Last checked at 28 Apr 2016 07:00
28 April 2016
Tlou Energy Limited
("Tlou" or "the Company")
OPERATIONAL REPORT - QUARTER ENDING 31 MARCH 2016
Highlights
Ø Long term gas testing at the Lesedi Coal Bed Methane Project is progressing well
Ø Sustained gas flow achieved post quarter end
Ø Changes in well pressures suggest gas production rates will continue to increase
Ø Positive indications received on gas-to-power project approval
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.
During the quarter the Company commenced gas production testing from the Selemo pilot wells, located in the Lesedi project area. 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.
The testing process includes:
Testing stage | Status |
- reducing the water level in each of the three vertical production wells; - reaching the critical gas desorption point; - gas pressure building up in each well; - flowing and testing the gas production rates. | Achieved Achieved Achieved Continuing |
The wells being tested comprise the Selemo lateral production pod (Selemo 1), drilled in 2013, and two new lateral pods either side of it (Selemo 2 and 4) drilled in 2015. Dewatering operations commenced thereafter with all three pods reaching critical desorption pressure and steadily building wellhead pressure.
During this quarter, production testing centered on establishing a consistent gas flow from the production pilot. Long term testing on Selemo 1 commenced in February 2016, with Selemo 2 and 4 wells maintaining static fluid levels at the desorption point and shielding water from Selemo 1, the central well where initial gas has been flared.
Following shielding of Selemo 1 from water influx and gaining better understanding of the water producing capacity of the coal, the Company commenced drawdown on all wells, thereby expediting the process of achieving a sustained gas rate from the production pilot.
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.
Production data to date is encouraging, with flow rates tracking well against the expectations of the Company's reservoir engineers prior to commencement of the testing process.
Post the end of the quarter, a sustained gas flow has been achieved at Selemo 1. This is a significant milestone and a key step in the process of achieving an economic flow rate. Gas rates are expected to grow over the coming months.
Downstream activities
Tlou has made significant progress on its downstream plans for the development of gas-to-power projects in Botswana. During the quarter, Tlou has continued discussions with a number of power development, investor and lender groups, with a strong appetite for African based energy projects.
There is considerable interest from these groups 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 Company has had positive discussions with the Botswana government in relation to its application for a gas-to-power project. Based on these discussions the Company is confident of a favourable response being received 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 acquisition of 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/5802W_1-2016-4-27.pdf
Tlou- Key Statistics (as at 31 March 2016)
· ASX Code - TOU
· AIM Code- TLOU
· Shares on issue ~ 206 million
· Fully diluted ~ 218 million
· Cash balance ~ $1.94 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 |
| 31 March 2016 |
Consolidated statement of cash flows
Cash flows related to operating activities
| Current quarter $A'000 | Year to date (9 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 | (533)
(597) | (5,373)
(2,557) |
1.3 | Dividends received |
|
|
1.4 | Interest and other items of a similar nature received | 5 | 24 |
1.5 | Interest and other costs of finance paid |
|
|
1.6 | Income taxes paid |
|
|
1.7 | Other (VAT/GST Refunds) | 137 | 548 |
|
Net Operating Cash Flows | (988) | (7,357) |
|
Cash flows related to investing activities |
|
|
1.8 | Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets |
2 |
(23) |
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 | 2 | (23) |
1.13 | Total operating and investing cash flows (carried forward) | (986) | (7,380) |
1.13 | Total operating and investing cash flows (brought forward) | (986) | (7,380) |
|
Cash flows related to financing activities |
|
|
1.14 | Proceeds from issues of shares, options, etc. | (35) | 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 | (35) | 2,065 |
|
Net increase (decrease) in cash held
|
(1,022) |
(5,315) |
1.20 | Cash at beginning of quarter/year to date | 2,915 | 7,198 |
1.21 | Exchange rate adjustments to item 1.20 | 49 | 59 |
1.22 | Cash at end of quarter | 1,942 | 1,942 |
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 |
112 |
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
| 428 |
4.2 | Development
|
|
4.3 | Production
|
|
4.4 | Administration
| 425 |
|
Total |
853 |
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 | 1,642 | 2,615 |
5.2 | Deposits at call | 300 | 300 |
5.3 | Bank overdraft |
|
|
5.4 | Other (provide details) |
|
|
| Total: cash at end of quarter (item 1.22) | 1,942 | 2,915 |
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) |
10,575,000
|
| Exercise price $0.625
| Expiry date 30-April-2016
|
7.8 | Issued during quarter | 1,500,000 500,000 |
| $0.14 $0.14 | 29/11/2017 13/01/2018 |
7.9 | Exercised during quarter |
|
|
|
|
7.10 | Expired during quarter |
|
|
|
|
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: 28 April 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.
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