16Nov 2016

Part Two Q&A – Colm Cloonan(LON:TLOU)Tlou Energy

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Share Talk interviewed Tlou Energy (LON:TLOU) Colm Cloonan, finance director last month . The Company announced that it has received an initial Independent Reserve Certification for its 100% owned Lesedi coal bed methane project in Botswana, the first certified gas reserves ever in Botswana.

Share Talk asked share holders to submit questions for the podcast. We received such a great responce, we ran out of time and were unable to submit all the questions. Colm agreed to answer any further questions and today we publish part two of the Tlou Energy Q&A.

Oct 14, 2016 Initial independent gas reserve certification First time on the show last month, we asked Colm a bit more about Tlou Energy and about the chronic energy shortages currently being experienced in Botswana? We ask what does it mean for Tlou receiving this initial independent gas reserve certification.

 

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Tlou’s principal assets are in Botswana, where it has the one of the most advanced CBM projects in southern Africa. Tlou’s 100% owned Lesedi CBM project has an independently certified contingent resource of up to 3.3 trillion cubic feet (TCF) (3C) with a further prospective resource totalling 8.6 TCF (High Estimate). Tlou is aiming to have certified gas reserves in the near future.
Botswana and other southern African countries are currently experiencing electricity supply deficits. Tlou believes the electricity market represents an attractive commercialisation path for the company’s CBM.
Tlou’s board includes former principals of Sunshine Gas and Mitchell Energy, who were pioneers in the highly successful eastern Australian CBM industry. Tlou is positioned to capitalise on a first mover advantage in the southern African onshore gas industry.
Tlou Energy is assessing new opportunities across the southern Africa region but remains focussed on Botswana for the foreseeable future.

 

Colm nice to see you back on Share Talk and thank you for taking the time to answer all the share holders questions we sent to the company. We collected some of questions from the London South East bullition boards and would like to thank all the subscribers.

  • What is rough forward plan to expand reserves, Remediate the lesedi well issue and attempt to de-water and test there? Are there any plans to continue testing at Mopani and/or drill a lateral well to intersect Mopani 2P?

The company will continue with its gas flow testing operations at the Selemo pilot. Further production from the Selemo wells may be used to expand reserves. Further gas flow testing at wells already drilled by the company is another option open to the company with dewatering and flow testing the existing Lesedi wells a potential option. At present, there are no plans to drill at or test the Mopani wells.

  • What size of resource at 1P / 2P they need to get the 50MW plant of the ground and what time frame they expect to achieve that in.

For a 50Mw power station, a rough estimate of about 50 BCF of 2P would be required for a 10 year project, along with a multiple of 3P. However, as we plan to develop the power station in stages a much lower amount would be required initially for the first 10Mw of generation.

  • Is there a plan to run an initial 10MW pilot or are there talks with third parties strictly around moving to a 50MW plant?

The current plan is to build the 50Mw project in stages, initially starting with getting to the first 10Mw and increasing thereafter.

  • Can we have an update on the GE discussions, as well as the latest on agreeing the terms of an of take agreement with the Government.

Discussion with GE regarding option to develop the 50Mw project are ongoing with no binding agreements signed. The government of-take negotiations are also continuing with the company currently awaiting a response from the government regarding some key terms of the proposal.

  •  Are they happy with the initial reserve size quoted on the results”

Getting gas reserves in Botswana is a great result for the company. The initial quantum was expected to be relatively low, with flow testing data only available from the Selemo area, which represents just a fraction of the potential contingent resource.

  •  If so, assuming lesedi is included as the next test would the ground between both wells selemo and lesedi be measure (providing comms existed) as surely that would grow the reserve exponentially?

It is not possible to say at present as the level of additional reserves booked is depended on various factors and data available to the reserve certifiers at that time and his or her professional opinion based on that data.

  • Is the Company expecting Communication between the Lesedi and the Selemo Wells, and is the intention to therefore prove up the area between these Pods at the next upgrade?

We do not expect direct communication between the Lesedi and Selemo wells due to the distance between the wells. Increasing reserves across the licence area is a key focus going forward with several options available which may include the area between the Selemo and Lesedi wells as well asother areas within the licence.

Colm Cloonan
Tlou Energy Limited

Share Talk would like to thank all the people who took the time to submit questions and we look forward to covering Tlou Energy #TLOU in the future.

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