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Brad they can't get the transmission lines done until they have the finance.

Everything is just 'we are going to get/do this' but we haven't actually got or done anything for quite some time that can be reported in an announcement. What that means is that the Company can only repeat that things are going to happen not that they have happened. So in that respect I agree with anyone who says its the same old because it is.

That doesn't mean for my part I don't think it won't happen, quite the contrary, but a spade is a spade when its a spade.

'Another same old same old interview.'

Exactly JTD. Groundhog day. Exactly why that is the case is easy though. Dewatering, dewatering, dewatering. It's slow, much slower than anticipated and when the CEO say's slow he really means slow. Nothings happened to say we have nailed specific success criteria, so for now until we confirm flow rates or a PPA (interim or full) or finance any infill interviews can only be repeats of the same message.

Who or what ultimately caused the delay though is down to individual interpretation. We went for six wells (four horizontal plus two vertical = two production pods) and I wonder whether in hindsight and on balance (cost of wells) more investment in more wells earlier would have given us greater economical value today. However, how do you quantify how many initial wells you will need when a) you are the pathfinder for dewatering a CBM project in Botswana, and b) you are attempting to deliver value for money by not over committing on paying for wells that were not needed at the time. Very difficult call to make as our present situation with dewatering would suggest.

Some permeability though, it seems awesome.

I didn't Mike, no. Not sure the timing is right to get answers from the Company on those questions.

Points that would help me now:

1. How long will be given before a decision is made to move to further drilling?
2. We will I am sure have already looked at the process of introducing new wells to aid the dewatering, so are we looking at one/two or more additional wells. Or a stepped approach dependant upon the impact of each well?
3. From a technical point of view how easy is it to introduce new wells into what is already a complex operation managing pressure levels over the six existing wells.?
4. It was mentioned in the November RNS that dewatering is measured in revs per minute (rpm) and that the dewatering objective would start to be achieved when we hit 100rpm's. We started at 300rpm's and by November we were generally in the range between 100- 200 rpm's. Where are we now?
5. Is the Company still 'very confident' that sustained commercial gas flows will be attained from the Lesedi pods? Or have we indeed move back from this position in light of the length of time taken to progress dewatering?
6. The coal is signalling excellent permeability. Is this permeability the reason we have taken so long to dewater sufficiently or is there reason to believe that we may be connected to a strong acquifer?

I also think I very much missed the wood for the trees leading up to this. Subtle difference it may seem but I was a step ahead in focusing on the gas flow and not the dewatering. One leads to the other. TG, GG & CC all got away with talking about the gas and were allowed a free run and not pressed on the dewatering speed or the likely need for more wells. I had the trigger for that from the 20th Jan announcement, 'The Lesedi 3 and 4 pods are producing water in isolation which makes dewatering a slower and more difficult exercise than would otherwise be the case in a full field development. In a field development scenario, an array of wells would be located adjacent to each other which would serve to facilitate dewatering.'

It's been good to see the posting here has been focused upon what has been released this morning. Been a pleasure in that way reading the board today. Cheers everyone and I hope we give birth to that unexpected baby as Brad quite rightly pointed out does happen.

Given the companies strive to retain shareholder value this makes me wonder at what point do you carry out a dilutive fund raise? Before this news or after? There is still indecision in whether the present wells will do the job. So back to Point 1. above for me.

My very quick obs without touching on financing/PPA (being dragged out the house):

While the announcement is the interim results for the six months ended 31 December 2019 it incorporates some events into 2020 (gas flowa/PPA).

'Our current wells are yielding encouraging results'
'Lesedi 3P and 4P wells can flow gas at sustained rates for extended periods of time'
'However, dewatering is taking longer than originally anticipated, which is a precursor to achieving higher gas flow rates.'
Pretty clear sustained rates are there but not at commercial level yet.

'Removing sufficient water from the LMC via just two production pods in such a large area is taking considerable time.'
The problem with being first mover. Subsequent companies will undoubtedly not be dewatering with two pods. It has been known that they were working a large area but clearly thought that two production pods would be sufficient. Knowing TG that decision was most likely made from a monetary as well as a geological perspective. While they have not said they will drill more wells yet it is very likely in my opinion they will need to. The initial decision, made with the right intentions for shareholders, has a clear likelihood of being the wrong decision in hindsight.

