    Key Points:

    · Pilot production well locations have been agreed, scouted and inspected;

    · Site preparation work has commenced for the first pilot production well;

    · The Company is currently waiting on the final pieces of equipment to arrive onsite prior to spudding the first well in October.


    Pilot well drilling program

    Tlou Energy Limited is set to commence drilling of pilot production wells at its gas field in Botswana. If successful, these wells will form part of the Company's initial gas-to-power project which will include installation of transmission lines and grid connection. Further details on the proposed initial project are outlined below.


    Preparations are currently underway with pre-mobilisation activities to ensure adequate site clearing and construction of well-site facilities, as well as ensuring a nearby core-hole that has been drilled is adequately plugged and abandoned prior to spudding of the first well. To maximise efficiencies, the vertical production wells and top-hole sections of lateral wells will initially be drilled, once the last of the long lead items for this stage of the program are onsite which is scheduled for early October. Up to three production pods (comprising three wells per pod) are currently planned.


    The pilot well drilling program is being conducted in accordance with health and safety requirements and are consistent with the Company's approved environmental impact statement. There are various stages to the program including:


    · Selection of well locations, site clearing and preparation;

    · Mobilisation of equipment and ordering of long lead items;

    · Engagement of relevant contractors (drilling supervisors, directional drilling staff, engineers);

    · Field camp preparation;

    · Drilling of top-hole (vertical) section of wells;

    · Lateral well directional drilling and intersection with production well;

    · Completion of wells including installation of well-head equipment;

    · Pressure testing, dewatering; and

    · Gas production, analysis and testing.


    The wells will be drilled as 'dual lateral pods', comprising of a single vertical production well, intersected by two lateral wells. The lateral wells will be drilled through the gassy coal seam with gas extracted from this coal produced through the vertical production well where it can be gathered and used for power generation.


    Initial gas-to-power project

    Tlou is planning a gas-to-power project whereby gas from the Company's Lesedi CBM project will be used for power generation, and this power sold into the power market within Botswanaand/or across the Southern African Power Pool (SAPP).


    An initial development of up to 10 MW is planned. This will start with the first 2 MW of power which can then be expanded thereafter as further drilling is conducted and additional gas becomes available. With significant gas reserves already in place, the Company can readily expand upon successful implementation of the initial project.


    The dual lateral pods will be located in the area where the initial gas-to power project will be situated, subject to success.


    The Lesedi CBM project will require connection to the local power grid. This connection is planned to be made at the town of Serowe, which is located approximately 100 Km from the Lesedi CBM project. A draft transmission line route has been determined with negotiations ongoing with the regional and local land boards and the environmental impact assessment approval process continuing.


    The Company plans to sell power to potential customers, either on the "spot market" or through Power Purchase Agreements (PPA) with one or more customers. Sale of power is planned to be through the Botswana power grid which facilitates the sale of power within Botswana and regionally via the SAPP. Other options available to the Company to sell gas include potential Compressed Natural Gas (CNG) or small scale Liquified Natural Gas (LNG) projects that have been proposed to the Company by third parties including the use of natural gas as feedstock for manufacturing.
     

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