REG - Tlou Energy Ltd - Quarterly Activities Report q/e 30 June 2024
26/07/2024 07:00
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RNS Number : 9279X Tlou Energy Ltd 26 July 2024
26 July 2024
Tlou Energy Limited
("Tlou" or "the Company")
Quarterly Activities Report for the quarter ended 30 June 2024
Highlights
Ø Work at Lesedi progressing to plan and targeting first power generation
later this year
Ø Lesedi electrical substation is ~64% complete with expected completion in
3Q 2024
Ø Gas flowing at Lesedi 6 production pod, work-over completed on the Lesedi 4
pod
Ø Power generation setup and installation options being agreed with suppliers
Lesedi Project
Lesedi is Tlou's most advanced project. Work has been ongoing at Lesedi for
some time with the project targeting first power generation later this year.
Lesedi 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.
The Lesedi development involves the following key elements:
· Gas production
· Electricity generation
· Substation construction
· Transmission and sale of electricity
The status of each of the above at the end of the reporting quarter is
outlined below.
Gas production
Coalbed methane gas from the Company's gas field in central Botswana will be
used for power generation.
To produce gas, the Company drills dual lateral production wells referred to
as "pods" which consist of a vertical production well and two lateral wells
that intersect the production well. The Company currently has two production
pods, Lesedi 4 and Lesedi 6. Both pods have produced gas for a sustained
period. Lesedi 6 remains in production while Lesedi 4 has been flushed clean
of coal fines that periodically build-up and brought back into production post
quarter end.
Lesedi 4 and Lesedi 6 will provide the initial gas for power generation.
Further pods are planned to be drilled once funding is in place, with
discussions ongoing with debt providers during the quarter. Preparatory work
for the next drilling campaign has already begun. Additional pods will provide
further gas allowing the Company to scale up in a stepwise manner using gas
production to expand electricity generation and associated revenue.
Once drilled, a pod needs to be dewatered which involves removing water from
the target coal seam and thereafter gas flow increases. As more and more pods
are drilled the coal will get progressively dewatered which should aid future
gas production.
Lesedi 4 vertical production well - July 2024
Electricity Generation
Electricity will be generated on site and sold into the national power grid in
Botswana. Power will be sold to Botswana Power Corporation (BPC) under an
agreed 10MW Power Purchase Agreement (PPA).
The project is planned to grow incrementally to satisfy the 10MW PPA and then
expand further. First generation will be from gas produced at Lesedi 4 and
Lesedi 6 with further generation units planned to be added as additional gas
is produced.
During the quarter the Company has been working with suppliers in relation to
the final design, site setup and delivery options for the initial generators
which are planned to arrive in the coming months.
Gas produced from each pod is gathered and piped to the power generators. Work
on the gas gathering network began in the previous quarter and continued into
this reporting period. The gas gathering lines can be finalised once the
generators are onsite.
Substation Construction
Electricity produced by the generators will be fed into the electrical
substation which is under construction at the Lesedi site.
The substation is approximately 64% complete and has been designed to support
over 20MW of power. The substation is scheduled for completion in September
2024.
Control room and transformer plinth construction at the Lesedi substation -
July 2024
Transmission Line Construction
To connect to the national grid, the Company constructed a 100km 66kV
transmission line that will tie into the substation at Lesedi and join the
existing power grid at the town of Serowe.
As previously reported, construction of the transmission line has been
completed with minor finishing works and the addition of switchgear at the
Serowe end to be done prior to the line being energized. The line remains
under care and maintenance until energization.
A 66kV line is capable of carrying ~25MW of power. This would allow the
company to rapidly expand beyond 10MW.
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:
Licence Expiry Status
Production Licence 2017/18L Aug-42 Current
PL001/2004 Mar-26 Current
PL003/2004 Mar-26 Current
PL035/2000 Mar-25 Current
PL037/2000 Mar-25 Current
****
Other Project Areas
In addition to the Lesedi project the company has two other areas of interest
adjacent to Lesedi known as the Mamba and Boomslang projects.
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 Km(2). 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. The status of the Mamba licences are as follows:
Licence Expiry Status
PL 237/2014 Dec-25 Current
PL 238/2014 Dec-25 Current
PL 239/2014 Dec-25 Current
PL 240/2014 Dec-25 Current
PL 241/2014 Mar-26 Current
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
Km(2). 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.
The status of the Boomslang licence is as follows:
Licence Expiry Status
PL 011/2019 Jun-26 Current
PL renewal applications are submitted three months prior to expiration.
