(Alliance News) - Tlou Energy Ltd is focused on securing financing and a power purchase agreement, it said Wednesday, as progress continues in Botswana.
During the three months to September, Tlou's first quarter, the firm made "excellent" progress at the Lesedi gas project, achieving "sustained" gas production rates.
Tlou is "very encouraged" by production since start-up, and soon it will start to reduce pressure in the wells to boost production. This, it did note, is complex and can take time.
Tlou said talks about a power purchase agreement with the Botswanan government are ongoing, but it does not expect any deal until after the general election later in October.
"The company's forward plan, subject to financing and operational results, targets finalising a power purchase agreement and development financing as soon as possible, with first electricity sales potentially in late 2020. The company will commit to significant field operations once development, exploration and working capital funding has been secured," said Tlou.
"The company is progressing funding options for the development of the first 10 megawatts of power generation as well as funding for further exploration and working capital requirements. Significant progress has been made with Botswana Development Corp for financing of the full project."
"The total cost for the 1MW project is estimated at USD30 million including 66,000 volt transmission lines, a central processing facility, and ten megawatts of generation assets and additional production wells. The company expects to complete negotiations for the first phase of funding by the end of the year," Tlou continued.
Shares were 2.5% lower in London on Wednesday at a price of 4.54 pence each.
By George Collard; georgecollard@alliancenews.com
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Tlou Energy (TLOU)