Interim Results

Source Company Press Release
Company Tlou Energy Limited
Tags Corporate: Overview/Strategy, Country: Canada
Date February 26, 2019

Tlou Energy Limited, the ASX, AIM and BSE listed company focused on delivering power in Botswana and southern Africa through the development of coal bed methane ('CBM'), is pleased to announce its interim results for the six months ended 31 December 2018.

Managing Directors' report

The reporting period was focussed on preparations for the new development wells located in the vicinity of the proposed central gas processing and power generation facility.  Additional activity included working on the Environmental Impact Statement for the planned downstream development comprising gas gathering, gas processing, power generation and an electrical transmission line to Serowe.  A submission was also made in October in response to the government of Botswana's request for a proposal in relation to a gas-to-power re-tender.

As a result of the achievements during the period, we are in a good position to make further significant advancements in the months ahead.  We are proceeding with a series of value adding field operations, the most significant of which is the drilling of initial development wells (Lesedi 3 and 4) which is on-going.  These wells have been positioned in the best technical location and orientation to potentially result in enhanced gas flows compared to what has already been achieved at Selemo.  The results of the recently acquired seismic data coupled with an extensive geological review of our area by our independent geological consultants has determined the optimum positioning for the current drilling campaign.

In terms of gaining access to the power grid to ultimately monetise our gas via electricity, we have continued to run parallel processes of going down the path of the re-issued gas-to-power tender (while recognising its challenges) as well as going it alone by gaining all of the necessary approvals to independently connect to the grid in any event.  The Company notes that the Southern African Power Pool region continues to suffer from inadequate investment in electrical power generation capacity and sooner rather than later will again experience significant electrical energy shortages.  This situation will be reinforced on the downside for energy supply in southern Africa should any interruptions of the Eskom supply from South Africa be experienced.  The Tlou project offers cost effective and relatively clean energy for Botswana coupled with providing energy security and much needed jobs with successful implementation.

The near-term objectives, aimed at negating the currently perceived principal risks, are considered by the Company to be achieving an enhanced gas flow from the Lesedi development wells and obtaining a clear pathway to gas monetisation via a power purchase agreement or equivalent.  The first half of 2019 should see significant advancements towards achieving one or both of these objectives.

Review and results of operations

The loss for the half-year after income tax amounted to $1,520,139 (December 2017: loss $1,676,624).  The loss for the half-year is marginally below that of the same period in the prior year.  This ties in with the Company's continued focus on reducing corporate, administrative, and operating costs wherever possible, where this can be done without any adverse effect on performance.

Net spend on exploration activities during the period amounted to $3,594,701.  This is an increase on the comparative period and relates mainly to the development wells that were commenced during the reporting period. 

Subject to the results of the ongoing drilling program and the tender submission to the Government of Botswana, the coming months could be transformational for the Company and we look forward to updating the market as the project progresses.

Thanks to all our shareholders, staff, consultants, advisors, and management for their support during the period.

The Half-year report is available on the Company's website at tlouenergy.com

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