****
Cash Position
At the end of the quarter the Company had ~A$2.52m cash on hand (unaudited).
The aggregate value of payments to related parties and their associates of
A$340k 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.
By Authority of the Board of Directors
Mr. Anthony Gilby
Managing Director
****
For further information regarding this announcement please contact:
Tlou Energy Limited +61 7 3040 9084
Tony Gilby, Managing Director
Solomon Rowland, General Manager
Grant Thornton (Nominated Adviser) +44 (0)20 7383 5100
Harrison Clarke, Colin Aaronson, Elliot Peters
Zeus Capital (UK Broker) +44 (0)20 3829 5000
Simon Johnson
Investor Relations
Ashley Seller (Australia) +61 418 556 875
FlowComms Ltd - Sasha Sethi (UK) +44 (0) 7891 677 441
About Tlou
Tlou is developing energy solutions in Sub-Saharan Africa through gas-fired
power and ancillary projects. The Company is listed on the ASX (Australia),
AIM (UK) and the BSE (Botswana). The Lesedi Gas-to-Power Project ("Lesedi") is
100% owned and is the Company's most advanced project. Tlou's competitive
advantages include the ability to drill cost effectively for gas, operational
experience and Lesedi's strategic location in relation to energy customers.
All major government approvals have been achieved.
Forward-Looking Statements
This announcement may contain certain forward-looking statements. Actual
results may differ materially from those projected or implied in any
forward-looking statements. Such forward-looking information involves risks
and uncertainties that could significantly affect expected results. No
representation is made that any of those statements or forecasts will come to
pass or that any forecast results will be achieved. You are cautioned not to
place any reliance on such statements or forecasts. Those forward-looking and
other statements speak only as at the date of this announcement. Save as
required by any applicable law or regulation, Tlou Energy Limited undertakes
no obligation to update any forward-looking statements.
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity
Tlou Energy Limited
ABN Quarter ended ("current quarter")
79 136 739 967 30 June 2024
Consolidated statement of cash flows Current quarter Year to date (12 months)
$A'000
$A'000
1. Cash flows from operating activities
1.1 Receipts from customers
1.2 Payments for
(a) exploration & evaluation
(b) development
(c) production
(d) staff costs (434) (1,220)
(e) administration and corporate costs (703) (1,867)
1.3 Dividends received (see note 3)
1.4 Interest received 1 13
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Government grants and tax incentives
1.8 Other (provide details if material) 15 129
1.9 Net cash from / (used in) operating activities (1,120) (2,945)
2. Cash flows from investing activities
2.1 Payments to acquire or for:
(a) entities
(b) tenements
(c) property, plant and equipment 401 (709)
(d) exploration & evaluation (3,316) (12,606)
(e) investments
(f) other non-current assets
2.2 Proceeds from the disposal of:
(a) entities
(b) tenements
(c) property, plant and equipment
(d) investments
(e) other non-current assets
2.3 Cash flows from loans to other entities
2.4 Dividends received (see note 3)
2.5 Other (provide details if material)
2.6 Net cash from / (used in) investing activities (2,915) (13,315)
3. Cash flows from financing activities 560 8,480
3.1 Proceeds from issues of equity securities (excluding convertible debt
securities)
3.2 Proceeds from issue of convertible debt securities
3.3 Proceeds from exercise of options
3.4 Transaction costs related to issues of equity securities or convertible debt (11) (88)
securities
3.5 Proceeds from borrowings 3,570
3.6 Repayment of borrowings
3.7 Transaction costs related to loans and borrowings
3.8 Dividends paid
3.9 Other (provide details if material) (5) (19)
3.10 Net cash from / (used in) financing activities 545 11,944
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 5,976 6,851
4.2 Net cash from / (used in) operating activities (item 1.9 above) (1,120) (2,945)
4.3 Net cash from / (used in) investing activities (item 2.6 above) (2,915) (13,315)
4.4 Net cash from / (used in) financing activities (item 3.10 above) 545 11,944
4.5 Effect of movement in exchange rates on cash held 31 (19)
4.6 Cash and cash equivalents at end of period 2,517 2,517
5. Reconciliation of cash and cash equivalents Current quarter Previous quarter
at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts
$A'000
$A'000
5.1 Bank balances 2,517 5,976
5.2 Call deposits
5.3 Bank overdrafts
5.4 Other (provide details)
5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 2,517 5,976
6. Payments to related parties of the entity and their associates Current quarter
$A'000
6.1 Aggregate amount of payments to related parties and their associates included 340
in item 1
6.2 Aggregate amount of payments to related parties and their associates included
in item 2
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity
report must include a description of, and an explanation for, such payments.
