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From Share Prophets:-


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

In Africa things always tend to take far longer than people expect, and even more so when it comes to anything in the natural resources sector. Interest in, and the share price of, Tlou Energy (TLOU) seems to have waned and I think that has largely been as a result of some having far too optimistic timescales with regards to the company’s coal bed methane project at Lesedi, in Botswana.

The share price has drifted back to 6.5p on the ask currently, and has been even lower than that recently, but for me nothing has really changed in terms of the investment case here and I would still view it as a speculative buy with the potential to be worth a lot more in the future than the current £25 million market cap if things go to plan for the company.

It already has reserves and contingent resources in place and the management behind the company have history in the field of CBMs, plus there is plenty of potential for further upgrades from gas still in the prospective resources category.

In terms of the gas that it has already proven up, it has 2P reserves of 40.8bcf, and whilst that might not sound particularly exciting when taken on its own, it also has 3P reserves of 426bcf across its licences, plus plenty of potential from 2C contingent resources of 214bcf, and 3C of more than 3tcf. On top of the that the prospective resources from its other three licences could be more than 8.5tcf, although it is very early days and those licences are still at the exploration stage. Those of you who have experience of the natural resources sector will know that it is all about getting it out of the ground and monitising the asset, and in the case of Tlou that doesn’t look far away, although development will be phased and it is likely to take some time to see real returns in terms of profit

I'd take broker notes / SP targets with a pinch of salt. Notes are useful for understanding a company, combined with an indicative SP, but just remember most are either the house broker or pitching for business, so highly unlikely to say a company is rubbish and set a low SP target.

re timescales, depends how they'll calculated the target prices - NAV, reserve / resource valuation, multiples of revenue, EBITDA, profit etc - so really hard to pin a date on it. I guess 12 months wouldn't be unrealistic, but like I said, depends on how they've calculated it.

BTW, if you're new to this, you've landed well with HUR.

Lse are recording event so video will be up in 24 hours. Leo going through the a selection of agm slides. Strong performance from him but no new news.

Might be wrong, but dont think they have every gone into huge detail on which condition the two companies tendering couldn’t meet. Seem to remember though that one condition was that the company had to be already producing and selling; obviously Tlou could not meet the second part. Always sounded to me that the BG had cut and pasted a generic tender without thinking it through. My guess is they have now removed the unobtainable conditions and, hopefully, expedited the process.

GG said 2 to 4 weeks for RFP. Tlou will then submit a tender, I’m assuming not too different from previous one. Hopefully it will then be an expedited process given all the delays. Once awarded a PPA has to then be agreed.

Nice find.

Mr T - Turkey romp sounds like something the RSPCA should be getting involved with....

Technically it’s because a placing is coming.

Welcome on board Tidd, going to be an interesting H2 for this one

Warrants were offered at a rate of 1 for each 2 shares taken in the placing.

I've read IH post, and agree its true but personally I think the only person to blame is the person pressing the buy button. DYOR and all that. One positive note is that given other dire BBs on LSE, at least this one has remained civilized. GLA.

pijoe1212 - I assume you've got a history with Tidd83, hence the posts but posting the following doesn't add much to your credibility.. sorry tidd83..understand when you are exchanging views with someone far more in tune with the facts. (and i do not mean savp ..i mean tlou) followed by really? the gov has much to do with what? We all agree the raise / dilution was really badly handled but the key issue here is the lack of tangible progress on commercialising the assets. As far as I'm concerned the BOD are now in the last chance saloon, but I await a podcast where RG / CC / GG et al explain the rationale of their actions.

JTD - Tidd doesn't work for TLOU, he's a PI like you and me, so he wouldn't have known this was coming. Although I understand the rationale for the placing, and appreciate the chance to participate in the entitlement offer, I'm surprised by the level of discount. Saying that, I'm a grown up and understand the risks involved in investing in an embryonic industry listed on AIM. Story unchanged here, Im just poorer. DYOR.

It should expedite the first development wells at the Lesedi project

You can participate in the entitlement offer

Guess it depends on your entry point and risk profile. I�ll be slicing around 16p, even though I think a market cap double that is achievable, mainly because I was in at 8p so I�ll derisk. Re target price, I�m waiting for the other wells in the programme to come on stream and the associated operating cash flow before I can call it. Tidd, great shout on the after hours buy.

Thanks Puddin, youre like a little ray of sunshine on an otherwise cloudy day

Sorry, that's $100 to $150m pa.

TG stated, on a podcast a while ago, that revenue generated from a 100 mw powerstation would be between $100 � $150m per annum.

Yes, I took part - mainly for the warrants - but no benefit of the 10% commission, paid the full 4.38p

Just picked up a couple of 250K as my first entry. Not expecting movement till H2 but nice time to pick up around the placing price.