REG - Tlou Energy Ltd - Operational Report - Quarter ended 30 Sep 2022
26/10/2022 07:17
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RNS Number : 1137E Tlou Energy Ltd 26 October 2022
26 October 2022
Tlou Energy Limited
("Tlou" or "the Company")
Operational Report - Quarter ended 30 September 2022
Highlights
Ø Transmission line construction progressing
Ø Lesedi 4 production well continues to produce gas and the Lesedi 3 well has
been shut in
Ø Cash position of ~A$5.9m (unaudited) at the end of the quarter
Projects
The Company has three project areas in Botswana.
· Lesedi Project - Power Development, Exploration & Evaluation
· Mamba Project - Exploration & Evaluation
· Boomslang Project - Exploration & Evaluation
Lesedi Project
The Lesedi Project consists of three Prospecting Licences (PL) and a
Production Licence. The first stage of development is a 10MW power generation
facility which will be located in the Company's Production Licence area.
Gas-to-Power project
Electricity generated at the Lesedi 10MW gas fired power facility will be sold
under a Power Purchase Agreement (PPA) with Botswana Power Corporation (BPC),
the national power utility in Botswana. Once in full production 10MW of
generation could provide annual revenue of approximately US$10m.
The project is being developed in two parts, (i) the Lesedi site development
and (ii) the transmission line interconnect between the Lesedi site and the
existing power grid.
Transmission Line Construction
To connect to Botswana's power grid, a 100 km transmission line is being built
from the Lesedi project area to join the grid near the town of Serowe.
Construction is being done by Zismo Engineering Pty Ltd (Zismo) and is
expected to be completed around mid-2023. Progress at the end of September was
16%. Zismo plans to source a second drill rig for excavation and pole planting
to increase the rate of progress along the line. In addition to the
transmission line, substations at either end of the line are due to be
constructed. This is expected to be completed in the second half of 2023. Sale
of electricity can start thereafter.
Lesedi Development Operations
The Company has acquired land in the Lesedi project area where work is
underway on a purpose-built operations facility including accommodation and
associated infrastructure required for the initial 10MW development and to
allow for rapid project expansion thereafter.
The Lesedi site development is being undertaken by Tlou through its consultant
contractor African Gas Services (AGS). Tlou and AGS are undertaking the design
and procurement services for the development of the Lesedi Power Project. AGS
is also undertaking the management and construction of the power plant, the
gas field development and gas gathering network.
Layout design and surveying of the gas central processing facility is also
complete. Generation site clearing has commenced and requests for quotation
for generation assets have been sent to suppliers.
Gas production
Tlou has two production wells Lesedi 3 and Lesedi 4. Lesedi 4 continues to
produce gas. During the quarter the Company decided to shut in the Lesedi 3
well as sufficient data exists from this well and there is no need to incur
further production costs at this time. The well can be brought back into
production as required.
Lesedi 3 and Lesedi 4 have been dewatering in isolation and gas flow rates are
expected to continue to increase particularly when additional wells are
drilled and can assist with dewatering of the reservoir. Additional wells are
required to produce sufficient gas for development of the 10MW project.
The status of the Lesedi licences is as follows:
Licence Expiry Status
Production Licence 2017/18L August 2042 Current
PL 001/2004 September 2023 Current
PL 003/2004 September 2023 Current
PL 037/2000 September 2022 Renewal application submitted
Mamba Project
The Mamba project consists of five PL's covering an area of approximately
4,500 Km(2). The Mamba area is situated adjacent to Lesedi. In the event of a
gas field development by Tlou, the Mamba area provides the Company with
flexibility and optionality.
The Mamba project is in the exploration and evaluation phase with further
operations required on these licences. The next stage of exploration is likely
to be seismic surveying and core hole drilling. Positive results from
operations at Mamba could expand the reserves footprint across Tlou's project
areas.
In the event of successful development at Mamba, it is envisioned that this
area would be developed as a separate project from Lesedi, with the potential
for gas-fired power, solar power, and hydrogen production.