'Coal permeability is good based on the observed water flows which ultimately augers well for sustained higher gas flow rates.'
They are on target to get commercial rates but not expected in the near term.

'Following the long silence on commencement of negotiations for the "Development of a Maximum of 100 MW of Coal Bed Methane (CBM) Fueled Pilot Power Plants in Botswana", the Government of Botswana through the office of the Permanent Secretary, Ministry of Mineral Resources, Green Technology and Energy Security (MMGE) has recently reaffirmed Government's commitment towards facilitating development of CBM in the country and seeing through the successful negotiation of a PPA with Tlou.'
Encapsulates fully a government that is completely ineffective both in its own budgetary management and in an environmental capacity. No forward planning or organisation has been evident (hence the time taken to nearly get an appropriate negotiator onboard).

The billion dollar play next door is not the meat in the sandwich ...we are according to the CEO based upon the 3D seismic campaign. Should see a significant upturn here if, as suggested, the finance is to be concluded.

Stebol you need to stick around. PMSL.

I wouldn't bet against you on the issue of the main PPA Whizzer that's for sure.

This does confirm what we were previously told regarding an interim PPA and also further informs us that the government, while slow and inept, are firmly supporting the concept of CBM - gas to power.

The lack of any reported problems, the actual reporting of good progress, the lack of drill movement, the move to an interim PPA etc does show that in all probability the odds are stacked towards commercial gas flows. Looking forward to them making that announcement.

'If your referring to Suhail Ym I for one found it in general to be informative and most relevant most of the time.'

Baserite I'm genuinely pleased for you as you have been here for quite some time and I remember you flagging up your buys in the 50's which you don't normally do. So well done.

Regarding the poster you mention and the 'informative' and 'relevant' contribution that was made did anything change in any shape or form whatsoever in the position of the company from entry to exit?

"Could well have a Boil type rise here'

And the title of your post on BOIL: ' 78% drop since last Friday'

Mmmm, missed out that bit!

From the BOIL BB:

'Anyone who mentioned a placing, were shot down and literally abused. Eyeguy - Suhail......and the rest. Sledging anyone with a negative viewpoint. ..and now where are they??
Take note - and learn.'

It doesn't seem like you have abided your own advice Neon. You've followed them here!

No arguing over the length of time from drill to now re gas flows. Never anticipated it being so long.

Regarding 'hiding the truth' that's only if you choose to believe that there is something to hide. The truth, if you believe the company's announcements/interviews, is that dewatering is still continuing. There have been no reported problems and commercial gas flow is expected.

People are leaping on 'time taken' as 'something to hide' which really goes back to 'its not happening in the timescale I want'. Joining dots together that are just not there.

Reality is sometimes dead simple, it will cost us plenty if they mess up the complex operation of dewatering.

Time enough.

The answer is in there somewhere I suspect.

I answered one of my own questions with the prospectus, 'Would EssarM/Shoreline be able to control who took over our interest in OPL226 if we didn't secure financing?' Clearly Shoreline can as they have first refusal on that interest.

Secondly the very last paragraph was interesting in that although the money was due to run out in July 2019 (for the purposes of the 2019 placing) the CEO clearly envisaged the possibility of the company running on beyond that date, '...any appointment of a monitor, if required, would not occur until July 2019 at the earliest (and potentially a number of months following this date, if the Company is able to reduce costs and therefore preserve its existing cash resources for a longer period of time).'

Cont'd:

'If the above future equity fundraisings, other financings or a possible corporate solution were unsuccessful, the Company would look to restructure its affairs under the supervision of a court appointed monitor and court ordered protection against creditors similar to an administration process in the United Kingdom, under which the Company would obtain a Court order giving it protection from its creditors for an amount of time (usually 30 days) in order to arrange its affairs. The timing of this action would depend on the Company’s view as to the point in time at which it was unable to pay its debts as they became due, but assuming that the Company reduces its general and administrative expenses to preserve its existing cash resources, the Company anticipates that any appointment of a monitor, if required, would not occur until July 2019 at the earliest (and potentially a number of months following this date, if the Company is able to reduce costs and therefore preserve its existing cash resources for a longer period of time).'

