REG - Tlou Energy Ltd - Quarterly Activities Report q/e 31 December 2023
24/01/2024 07:15
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RNS Number : 6840A Tlou Energy Ltd 24 January 2024
24 January 2024
Tlou Energy Limited
("Tlou" or "the Company")
Quarterly Activities Report for the quarter ended 31 December 2023
Highlights
Ø First gas flared from the Lesedi 6 production pod
Ø Lesedi 4 pod is dewatering in line with expectations
Ø The 66kV overhead transmission line is effectively complete
Ø Electrical substations are approximately 37% complete
Activities
Tlou Energy has three project areas referred to as the:
§ Lesedi Project - focused on gas-to-power development as well as exploration
and evaluation.
§ Mamba Project - focused on exploration and evaluation.
§ Boomslang Project - focused on exploration and evaluation.
Lesedi Project
The Lesedi project is Tlou's most advanced. At Lesedi the Company is
developing a proposed 10MW gas-to-power project.
Gas to Power Project
The first electricity to be generated at Lesedi is planned to go towards
satisfying the 10MW Power Purchase Agreement (PPA) with Botswana Power
Corporation (BPC) the national power utility. The Lesedi project currently has
several components of the development process underway including the
construction of transmission lines, substations, a field operations facility
and generation site as well as production wells.
Transmission Line Construction
The Lesedi project is approximately 100km from the nearest BPC substation
connection in Serowe. To connect to the national grid, the Company is
undertaking the construction and installation of a 100km 66kV transmission
line. This, together with associated infrastructure and gas production wells
should enable the Company to connect and provide electricity into Botswana's
power network.
Construction of the 66kV transmission line has been effectively completed by
the contractor Zismo Engineering Pty Ltd (Zismo). Final works including site
clean-up and dismantling of equipment is underway. We are extremely grateful
to Zismo for their quality of work, professionalism and expertise.
The line will remain under Zismo's care and maintenance until it is taken over
upon energisation which is expected around mid-2024.
Substation Construction
The planned substation at Lesedi was designed for an initial 5MW of power,
however the Company is working on options that may allow the substation design
to be adapted to facilitate expansion beyond 10MW.
A new substation is required at the Lesedi end of the transmission line
whereas at the opposite end, it will tie into the existing BPC substation at
Serowe. Including the additional work required to expand capacity beyond 10MW,
the substations are approximately 37% complete. It is currently anticipated
that the project will be completed around mid-2024.
Gas production
The Company has two gas production pods, Lesedi 4 and Lesedi 6 currently
flaring gas. During the quarter Lesedi 6 experienced a rapid increase in
casing pressure in both lateral wells with first gas production to surface
occurring soon thereafter.
The rapid build-up of casing pressure and production of first gas to surface
in a relatively short time was very encouraging. This was the fastest gas to
surface in the Lesedi field to date. Following the initial gas production, the
aim is allow the gas flow to develop and obtain a sustained flow rate.
Dewatering at the Lesedi 4 pod also continued during the period with gas now
flowing to surface as well. It was expected that dewatering of Lesedi 4 would
be longer than Lesedi 6 due to the well design. The Company will continue
production testing at both Lesedi 4 and Lesedi 6 and update the market in due
course. A short video of the Lesedi 6 gas flare is available on the following
link: https://youtube.com/shorts/jzOjrA-xCrE
(https://youtube.com/shorts/jzOjrA-xCrE)
Lesedi project licences
The project area has four Prospecting Licenses (PL) and a Production Licence
which is the focus area for the development of Tlou's independently certified
gas reserves and contingent resources. The table below summarises the status
of the Lesedi licences:
Licence Expiry Status
Production Licence 2017/18L Aug-42 Current
PL001/2004 TBA Awaiting renewal confirmation
PL003/2004 TBA Awaiting renewal confirmation
PL035/2000 Mar-25 Current
PL037/2000 Mar-25 Current
PL renewal applications are submitted three months prior to expiration.
Renewal applications were submitted for PL001/2004 and PL003/2004 in June 2023
and the Company is awaiting confirmation of renewal. The Company has been
informed that there have been delays to renewals as the process is moving to
an online system.
****
Mamba Project
The Mamba project is in the exploration and evaluation phase with further
operations required on the licences. It consists of five Prospecting Licences
covering an area of approximately 4,500 Km(2). The Mamba area is situated
adjacent to Lesedi. In the event of successful drilling results at Mamba, it
is envisioned that this area would be developed as a separate project from
Lesedi. The Mamba area provides the Company with flexibility and optionality.