The status of the Mamba licences is as follows:
Licence Expiry Status
PL 237/2014 September 2023 Current
PL 238/2014 September 2023 Current
PL 239/2014 September 2023 Current
PL 240/2014 September 2023 Current
PL 241/2014 September 2023 Current
Boomslang Project
Prospecting Licence, PL011/2019 designated "Boomslang", is approximately 1,000
Km(2) and is situated adjacent to the Company's existing licences. To date,
the Company has not carried out ground operations in the Boomslang area.
The status of the Boomslang licence is as follows:
Licence Expiry Status
PL 011/2019 June 2024 Current
Cash Position
At the end of the quarter the Company had ~A$5.9m cash on hand (unaudited).
The aggregate value of payments to related parties and their associates of
A$157k for the quarter (shown in item 6.1 of the attached Quarterly Cashflow
Report) relates to directors' salaries and fees (including tax and
superannuation payments made on their behalf) and office rent.
The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.
By Authority of the Board of Directors
Mr. Anthony Gilby
Managing Director
****
For further information regarding this announcement please contact:
Tlou Energy Limited +61 7 3040 9084
Tony Gilby, Managing Director
Solomon Rowland, General Manager
Grant Thornton (Nominated Adviser) +44 (0)20 7383 5100
Harrison Clarke, Colin Aaronson, Ciara Donnelly
Arden Partners (UK Broker) +44 (0) 20 7614 5900
Simon Johnson
Public Relations
Ashley Seller +61 418 556 875
About Tlou
Tlou is developing energy solutions in Sub-Saharan Africa through gas-fired
power and planned solar power and hydrogen projects. The Company is listed on
the ASX (Australia), AIM (UK) and the BSE (Botswana). The Lesedi Gas-to-Power
Project ("Lesedi") is 100% owned and is the Company's most advanced project.
Tlou's competitive advantages include the ability to drill cost effectively
for gas, operational experience and Lesedi's strategic location in relation to
energy customers. All major government approvals have been achieved.
Forward-Looking Statements
This announcement may contain certain forward-looking statements. Actual
results may differ materially from those projected or implied in any
forward-looking statements. Such forward-looking information involves risks
and uncertainties that could significantly affect expected results. No
representation is made that any of those statements or forecasts will come to
pass or that any forecast results will be achieved. You are cautioned not to
place any reliance on such statements or forecasts. Those forward-looking
and other statements speak only as at the date of this announcement. Save as
required by any applicable law or regulation, Tlou Energy Limited undertakes
no obligation to update any forward-looking statements.
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity
Tlou Energy Limited
ABN Quarter ended ("current quarter")
79 136 739 967 30 September 2022
Consolidated statement of cash flows Current quarter Year to date (3 months)
$A'000
$A'000
1. Cash flows from operating activities
1.1 Receipts from customers
1.2 Payments for
(a) exploration & evaluation
(b) development (63) (63)
(c) production
(d) staff costs (220) (220)
(e) administration and corporate costs (345) (345)
1.3 Dividends received (see note 3)
1.4 Interest received
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Government grants and tax incentives
1.8 Other (provide details if material) 120 120
1.9 Net cash from / (used in) operating activities (508) (508)
2. Cash flows from investing activities
2.1 Payments to acquire or for:
(a) entities
(b) tenements
(c) property, plant and equipment (18) (18)
(d) exploration & evaluation (1,379) (1,379)
(e) investments
(f) other non-current assets (402) (402)
2.2 Proceeds from the disposal of:
(a) entities
(b) tenements
(c) property, plant and equipment
(d) investments
(e) other non-current assets
2.3 Cash flows from loans to other entities
2.4 Dividends received (see note 3)
2.5 Other (provide details if material)
2.6 Net cash from / (used in) investing activities (1,799) (1,799)
3. Cash flows from financing activities 1 1
3.1 Proceeds from issues of equity securities (excluding convertible debt
securities)
3.2 Proceeds from issue of convertible debt securities
3.3 Proceeds from exercise of options
3.4 Transaction costs related to issues of equity securities or convertible debt
securities
3.5 Proceeds from borrowings
3.6 Repayment of borrowings
3.7 Transaction costs related to loans and borrowings
3.8 Dividends paid
3.9 Other (provide details if material) (5) (5)
3.10 Net cash from / (used in) financing activities (4) (4)
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 7,875 7,875
4.2 Net cash from / (used in) operating activities (item 1.9 above) (508) (508)
4.3 Net cash from / (used in) investing activities (item 2.6 above) (1,799) (1,799)
4.4 Net cash from / (used in) financing activities (item 3.10 above) (4) (4)
4.5 Effect of movement in exchange rates on cash held 319 319
4.6 Cash and cash equivalents at end of period 5,883 5,883
5. Reconciliation of cash and cash equivalents Current quarter Previous quarter
at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts
$A'000
$A'000
5.1 Bank balances 5,883 7,875
5.2 Call deposits
5.3 Bank overdrafts
5.4 Other (provide details)
5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 5,883 7,875
6. Payments to related parties of the entity and their associates Current quarter
$A'000
6.1 Aggregate amount of payments to related parties and their associates included 157
in item 1
6.2 Aggregate amount of payments to related parties and their associates included
in item 2
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity
report must include a description of, and an explanation for, such payments.
