LONDON (Alliance News) - Tlou Energy Ltd on Thursday said it will conduct gas production tests on two more wells at the Lesedi coal-bed methane project in Botswana following the test on the first well which started earlier this year.
Tlou said it will now include the Selemo 2 and Selemo 4 wells within its current gas production testing procedures in addition to the Selemo 1 well, which commenced flow testing in the first quarter of 2016.
The flow tests will, hopefully, demonstrate the company can achieve sustainable production of gas from the wells to allow a commercial operation to be launched. That would be significant as Botswana does not currently have any producing wells of a commercial scale, meaning it would not only be a breakthrough for the AIM-listed company but for the southern African country as well.
Tlou said more evidence is being gathered supporting the possible correlation between the three wells, and said water production is in line with expectations.
"The decision to expand the testing to include three wells rather than the initial one well was taken following the results observed while flowing gas from Selemo 1 only and the excellent communication being observed between all the Selemo wells," said Gabaake Gabaake, the acting managing director of Tlou who took the role back in January.
The company was originally planning on testing Selemo 1 and then to move onto testing the other two wells to ensure it did not damage the reservoirs, but said Thursday that data has now indicated it is possible to bring all three wells into production concurrently "without significant risk" of damage.
"Although still at an early stage, the data gathered to date is very promising and is some of the best we have seen since we commenced flow testing. As a result we remain excited and confident of delivering a sustained gas flow shortly," said the managing director.
Tlou is aiming to construct a gas-to-power pilot plant at Lesedi and is currently working through the regulatory process.
"I have had discussions with relevant government parties in relation to our application for a gas-to-power pilot project in Botswana. We are awaiting feedback and remain extremely confident of a positive response in the near term," said Gabaake Gabaake.
Tlou shares were trading down 0.3% to 3.74 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Tlou Energy (TLOU)