Last checked at 29 Jul 2016 07:01
29 July 2016
Tlou Energy Limited
("Tlou" or "the Company")
OPERATIONAL REPORT - QUARTER ENDING 30 JUNE 2016
Highlights
Ø Production testing at the Lesedi Coal Bed Methane Project expanded successfully to include Selemo 2 and Selemo 4 wells, adding to positive testing at Selemo 1
Ø Sustained gas flow achieved at Selemo 4 with the well exceeding expectations and potentially acting as a key second gas producer alongside Selemo 1
Ø Approval granted by Botswana's Government for a 50MW CBM power project - five times larger than the 10MW project originally applied for
Ø Considerable interest from a number of larger third-parties to partner with Tlou for the proposed 50MW plant in addition to future projects. Positive discussions are on-going with these potential strategic partners
TLOU ENERGY LIMITED PROJECTS
Lesedi CBM Project Area, Botswana
PLs 001-003/2004 and PLs 35 & 37/2000
Tlou Energy Limited 100%
Operations
The Company is focused on delivering power in Botswana and Southern Africa through the development of coal bed methane ('CBM') projects. The Lesedi CBM Project ('Lesedi') is the most advanced CBM project in Botswana and the Selemo production wells are now in the advanced stage of testing for commercial gas production with rates expected to grow.
The current focus at Lesedi is the Selemo production wells, also referred to as pods, namely Selemo 1, 2 and 4. Each of these three pods consist of a vertical well and an intersecting horizontal well. Selemo 1 is the central pod with Selemo 2 and 4 drilled to the south and north of Selemo 1 to shield water from the central area around Selemo 1, assist with dewatering and ultimately, enhance gas deliverability. The aim of the gas testing program is to provide evidence of a sustainable gas production rate achievable from the field and to develop the first wells flowing commercial rates of gas in Botswana.
Production testing is centered on establishing a consistent gas flow from the production pilot pods. Long term testing on Selemo 1 commenced in the prior quarter with Selemo 2 and 4 wells initially maintaining static fluid levels. The Company proceeded to draw down all the Selemo wells including the Selemo 2 and 4 shielding wells in April 2016.
A sustained gas flow was reached at Selemo 1 prior to this quarter and an additional sustained gas flow was achieved at Selemo 4 as reported on 29 June 2016. Sustained gas flows are a significant milestone and a key step in the process of achieving an economic flow rate.
Gas flaring at Selemo 1 - Q2 2016 http://www.rns-pdf.londonstockexchange.com/rns/5683F_-2016-7-28.pdf
A workover was conducted at Selemo 1 at the end of the quarter to clear coal fines at the intersection of the vertical and lateral wells, which can cause reduced communication between the well pair.
Following the workover, pumping and metering equipment was installed on the lateral end of the Selemo 1 pilot pod. This facilitates production of gas from both the vertical producer and also the lateral end of the pod if necessary.
Gas rates are expected to grow as the coal seam continues to be dewatered and especially if gas is contributed from the lateral sections of the wells.
Along with providing evidence of gas production achievable from the field, the data being recorded will be incorporated into future field development plans and for independent reserve certification.
Downstream activities and partnership options
Post the end of the quarter, Tlou was delighted to receive confirmation from Botswana's Public Procurement and Asset Disposal Board ('PPADB') that it has been selected to develop a 50MW CBM power plant at the Company's 100% owned Lesedi CBM Project.
This project is five times larger than the 10MW power plant originally applied for, demonstrating the strength of the Government's support for the development of domestic sources of gas and power. This approval followed the decision by the Government of Botswana to incorporate 100MW of CBM power into its future generation supply plans from 2018.
The 50MW project approval creates a ready market as the first step to develop Tlou's independently certified contingent gas resources of ~3.3 trillion cubic feet (TCF) (3C).
The Company will now enter into further discussions with the relevant government department to agree the terms of an off-take agreement. This is another key parameter in the steps towards booking independently certified gas reserves.
There is considerable interest from a number of larger organizations to partner with Tlou to initially develop a gas-to-power pilot project in Botswana and thereafter expand to supply this power deficient region. The larger 50MW project is attractive to such organizations as it provides more options regarding project development as well as potential benefits from economies of scale.
The Company has had positive discussions with potential strategic partners in relation to co-operating on future gas-to-power projects. Based on these discussions Tlou is confident that a strategic relationship with one or more of these potential partners will be announced in the short term.
Mamba Project Area, Botswana
PLs 237-241/2014
Tlou Energy Limited 100%
The Mamba project consists of five CBM permits in Botswana covering an area of approximately 4,500 km2. The Mamba permits are considered to be highly prospective as they are situated adjacent to Tlou's Lesedi CBM Project and are on-trend with the encouraging results observed to date. No operations were conducted in the tenement during the quarter. In the event of a gas field development by Tlou, the Mamba area provides the Company with considerable flexibility and optionality.