7. Financing facilities Total facility amount at quarter end Amount drawn at quarter end
Note: the term "facility' includes all forms of financing arrangements available to the entity.
$A'000
$A'000
Add notes as necessary for an understanding of the sources of finance available to the entity.
7.1 Loan facilities 1,000 480
7.2 Credit standby arrangements
7.3 Other (please specify)
7.4 Total financing facilities 1,000 480
7.5 Unused financing facilities available at quarter end 520
7.6 Include in the box below a description of each facility above, including the
lender, interest rate, maturity date and whether it is secured or unsecured.
If any additional financing facilities have been entered into or are proposed
to be entered into after quarter end, include a note providing details of
those facilities as well.
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8. Estimated cash available for future operating activities $A'000
8.1 Net cash from / (used in) operating activities (item 1.9) 1,120
8.2 (Payments for exploration & evaluation classified as investing activities) 3,316
(item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 8.2) 4,436
8.4 Cash and cash equivalents at quarter end (item 4.6) 2,516
8.5 Unused finance facilities available at quarter end (item 7.5) 520
8.6 Total available funding (item 8.4 + item 8.5) 3,036
8.7 Estimated quarters of funding available (item 8.6 divided by item 8.3) 0.7
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8.8 If item 8.7 is less than 2 quarters, please provide answers to the following
questions:
8.8.1 Does the entity expect that it will continue to have the current
level of net operating cash flows for the time being and, if not, why not?
Answer: The net operating cash flow can fluctuate depending on operational
requirements in a specific quarter. Is it expected that the next quarter will
be similar to the level of net operating cash flows in this reporting period.
8.8.2 Has the entity taken any steps, or does it propose to take any
steps, to raise further cash to fund its operations and, if so, what are those
steps and how likely does it believe that they will be successful?
Answer: The company is working on raising additional capital in the near term.
Discussions are ongoing with debt providers looking at providing sufficient
capital for the company to achieve its stated target of getting connected to
the power grid in Botswana and selling electricity. The debt providers will
need to complete their internal due diligence on the company prior to
allocation of funds. Subject to the results of this due diligence, funds from
one or more of these groups is expected in Q3 2024. In addition, the company
may raise equity capital via a placement in advance of receiving debt funding
if necessary. While indications from the debt providers and discussions with
potential equity investors have been positive, the company cannot guarantee
that sufficient capital will be raised either from debt providers or from a
potential placement.
8.8.3 Does the entity expect to be able to continue its operations and
to meet its business objectives and, if so, on what basis?
Answer: The company expects to be able to continue operations and meet
business objectives should sufficient funds be received from the ongoing
discussions. If not the company may need to delay or postpone planned
activities until sufficient capital becomes available.
Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2
and 8.8.3 above must be answered.
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters
disclosed.
Date:
.....26/07/2024...............................................................
Authorised by: ....By the
Board.............................................................
(Name of body or officer authorising release - see note 4)
Notes
1. This quarterly cash flow report and the accompanying
activity report provide a basis for informing the market about the entity's
activities for the past quarter, how they have been financed and the effect
this has had on its cash position. An entity that wishes to disclose
additional information over and above the minimum required under the Listing
Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in
accordance with Australian Accounting Standards, 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. If this quarterly cash
flow report has been prepared in accordance with other accounting standards
agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent
standards apply to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities, depending
on the accounting policy of the entity.
4. If this report has been authorised for release to the
market by your board of directors, you can insert here: "By the board". If it
has been authorised for release to the market by a committee of your board of
directors, you can insert here: "By the [name of board committee - eg Audit
and Risk Committee]". If it has been authorised for release to the market by a
disclosure committee, you can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the
market by your board of directors and you wish to hold yourself out as
complying with recommendation 4.2 of the ASX Corporate Governance Council's
Corporate Governance Principles and Recommendations, the board should have
received a declaration from its CEO and CFO that, in their opinion, the
financial records of the entity have been properly maintained, that this
report complies with the appropriate accounting standards and gives a true and
fair view of the cash flows of the entity, and that their opinion has been
formed on the basis of a sound system of risk management and internal control
which is operating effectively.
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