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.
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.
The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.
In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.
Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.
China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.
Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.
On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.
According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.
The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.
Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.
According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.
The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.
Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.
Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.
Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana. The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.