New Ventures
While Tlou is focussed on the Lesedi CBM project, the Company will continue looking at potential areas of expansion should the possibility arise.
http://www.rns-pdf.londonstockexchange.com/rns/5683F_1-2016-7-28.pdf
* * *
Tlou- Key Statistics (as at 30 June 2016)
· ASX Code - TOU
· AIM Code - TLOU
· Shares on issue ~ 206 million
· Fully diluted ~ 208 million
· Cash balance ~ $1.2 million (AUD)
· Debt - Nil
· Primary Focus is the Lesedi CBM Project in Botswana
Gabaake Gabaake
Acting Managing Director
Tlou Energy Limited
Website: www.tlouenergy.com
For further information regarding this announcement please contact:
Gabaake Gabaake, Acting Managing Director Solomon Rowland, Company Secretary
Email: gabaake.gabaake@tlouenergy.com Email: solomon.rowland@tlouenergy.com
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10
Name of entity |
Tlou Energy Limited |
ABN |
| Quarter ended ("current quarter") |
79 136 739 967 |
| 30 June 2016 |
Consolidated statement of cash flows
Cash flows related to operating activities
| Current quarter $A'000 | Year to date (12 months) $A'000 | |
1.1 | Receipts from product sales and related debtors
|
|
|
1.2 | Payments for (a) exploration & evaluation (b) development (c) production (d) administration | (411)
(340) | (5,784)
(2,897) |
1.3 | Dividends received |
|
|
1.4 | Interest and other items of a similar nature received | 3 | 28 |
1.5 | Interest and other costs of finance paid |
|
|
1.6 | Income taxes paid |
|
|
1.7 | Other (VAT/GST Refunds) | 17 | 566 |
|
Net Operating Cash Flows | (730) | (8,087) |
|
Cash flows related to investing activities |
|
|
1.8 | Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets |
(1) |
(24) |
1.9 | Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets |
|
|
1.10 | Loans to other entities |
|
|
1.11 | Loans repaid by other entities |
|
|
1.12 | Other (provide details if material) |
|
|
|
Net investing cash flows | (1) | (24) |
1.13 | Total operating and investing cash flows (carried forward) | (731) | (8,111) |
1.13 | Total operating and investing cash flows (brought forward) | (731) | (8,111) |
|
Cash flows related to financing activities |
|
|
1.14 | Proceeds from issues of shares, options, etc. |
| 2,065 |
1.15 | Proceeds from sale of forfeited shares |
|
|
1.16 | Proceeds from borrowings |
|
|
1.17 | Repayment of borrowings |
|
|
1.18 | Dividends paid |
|
|
1.19 | Other (provide details if material) |
|
|
| Net financing cash flows | - | 2,065 |
|
Net increase (decrease) in cash held
|
(731) |
(6,046) |
1.20 | Cash at beginning of quarter/year to date | 1,942 | 7,198 |
1.21 | Exchange rate adjustments to item 1.20 | 13 | 73 |
1.22 | Cash at end of quarter | 1,224 | 1,224 |
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related entities
| Current quarter $A'000 | |
1.23 |
Aggregate amount of payments to the parties included in item 1.2 |
104 |
1.24 |
Aggregate amount of loans to the parties included in item 1.10 |
|
1.25 |
Explanation necessary for an understanding of the transactions | |
|
Fees, Rent
| |
Non-cash financing and investing activities
2.1 | Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows |
|
|
2.2 | Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest |
|
|
Financing facilities available
Add notes as necessary for an understanding of the position.
|
| Amount available $A'000 | Amount used $A'000 |
3.1 | Loan facilities
|
|
|
3.2 | Credit standby arrangements
|
|
|
Estimated cash outflows for next quarter
|
| $A'000 |
4.1 | Exploration and evaluation
| 363 |
4.2 | Development
|
|
4.3 | Production
|
|
4.4 | Administration
| 232 |
|
Total |
595 |
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. | Current quarter $A'000 | Previous quarter $A'000 | |
5.1 | Cash on hand and at bank | 1,224 | 1,642 |
5.2 | Deposits at call |
| 300 |
5.3 | Bank overdraft |
|
|
5.4 | Other (provide details) |
|
|
| Total: cash at end of quarter (item 1.22) | 1,224 | 1,942 |
Changes in interests in mining tenements
|
| Tenement reference | Nature of interest (note (2)) | Interest at beginning of quarter | Interest at end of quarter |
6.1 | Interests in mining tenements relinquished, reduced or lapsed
|
|
|
|
|
6.2 | Interests in mining tenements acquired or increased
|
|
|
|
|
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.
| Total number | Number quoted | Issue price per security (see note 3) (cents) | Amount paid up per security (see note 3) (cents) | |
7.1 | Preference +securities (description) |
|
|
|
|
7.2 | Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions |
|
|
|
|
7.3 | +Ordinary securities | 205,619,292 | 205,619,292 |
|
|
7.4 | Changes during quarter (a) Increases through issues
(b) Decreases through returns of capital, buy-backs
(c) Release of securities from escrow |
|
|
|
|
7.5 | +Convertible debt securities (description) |
|
|
|
|
7.6 | Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted |
|
|
|
|
7.7 | Options (description and conversion factor) |
1,500,000 500,000
|
| Exercise price $0.14 $0.14
| Expiry date 29/11/2017 13/01/2018
|
7.8 | Issued during quarter |
|
|
|
|
7.9 | Exercised during quarter |
|
|
|
|
7.10 | Expired during quarter | 10,575,000
|
| $0.625
| 30-April-2016
|
7.11 | Debentures (totals only) |
|
|
|
|
7.12 | Unsecured notes (totals only) |
|
|
|
|
Compliance statement
1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: ............................................................ Date: 29 July 2016....
(Director/Company secretary)
Print name: Solomon Rowland.......................
Notes
1 The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.
== == == == ==