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Tlou Energy Limited (ASX:TOU) is a Queensland, Australia based energy company providing Gas-to-Power solutions, listed on three exchanges namely ASX, AIM, and BSE. It is engaged in the Botswana and Southern Africa region with the development of its projects using the Coal Bed Methane (CBM) natural gas.
The company is currently operating on two 100% owned projects, which are advanced gas projects located in Botswana. TOU covers an area of about 3,800 square km through its 100% owned 25 years Mining License and 4 Coal and CBM Prospecting Licenses over Lesedi CBM Project (operational since 2007) and an area of about 4,500 square km through 5 Coal and CBM Prospecting Licenses over Mamba Project. These 2 projects have provided TOU 2P gas Reserves of ~41 BCF and have a significant additional potential through Contingent Gas Resources of approx. 3,044 BCF and 3P gas Reserve of ~427 BCF.Â
The company is further planning to establish a solar plant in their design work for the power station as the solar plant requires less maintenance and can be monitored remotely at any time. It plans to supply the electricity generated from CBM in Botswana to its neighbouring countries.
Today, the company has provided updates over the quarterly activities for its second quarter ending 31 December 2018. The company has started the drilling of pilot production wells as the Lesedi CBM Project. A total of 3 pods with two lateral wells each are planned to be drilled of which the top-hole section for the first pod was drilled during the quarter and is expected to complete the lateral section of the second pod in early 2019. TOU has submitted the Environmental Impact Assessment (EIA) report and has lodged a re-tender with the government for the development of CBM fuelled pilot power plant.
The company had also provided updates over the quarterly cashflow for the same period. It reported net cash used in operating activities of A$3.398 million in 2Q19 and A$4.931 million for 1H19 majorly flowing through the payments for exploration and evaluation. The company estimated the same to be A$5.351million in its previous quarterly updates.
The net cash used in investing activities was recorded at A$602K for 2Q19 and A$1.771 for 1H19 on account of purchase of PP&E during the period. Net cash from financing activities was reported as A$411K for 2Q19 and A$5.229 million for 1H19 for the proceeds from issues of shares.
The Effect of movement in exchange rates on cash held was A$6K for 2Q19 and A$(25)K for 1H19. The company reported a cash balance of A$5.521 as on 31 December 2018 and estimated cash outflows for the next quarter of A$3.327 million.
The TOU stock has generated a positive return of 16.67% during the last month. It closed the dayâs session at A$0.105 on 23 January 2019 with no change in the price. The company has ~409.11 million shares outstanding with the market cap of circa A$42.96 million. TOUâs 52-week high and low are marked at A$0.270 and A$0.074 respectively.
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