Tlou Energy Provides An Update On Proposal For Power Plant Development In Botswana

Tlou Energy Provides An Update On Proposal For Power Plant Development In Botswana

Tlou Energy Limited (ASX: TOU) is an Oil & Gas company based in Brisbane, Queensland. Today, TOU reported a decision made by the Public Procurement and Asset Disposal Board (“PPADB”) published in the Botswana Daily Newspaper dated 14 May 2019. It outlines the ministry’s approval to the tender submitted by Tlou.

TOU previously submitted a comprehensive response to the Request for Proposal for the development of 100MW Coal Bed Methane Fuelled Power Plants in Botswana. The submission briefly outlines information on the staged development of plant with initial capacity up to 10MW. It also included proposed field development, project feasibility, installation of power generation infrastructure and the supply of power into the gird in Botswana. Upon successful completion of the initial project, the company intends to go for the expansion.

The announcement asserts that the decision made by PPADB will require further clarity from the Ministry of Mineral Resources, Green Technology and Energy Security (MMGE) and PPADB, hence the market will be updated again accordingly.

Quarterly review

The energy company released quarterly reports on 29 April 2019. Some highlight from the quarter are below:

  • Boomslang CBM prospecting license awarded covering highly prospective 1000KM2.
  • Drilling operations at Lesedi CBM project completed successfully on time and within budget.
  • Production wells at Lasedi 3 and 4 commenced production testing.
  • 100MW CBM plant proposal passed eligibility and technical section
  • Raised A$4.1 million post quarter end from sophisticated and professional investors based in Australia and Botswana.

The company’s cash balance stood at A$2.522 million as at the end of March 2019 quarter. This in comparison to the opening balance of $5.52 million, reflecting net cash outflow of $2.99 million during the quarter. The net cash outflow from operating activities was $2.831 million whereas net cash outflow from investing activities stood at 138k due to the cost incurred on property, plant and equipment.

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TOU is dedicated to securing a Power Purchase Agreement in Botswana to supply power connections to the local power grid and Southern African power pools. However, priority remain at the development of ongoing projects like drilling at Lasedi, exploring additional gas reserves within existing projects of the company. The company currently possesses 100% ownership of the three ongoing projects concerned with the production of energy through Coal Bed Methane. These plants include Lesedi CBM Project Area, Mamba Project Area and Boomslang Project Area which are based in Botswana.

(Source: Company Announcement)

Further, during the March 2019 quarter, TOU announced that it has received the approval from Botswana Public Procurement and Asset Disposal Board (“PPADB”) for the the technical stage of the Request for Proposal (RFP) in relation to the development of 100 MW CBM fuelled power plants in Botswana. The technical stage decision score of TOU was 89.8% meanwhile Sekaname (Pty) Ltd scored 86.4%. Therefore, the ministry has requested PPADB to open financial proposal in respect of Tlou Energy Limited and Sekaname (Pty) Ltd

TOU stock sky-rocketed by 12% to last trade at $0.140 on 15 May 2019. The 52-week high and low are A$0.164 and A$ 0.074 respectively with circa 450.18 million shares outstanding.

Over the past one year, the stock has witnessed a negative return of 3.195%. However, the year to date performance of the stock recorded a positive return of 56.25%.


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