7. Financing facilities Total facility amount at quarter end Amount drawn at quarter end
Note: the term "facility' includes all forms of financing arrangements available to the entity.
$A'000
$A'000
Add notes as necessary for an understanding of the sources of finance available to the entity.
7.1 Loan facilities
7.2 Credit standby arrangements
7.3 Other (please specify)
7.4 Total financing facilities
7.5 Unused financing facilities available at quarter end
7.6 Include in the box below a description of each facility above, including the
lender, interest rate, maturity date and whether it is secured or unsecured.
If any additional financing facilities have been entered into or are proposed
to be entered into after quarter end, include a note providing details of
those facilities as well.
8. Estimated cash available for future operating activities $A'000
8.1 Net cash from / (used in) operating activities (item 1.9) 508
8.2 (Payments for exploration & evaluation classified as investing activities) 1,379
(item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 8.2) 1,887
8.4 Cash and cash equivalents at quarter end (item 4.6) 5,883
8.5 Unused finance facilities available at quarter end (item 7.5) -
8.6 Total available funding (item 8.4 + item 8.5) 5,883
8.7 Estimated quarters of funding available (item 8.6 divided by item 8.3) 3
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7.
8.8 If item 8.7 is less than 2 quarters, please provide answers to the following
questions:
8.8.1 Does the entity expect that it will continue to have the current
level of net operating cash flows for the time being and, if not, why not?
Answer:
8.8.2 Has the entity taken any steps, or does it propose to take any
steps, to raise further cash to fund its operations and, if so, what are those
steps and how likely does it believe that they will be successful?
Answer:
8.8.3 Does the entity expect to be able to continue its operations and
to meet its business objectives and, if so, on what basis?
Answer:
Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2
and 8.8.3 above must be answered.
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters
disclosed.
Date:
.....26/10/2022...............................................................
Authorised by: ....By the
Board.............................................................
(Name of body or officer authorising release - see note 4)
Notes
1. This quarterly cash flow report and the accompanying
activity report provide a basis for informing the market about the entity's
activities for the past quarter, how they have been financed and the effect
this has had on its cash position. An entity that wishes to disclose
additional information over and above the minimum required under the Listing
Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in
accordance with Australian Accounting Standards, the definitions in, and
provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and
AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash
flow report has been prepared in accordance with other accounting standards
agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent
standards apply to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities, depending
on the accounting policy of the entity.
4. If this report has been authorised for release to the
market by your board of directors, you can insert here: "By the board". If it
has been authorised for release to the market by a committee of your board of
directors, you can insert here: "By the [name of board committee - eg Audit
and Risk Committee]". If it has been authorised for release to the market by a
disclosure committee, you can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the
market by your board of directors and you wish to hold yourself out as
complying with recommendation 4.2 of the ASX Corporate Governance Council's
Corporate Governance Principles and Recommendations, the board should have
received a declaration from its CEO and CFO that, in their opinion, the
financial records of the entity have been properly maintained, that this
report complies with the appropriate accounting standards and gives a true and
fair view of the cash flows of the entity, and that their opinion has been
formed on the basis of a sound system of risk management and internal control
which is operating effectively.
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