REG - Tlou Energy Ltd - Publication of Supplementary Prospectus

TLOU EnergyAnnouncement

12/06/2023 16:30

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RNS Number : 4481C  Tlou Energy Ltd  12 June 2023

 

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR PUBLICATION, RELEASE OR
DISSEMINATION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN THE UNITED
STATES, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH
IT WOULD BE UNLAWFUL TO DO SO. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY
CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OF SUCH JURISDICTIONS.

FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT
CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY,
SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY NEW ORDINARY SHARES OF TLOU ENERGY
LIMITED IN ANY JURISIDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL

 

12 June 2023

 

Tlou Energy Limited

("Tlou" or "the Company")

Publication of Supplementary Prospectus

 

 

Tlou Energy Limited has published a supplementary Prospectus dated 12 June
2023. The supplementary Prospectus ("Second Supplementary Prospectus") which
supplements and is intended to be read with the prospectus dated 12 May 2023
(comprising an entitlement prospectus and a supplementary prospectus) in
respect of the partially underwritten entitlement offer of up to 304,156,361
new Offer Shares to raise approximately A$10.65 million (approximately £5.86
million; BWP 92.6 million)) (the "Prospectus"). A copy of the Second
Supplementary Prospectus is included within this announcement.

 

The Prospectus can be viewed on the Company's website:
https://tlouenergy.com/reports/ (https://tlouenergy.com/reports/)

 

Further Information

If you have any questions in relation to any of the above matters, please
contact the Company Secretary at either offer@tlouenergy.com
(mailto:offer@tlouenergy.com) or +61 7 3040 9084, Monday to Friday. For other
questions, you should consult your broker, solicitor, accountant, financial
adviser, or other professional adviser.

 

By Authority of the Board of Directors

Mr. Anthony (Tony) 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

 Zeus Capital (UK Broker)                         +44 (0)20 3829 5000
 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 ancillary 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.

 

IMPORTANT NOTICE

 

Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.

 

This announcement does not constitute, or form part of, a prospectus relating
to Tlou Energy Limited (the "Company"), nor does it constitute or contain any
invitation or offer to any person, or any public offer, to subscribe for,
purchase or otherwise acquire any shares in the Company or advise persons to
do so in any jurisdiction, nor shall it, or any part of it form the basis of
or be relied on in connection with any contract or as an inducement to enter
into any contract or commitment with the Company.

 

The content of this announcement has not been approved by an authorised person
within the meaning of the Financial Services and Markets Act 2000 ("FSMA").

 

This announcement is not for publication or distribution, directly or
indirectly, in or into the United States of America. This announcement is not
an offer of securities for sale into the United States. The securities
referred to herein have not been and will not be registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and may not be
offered or sold in the United States, except pursuant to an applicable
exemption from registration. No public offering of securities is being made in
the United States.

 

This announcement is not for release, publication or distribution, directly or
indirectly, in or into the United States, Canada, the Republic of South
Africa, Japan or any jurisdiction where to do so might constitute a violation
of local securities laws or regulations (a "Prohibited Jurisdiction"). This
announcement and the information contained herein are not for release,
publication or distribution, directly or indirectly, to persons in a
Prohibited Jurisdiction unless permitted pursuant to an exemption under the
relevant local law or regulation in any such jurisdiction. This announcement
has been issued by and is the sole responsibility of the Company.

 

Grant Thornton UK LLP ("Grant Thornton") is acting solely as nominated adviser
exclusively for the Company and no one else in connection with the contents of
this announcement and will not regard any other person (whether or not a
recipient of this announcement) as its client in relation to the contents of
this announcement nor will it be responsible to anyone other than the Company
for providing the protections afforded to its clients or for providing advice
in relation to the contents of this announcement. Apart from the
responsibilities and liabilities, if any, which may be imposed on Grant
Thornton by FSMA or the regulatory regime established thereunder, Grant
Thornton accepts no responsibility whatsoever, and makes no representation or
warranty, express or implied, for the contents of this announcement including
its accuracy, completeness or verification or for any other statement made or
purported to be made by it, or on behalf of it, the Company or any other
person, in connection with the Company and the contents of this announcement
respect, whether as to the past or the future. Grant Thornton accordingly
disclaims all and any liability whatsoever, whether arising in tort, contract
or otherwise (save as referred to above), which it might otherwise have in
respect of the contents of this announcement or any such statement.

 

 

 

TLOU ENERGY LIMITED

ACN 136 739 967

SUPPLEMENTARY PROSPECTUS

Important Information

This is a supplementary prospectus (Second Supplementary Prospectus) which
supplements and is intended to be read with the Prospectus dated 12 May 2023
(Prospectus) and the Supplementary Prospectus (First Supplementary Prospectus)
dated 12 May 2023 (issued by Tlou Energy Limited (ACN 136 739 967) (Company).

This Second Supplementary Prospectus is dated 12 June 2023 and was lodged with
ASIC on that date.