The 2019 prospectus tells us:

'However, in the event that such equity fundraising or other financing is not achieved (or are only achievable on terms which are not acceptable to the Company), the Group will also consider obtaining additional capital through either, debt financing, quasi-equity fund raising, an equity fundraising in the private markets of ShoreCan equity (assuming consent for the same is obtained from the Company’s joint venture partner in ShoreCan), the disposition of assets or a combination of the above. The timing of such potential ShoreCan equity fundraising would depend on the amount raised in any future equity fundraisings carried out by the Company, but the Company would seek to ensure that any such ShoreCan equity fundraising is completed prior to the time at which its working capital (taking into account the net proceeds of the Placing and any amount raised in any future equity fundraisings or other financing obtained by the Company) is depleted.

The Directors are confident that the Group would be able to achieve a disposition of its interest in ShoreCan, since the Shareholders’ Agreement relating to ShoreCan contains a right of first refusal enabling Shoreline to purchase the Group’s interest in the joint venture, and, in the event that Shoreline did not wish to purchase the Group’s interest, the Group would be free to sell such interest to a third party. The Directors believe that the Company’s interest in ShoreCan would be of interest to a number of potential buyers. The Directors are also confident that it would be possible to effect an equity fundraising of ShoreCan equity in the private markets on the basis that ShoreCan’s interests are highly prospective and may be of interest to a number of private investors.
However, in the event that it is not possible to use any such relevant means detailed above to obtain the required additional capital, then the Directors (notwithstanding any cost reductions that may have been or will be effected) do not believe that it will be possible for the Company to continue its operations independently. In such circumstances, the Directors would look to a corporate solution in the event that future equity fundraisings and dispositions of assets did not succeed. The Directors believe that the value of the Group’s assets would be best preserved in a corporate transaction. The Directors are confident that such a corporate solution would be achievable, as the Directors have a vast range of experience in acting as directors of public companies, and have been through similar processes in the past. Any such process would occur in the business and market context of the time it took place. However, as at the date of this Prospectus, the Directors have not actively considered such a corporate solution in relation to the Company as they do not believe that it is necessary at this stage.'

cont'd:

$300k not £300K bonum for what it's worth.

Common sense tells us the company is indeed broke based upon forecast cash spend and no regulatory update to the contrary.

Liquidation? Doubtful that will happen as that would put uncertainty onto the other players in this project namely Shoreline and Essar Mauritius......who would buy the liquidated assets? Could they control that? I suspect they may well want stability especially with only circa 7 months of the re-extended PSC left or maybe not if the sums are right and they have reason to believe a further extension would be forthcoming. COPL are certainly in the weakest position financially of the three by an extremely long margin. But they are sitting on a high percentage share of OPL226 and relinquishing some of that may change things and that is my expectation here.

Still not sure if the Essar M dispute has been resolved or indeed if that dispute was wholly responsible for the delays we have encountered. The difficulty with having an ongoing commercial dispute is that it impacts the companies/JV's ability to move forward with financing the project. I still do not know where we are with Essar M.

We can all pontificate as much as we like including me above, but the position, due not to opaque communication from the company but to no communication, is very, very unclear to investors. I can have no true belief, only an expectation, it will go one way rather than the other in those circumstances. The sooner we hear from the CEO the better for everyone.

'Anybody thick enough to follow your ‘advice’ would have missed out on a 50% rise, at least.'

Only if that person had not invested over the last three years, they got in recently and they are not intending to keep the investment beyond the next trading day as this could very much go either way. Short term traders have had a good opportunity certainly. Othe than that Oilberta's underlying message is right, due diligence will give a balanced risk/reward ratio here.

They may have to sell their asset but I suspect the real play here is a disposal of part of their asset. We are sat with 40% this project and realistically that is not going to be maintained whichever route this goes.

LB I'm not sure on the 0.1p bit, my understanding previously was that the shares are of 'no par value' (see first page of prospectus' I think) and as such there is no limit on the price of a placing. Been a while since I looked at that point but will look again.

Jiving very good research again. I'll leave it to the squabblers to drown out which way this is going. For me I still don't know enough, it could go either way although my expectations are leaning one way rather than the other. I won't be bothering wading through the nonsense that will undoubtedly follow your research and will await confirmation of the position through the regulatory channels.

Cheers