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Tlou Energy forges ahead with Production Pod drilling

Publishing Date : 21 January, 2019

Author : TSAONE SEGAETSHO

Botswana Stock Exchange-listed Tlou Energy’s Managing Director Tony Gilby said after the just ended Christmas break his operational team has recommenced Production Pod drilling at its advanced stage Lesedi coal bed methane (CBM) project.


This is despite Tlou having submitted a comprehensive response to government's Request for Proposal (RFP) for the supply of up to 100MW of CBM generated power and the tender has been pending for years.    “In October 2018 Tlou submitted a comprehensive tender to the Government of Botswana’s Request for Proposal for the supply of CBM generated power to the Botswana grid. 


While we await a response to  our  tender, we are  pushing  forward with a  number  of work streams including  the  drilling  of  our gas  production  wells,  the  lodgment  of  the  downstream  Environmental  Impact  Assessment,  evaluating  membership  of  the  Southern  African  Power  Pool,  negotiations  for  a  power generation license and discussions to secure development finance upon acquiring an appropriate Power Purchase Agreement (PPA,” said Gilby.


Gilby  said in the company’s website that drilling  operations  at  the  Lesedi  CBM  Project  have  been  progressing  according  to  plan. He said following the Chrismas break, their field team have re-mobilised and have now recommenced drilling activity to complete the production pods at Lesedi from which we intend to produce gas to potentially supply them initial stages of our proposed CBM gas-to-power project.


He said Tlou looks forward to providing investors with further updates in relation to operational progress specifically, the successful completion of the production pods and commencement of production testing activities. While waiting for the Botswana government tender, according to the company, Tlou has also entered into discussions with other potential off-takers of gas and power as well as potential financiers of the downstream development. According to the company, the latter being subject to securing an appropriate Power Purchase Agreement (PPA).


Tlou, the first company in Botswana to have certified CBM gas reserves which currently holds 10 Prospecting Licences covering an area of ~8,300Km2, is listed on the London Stock Exchange’s AIM and the Australian Securities Exchange. The Lesedi Project already benefits from significant, independently certified Contingent Gas Resources of 3.2 trillion cubic feet (3C) and independently certified Gas Reserves.  Operations have been ongoing since 2007.


“Tlou Energy has the most advanced CBM gas to power project in southern Africa (as defined by being the only CBM company in Botswana to have independently certified gas Reserves and a Mining License for production amongst other things),” said Gilby. “Our gas Reserves are large enough to supply significant amounts of clean power to Botswana for amany years.  As  the  project  further  de‐risks,  we  expect  to  provide  significant  upside  for investors as  the  project moves into  development and generates  first  revenue.”


Furthermore, Gilby indicate that the advantages of successful implementation of our project for Botswana areenormos and that the development of a new gas industry would significantly improve energy security as well   as providing vital direct and indirect employment opportunities.

“A  great  deal  of  work  has  been  undertaken  to  prove‐up  Tlou’s  significant  gas  Reserves  to  date. The Company looks forward to making additional progress this year towards becoming a power provider in Southern Africa,” said Gilby.  

Tlou’s drilling update

Tlou has already drilled vertical wells and the top-hole sections for the new production pods at the Lesedi project. According to the company, operations have now recommenced to drill the lateral well sections for the first two Production Pods (Lesedi 3 & 4). Following the completion of lateral wells (Lesedi 3A & 3B and Lesedi 4A & 4B), the production pods will be completed using a separate work-over rig ahead of installation of surface production facilities including water evaporation ponds.


“All of the production pods are being drilled in the same area as has been proposed for the initial project development and are aimed at confirming the gas flows in this area as well as ensuring production readiness prior to commencement of development operations. Dewatering and production testing activities will begin immediately following the completion of the production pods and the company expects to provide regular updates on production testing progress,” said Tlou update.

The Lesedi Project

According to the company, the gas reserves at the Lesedi CBM Project has sufficient gas reserves for an initial development of 10 MW based on 2P gas reserves of ~41 billion ft3. In addition, 3P gas reserves of ~427 billion ft3 and contingent gas resources of ~3044 billion ft3 provide significant additional potential.


The company also estimates that a 10 MW project over 25 years would require gas reserves of approximately 28 billion ft3 and that a 100 MW project for 25 years would require approximately 274 billion ft3. As further data becomes available during the production testing process, it is expected that there may be scope for a further upgrade of gas reserves within the Lesedi Project area.

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