ASIC, the ASX and their respective officers take no responsibility for the
contents of this Supplementary Prospectus.

This Second Supplementary Prospectus should be read together with the
Prospectus and the First Supplementary Prospectus. Other than as set out
below, all details in relation to the Prospectus and the First Supplementary
Prospectus remain unchanged. Terms and abbreviations defined in the Prospectus
have the same meaning in this Supplementary Prospectus. If there is a conflict
between the Prospectus, the First Supplementary Prospectus and this Second
Supplementary Prospectus, this Second Supplementary Prospectus will prevail.

This Second Supplementary Prospectus will be issued with the Prospectus and
First Supplementary Prospectus as an electronic prospectus, copies of which
can be downloaded from the website of the Company at www.tlouenergy.com
(http://www.tlouenergy.com) .

This is an important document and should be read in its entirety. If you do
not understand it, you should consult your professional advisers without
delay.

1.         Purpose of this Supplementary Prospectus

The purpose of this Second Supplementary Prospectus is to provide additional
information to investors (as set out in Section 3 below) following feedback
from ASIC.

2.         Updates to the Prospectus

2.1       Timetable

The Offer timetable is adjusted as set out below and references in the
Prospectus (read with the First Supplementary Prospectus) to the dates set out
below are amended in conformity to this revised timetable:

 Event                                                                           Date
 Last day to extend the Closing Date of the Offer                                Tuesday, 13 June 2023
 Closing date - AIM:  latest time and date for settlement of CREST application   Thursday 15 June 2023
 and payment in full under the Offer (1pm BST)

 Closing date - BSE:  latest time and date for settlement of BSE applications
 and payment in full under the Offer (1pm CAT)
 Closing Date - ASX:  latest time and date for settlement of applications and    Friday, 16 June 2023
 payment in full under the Offer (5pm AEST)
 Securities quoted on a deferred settlement basis.                               Monday 19 June 2023
 Announcement of results of the Offer and shortfall (if any)                     Tuesday  20 June 2023
 Shortfall settlement (if any)                                                   Wednesday 21 June 2023
 Issue date and lodgement of Appendix 2A with ASX applying for quotation of the  Thursday 22 June 2023
 New Shares
 Trading in New Shares commences                                                 Friday 23 June 2023

2.2       Chairman's letter

Paragraph 4 on page 10 of the Prospectus is supplemented with the following:

There are no provisions under the PPA that penalise the Company for any
failure to provide electricity by a stipulated date, or even failure to do so
before the agreement lapses.

The text after paragraph 7 on page 10 of the Prospectus and page 11 of the
Prospectus is supplemented with the following:

The funds sought pursuant to the Offer have been allocated as set out in
Section 3.1 (as amended below), which illustrates the Company's intentions
should it raise either the underwritten amount of the Offer (plus Director
commitments) or the Offer is fully subscribed.  In either case, the Company
is prioritising capital expenditure items to advance the Company towards
connection to the grid and first power generation, including completion of
substations and the connecting power line, as well as a deposit to order the
first modular power station.

If the Offer is fully subscribed and subject to obtaining further funding of
approximately A$5 million (the nature and source of which has yet to be
determined), the Company plans to construct and commission the power station
in early 2024 to achieve the milestone of first power generation.

If only the underwritten amount (plus Director commitments) is raised, the
Company will require another $10,000,000 to bring the project into first power
production using existing wells.

The time and cost required to scale up from initial power generation from the
Company's existing wells, to the desired 2MW and beyond, depends on the gas
flow rates achieved at the Company's new Lesedi 6 pod and redrill of the
laterals in Lesedi 4.  At this time, the Company has not progressed the
Lesedi 6 well pod sufficiently to determine its flow-rate and has no update
regarding flow rates from Lesedi 3 and 4, since Lesedi 4 laterals will be
redrilled after completion of Lesedi 6, if justified by the results achieved
at Lesedi 6.  The Company expects to be in a position in October 2023 to
disclose initial gas flow rates of Lesedi 6 and 4 after completion of drilling
and dewatering.

Illustratively, the drilling of each dual lateral production pod (of which
Lesedi 4 and 6 are examples), costs approximately A$1,500,000.  Should the
Company wish to drill additional wells after completion of the current program
to increase power generation, it may seek additional capital at that time.

2.3       The Addendum on page 12 of the Prospectus

The following is added where indicated:

The Lesedi Gas to Power Project

As Tlou's Chairman outlined in his letter, the Company is well positioned,
subject to raising between $5 million and $10 million in additional capital
(depending on the level of subscriptions received under the Offer) to deliver
first electricity generation in 2Q 2024, with the goal of expanding thereafter
incrementally to reach our 10MW contracted target through additional drilling
and well development.

As stated by the Chairman, once initial power generation is achieved using the
Company's existing wells, the time and cost required to increase production
from the initial level will depend on the gas flow rates achieved after
completion of the drilling of Lesedi 6 and the proposed redrill of Lesedi 4.

