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(Alliance News) - Tlou Energy Ltd reported a widened first-half loss on Tuesday, hit by higher employee benefits and depreciation expense as it faced various hurdles in its bid to achieve saleable electricity.
Shares in Tlou were down 18% at 2.71 pence in London in morning trading.
Tlou aims to generate power in Botswana, which will be supplied locally and regionally. It reported no revenue for the six months ended December 31 as it has yet to generate saleable electricity.
Pretax loss for the half-year period totalled USD1.6 million, widened from USD1.5 million loss a year ago. Depreciation expense rose 31% to USD311,775 from USD238,742, while employee benefits expense was 6.3% higher at USD624,243 versus USD587,147 the year before.
The company also made a smaller USD42,885 gain on foreign exchange compared to a USD82,659 gain previously.
Tlou is aiming to achieve commercial gas flow rates at its Lasedi project in Bostwana, but has yet to do so. Dewatering the wells at Lasedi is taking longer than had been expected, delaying higher gas flow. To achieve sustained higher gas rates, Tlou said, will take more time and possibly more wells.
The company is also seeking to obtain a power purchase agreement in Botswana, and is looking to obtain a generation licence as part of this process. However, the process has proven "slower than expected" with a "long silence" from the government of Botswana.
The Botswana Ministry of Mineral Resources Green Technology & Energy Security has, however, agreed to talks for a temporary power purchae agreement that would allow for a proof of concept approach while full power purchase agreement talks were ongoing.
Negotiation details are currently confidential, at the government's request, but Tlou is "confident" it will obtain the agreement.
Tlou is also in talks to raise enough project finance to connect Lasedi to the power grid and "has met with numerous potential financiers", as well as investors, most of which where located in Botswana.
By Anna Farley; annafarley@alliancenews.com
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