Highlights
- Construction of the 66kV transmission line connecting Tlou's Lesedi project directly to Botswana's power grid and the broader Southern African Power Pool has been completed
- The substation to connect Tlou's power generators to the transmission line is approximately 50% complete
- Gas gathering lines being laid to connect Tlou's gas wells to the generation site
- Continued gas production at the Lesedi 4 and Lesedi 6 production pods
- Preparations underway for further production pod drilling with drilling rig secured
Activities
Tlou Energy has three project areas referred to as the:
§ Lesedi Project - focused on gas-to-power development as well as exploration and evaluation.
§ Mamba Project - focused on exploration and evaluation.
§ Boomslang Project - focused on exploration and evaluation.
Lesedi Project
The Lesedi project is Tlou's most advanced. The Lesedi project remains at the forefront of Botswana's gas to power sector, making substantial progress in the development of the proposed 10MW gas-to-power project.
Gas to Power Project
The initial electricity produced at Lesedi is intended to fulfill the 10 MW Power Purchase Agreement (PPA) with Botswana Power Corporation (BPC), the national power utility. The ongoing Lesedi project involves various development components, including drilling of gas production wells, transmission lines, substations, gas gathering and a power generation site.
The Company has two gas production pods, Lesedi 4 and Lesedi 6. Both pods continue to flow gas as the water level is being lowered.
Tlou is confident that with the in-house knowledge gained from previous drilling efforts, extracting more and more gas out of the coal reservoir will become progressively simpler and more cost effective due to economies of scale.
Work on the gas gathering lines commenced during the quarter. This involves laying of pipe to take gas from the wells to the generation site.
Preparatory work for the next drilling campaign has also begun. The Company has secured a drilling rig and discussions are ongoing with relevant suppliers and specialist drilling personnel.
In addition, some minor changes to drilling techniques are being assessed with the aim of further increasing gas production rates.
Transmission Line Construction
To connect to the national grid, the Company constructed a 100km 66kV transmission line to tie in with the existing power grid. Construction of the transmission line has been completed by the contractor. Minor finishing works and the addition of switchgear at the Serowe end will be done prior to the line being energised. The line is planned to remain under care and maintenance until energisation which is expected later this year.
Substation Construction
In addition to the transmission line, an electrical substation is required at the Lesedi end of the transmission line. At the opposite end the line has been connected to the existing BPC substation at Serowe. The substation at Lesedi has being designed to facilitate expansion beyond 10MW which will be beneficial as the projects grows. The Lesedi substation is approximately 50% complete. It is currently anticipated that this work will be completed in Q3 2024.
Lesedi project licences
The project area has four Prospecting Licenses (PL) and a Production Licence which is the focus area for the development of Tlou's independently certified gas reserves and contingent resources. The table below summarises the status of the Lesedi licences:
Mamba Project
The Mamba project is in the exploration and evaluation phase with further operations required on the licences. It consists of five Prospecting Licences covering an area of approximately 4,500 Km2. The Mamba area is situated adjacent to Lesedi. In the event of successful drilling results at Mamba, it is envisioned that this area would be developed as a separate project from Lesedi. The Mamba area provides the Company with flexibility and optionality.
Further work on the Mamba project is proposed once the Lesedi project is in production with initial work likely to include a seismic survey and the drilling of core-holes.
Boomslang Project
Prospecting Licence, PL011/2019 designated "Boomslang", is approximately 1,000 Km2 and is situated adjacent to the Company's existing licences. To date, the Company has not carried out ground operations in the Boomslang area. Like the Mamba project the first stage of operations is likely to include a seismic survey following by core-hole drilling.
PL renewal applications are submitted three months prior to expiration. During the reporting quarter a renewal application for PL011/2019 was submitted.
Cash Position
At the end of the quarter the Company had ~A$5.98m cash on hand (unaudited). The aggregate value of payments to related parties and their associates of A$120k for the quarter (shown in item 6.1 of the Quarterly Cashflow Report) relates to directors' salaries and fees (including tax and superannuation payments made on their behalf) and office rent.
The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.