Purpose of the Offer

Subject to further funding of between $5 million and $10 million (depending on
the level of subscriptions received under the Offer (refer to Section 3.1 (as
amended below)), the Company plans to construct and commission the power
station by 2Q 2024 to achieve the milestone of first power generation, using
its existing wells.  Should the Company wish to drill additional wells after
completion of the current program, it may seek additional capital at that
time.

Drilling campaign, gas flow rates and impact on economics

Drilling of Lesedi 6 is expected to be completed in June/July 2023. The
redrill of Lesedi 4 laterals, if justified by the results achieved at Lesedi
6, is then planned to commence and is expected to be completed in July/August
2023. Once both wells are complete, dewatering and gas flow testing can
commence. Initial dewatering is likely to take a minimum of 2-3 months, after
which initial indicative gas flow rates will be recorded. Gas flow testing is
planned to continue for 3-6 months.

The above dates are estimates, subject to the operational, geotechnical and
other risks set out in Sections 5.1(d), 5.1(f), 5.1(h) and 5.1(m) in
particular, as well as the other risks outlined in Section 5 of the
Prospectus.

2.4       Section 3.1

Section 3.1 is deleted and replaced with the following:

The purpose of the Offer is to raise up to $10,645,473 (excluding costs of the
Offer).

The funds raised from the Offer (if fully subscribed) along with existing cash
as at 31 March 2023 and the A$2m loan received from ILC Investments Pty Ltd
(as per the market announcement on 2 May 2023) are planned to be used in
accordance with the table set out below:

 Inflows                                            Offer fully subscribed A$m  Only the Underwritten amount is raised A$m
 Fully Subscribed Entitlement Offer                 10.65                       5.39
 Existing Cash at 31/03/2023                        3.54                        3.54
 ILC Loan received                                  2.00                        2.00
 Total                                              16.19                       10.93
 Allocation of Funds(1)
 Transmission line and substations                  7.17                        5.10
 Drilling and field operating costs(3)              3.75                        3.10
 Generation assets                                  1.30                        0.00
 Land purchases                                     0.68                        0.68
 Construction of operation and generation facility  0.64                        0.12
 Working capital                                    2.33                        1.61
 Costs of the Offer (2)                             0.32                        0.32
 TOTAL                                              16.19                       10.93

Notes:

1.     The above table is a statement of current intentions as of the date
of this Prospectus. As with any budget, intervening events and new
circumstances have the potential to materially affect the manner in which the
funds are ultimately applied. The Board reserves the right to alter the way
funds are applied on this basis and otherwise having regard to their fiduciary
duties.

2.     Refer to Section 6.20 of this Prospectus for further details
relating to the estimated expenses of the Offer.

3.     This covers drilling of Lesedi 6 and the redrill of Lesedi 4 only,
along with costs to run the Lesedi field operations. Drilling of each such
dual lateral production pod costs approximately A$1.5m. Once flow rates have
been established after completion of the current drilling program, the number
of wells required to increase production from initial generation to 1MW, 2MW
and beyond, will be known.

If the Offer is fully subscribed, the Company will require further capital of
approximately A$5m to bring the project into production.

If only the minimum amount (being the underwritten amount and Director
commitments) is raised under the Offer, the Company will have sufficient funds
to cover planned development operations up to the end of September 2023, but
the Company will need to secure additional funding by Q4 2023.  If these
additional funds are not secured, the Company will postpone or cut back
expenditure where necessary, which is likely to delay connection to the grid
and first power generation.

2.5       Section 6.16

Section 6.16 is deleted and replaced with the following:

Reconciliation and the rights of Tlou

The Offer is a complex process, and in some instances, investors may believe
that they will own more Shares than they ultimately did as at the Record Date
or are otherwise entitled to more New Shares than initially offered to them.
This may result in a need for reconciliation. If reconciliation is required,
it is possible that Tlou may need to issue additional New Shares to ensure
that the relevant Shareholders receive their appropriate allocation of New
Shares.

3.         Applications

Personalised Entitlement and Acceptance Forms were despatched to Eligible
Shareholders in accordance with the timetable set out in the First
Supplementary Prospectus.  The Company has received approximately $139,000
from non-related party Applicants registered in Australia prior to the date of
this Second Supplementary Prospectus (Prior Applicants). The Company is
refunding Application Monies received from Prior Applicants.

4.         Consents

The Company confirms that as at the date of this Second Supplementary
Prospectus, each of the parties that have been named as having consented to
being named in the Prospectus have not withdrawn that consent.

5.         Authorisation

This Second Supplementary Prospectus is issued by the Company and its issue
has been authorised by a resolution of the Directors.

In accordance with section 720 of the Corporations Act, each Director has
consented to the lodgement of this Supplementary Prospectus with ASIC and has
not withdrawn that consent.

This Second Supplementary Prospectus is signed for and on behalf of the
Company by:

 

Mr. Martin McIver

Non-Executive Chairman

Dated: 12 June 2023

 

 

 

 

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