The status of the Mamba licences is as follows:
Licence Expiry Status
PL 237/2014 Dec 2025 Current
PL 238/2014 Dec 2025 Current
PL 239/2014 Dec 2025 Current
PL 240/2014 Dec 2025 Current
PL 241/2014 TBA Awaiting renewal confirmation
PL renewal applications are submitted three months prior to expiration. A
renewal application for PL 241/2014 was submitted in June 2023 and the Company
is awaiting confirmation of renewal. Further work on the Mamba project is
proposed once the Lesedi project is in production. The next stage of
operations is likely to include a seismic survey and the drilling of
core-holes.
****
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. Like
the Mamba project the first stage of operations is likely to include a seismic
survey following by core-hole drilling.
The status of the Boomslang licence is as follows:
Licence Expiry Status
PL 011/2019 June 2024 Current
PL renewal applications are submitted three months prior to expiration.
****
Cash Position
At the end of the quarter the Company had ~A$0.73m cash on hand (unaudited).
The aggregate value of payments to related parties and their associates of
A$109k for the quarter (shown in item 6.1 of the Quarterly Cashflow Report)
relates to directors' salaries and fees (including tax and superannuation
payments made on their behalf) and office rent. The Company will need to raise
sufficient funds early in 2024, from the ongoing Entitlement Offer and the
Excess Application Facility and any subsequent placement (as announcement on
15 December 2023) to support ongoing and planned operations as set out in item
8.8 of the Quarterly Cashflow Report.
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
Zeus Capital (UK Broker) +44 (0)20 3829 5000
Simon Johnson
Investor Relations
Ashley Seller (Australia) +61 418 556 875
FlowComms Ltd - Sasha Sethi (UK) +44 (0) 7891 677 441
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.
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 31 December 2023
Consolidated statement of cash flows Current quarter Year to date (6 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
(c) production
(d) staff costs (205) (551)
(e) administration and corporate costs (260) (964)
1.3 Dividends received (see note 3)
1.4 Interest received 2 11
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) (26) 134
1.9 Net cash from / (used in) operating activities (488) (1,370)
2. Cash flows from investing activities
2.1 Payments to acquire or for:
(a) entities
(b) tenements
(c) property, plant and equipment (127) (127)
(d) exploration & evaluation (4,339) (8,112)
(e) investments
(f) other non-current assets
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 (4,465) (8,239)
3. Cash flows from financing activities 565 565
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 (64) (64)
securities
3.5 Proceeds from borrowings 3,000 3,000
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)
3.10 Net cash from / (used in) financing activities 3,501 3,501
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 1,871 6,851
4.2 Net cash from / (used in) operating activities (item 1.9 above) (488) (1,370)
4.3 Net cash from / (used in) investing activities (item 2.6 above) (4,465) (8,239)
4.4 Net cash from / (used in) financing activities (item 3.10 above) 3,501 3,501
4.5 Effect of movement in exchange rates on cash held 312 (12)
4.6 Cash and cash equivalents at end of period 730 730
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 730 1,871
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) 730 1,871
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 109
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) 488
8.2 (Payments for exploration & evaluation classified as investing activities) 4,339
(item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 8.2) 4,827
8.4 Cash and cash equivalents at quarter end (item 4.6) 730
8.5 Unused finance facilities available at quarter end (item 7.5) -
8.6 Total available funding (item 8.4 + item 8.5) 730
8.7 Estimated quarters of funding available (item 8.6 divided by item 8.3) 0.2
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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: The net operating cash flow can fluctuate depending on the level of
operations in a specific quarter. Is it expected that the coming quarter will
be similar to the level of net operating cash flows in this reporting period.
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: On 15 December 2023 the company launched an entitlement offer to
existing shareholders to raise up to $13.3 million. The offer closes on 31
January 2024. Any entitlements not taken up under the offer can be placed with
new investors during the three months following close of the entitlement
offer. While indications of participation and discussions with potential
investors to participate in any placement have been positive, the company
cannot guarantee that sufficient capital will be raised from the entitlement
offer or that negotiations with investors will result in a successful outcome.
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: Yes, the company expects to be able to continue operations and meet
business objectives should sufficient funds be received from the ongoing
entitlement offer. To ensure that all planned operations are conducted as
outlined in the Entitlement offer booklet all funds under the offer would need
to be raised. Otherwise the company may have to delay or postpone planned
operations until sufficient capital is available.
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:
.....24/01/2024...............................................................
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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