Tlou Energy shuts in well at Lesedi project to save additional costs

(Alliance News) - Tlou Energy Ltd on Wednesday said it has shut in one of its wells at Lesedi to reduce production costs while work continues elsewhere on the project.

Tlou Energy is an Australia-based, Botswana focused energy solutions provider. Its flagship asset in Botswana is the Lesedi gas-to-power project, which consists of three prospecting licences and a production licence.

During the three months ended September 30, the company said that of its two production wells, Lesedi Four continues to produce gas, while Lesedi Three was shut.

The well can be brought back into production when required, and was paused to avoid further costs. Tlou Energy added that "sufficient data" exists from the well.

Meanwhile, work continued on the construction of a 100-kilometre transmission line from the Lesedi project area to a grid near Serowe.

The work is being conducted by Zismo Engineering Pty Ltd, and is expected to be finished by the middle of next year.

Tlou Energy said 16% of the line had been built at the end of September. Substations at either end of the line are yet to be constructed.

Electricity generated at the Lesedi 10 megawatt gas-fired power facility will eventually be sold under a power purchase agreement with Botswana Power Corporation, the national power utility in Botswana.

The company anticipates that power generated at the facility, once in full production, could provide an annual revenue of USD10.0 million.

In other news, exploration continues at the Mamba project, situated adjacent to Lesedi. The next stage of development is likely to be seismic surveying and core hole drilling.

Shares in Tlou Energy were untraded in London on Wednesday, but last closed at 1.32 pence.

By Holly Beveridge; hollybeveridge@alliancenews.com

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