TIDMTLOU
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
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 Aug-42 Current
2017/18L
------- ------------------------------
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 Current quarter Year to date
flows (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
Other (provide details if
1.8 material) (26) 134
---------------- -------------
Net cash from / (used in)
1.9 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)
---------------- -------------
Net cash from / (used in)
2.6 investing activities (4,465) (8,239)
----------------- ----------------------------------- ---------------- -------------
3. Cash flows from financing
activities
Proceeds from issues of equity
securities (excluding convertible
3.1 debt securities) 565 565
3.2 Proceeds from issue of convertible
debt securities
3.3 Proceeds from exercise of
options
Transaction costs related
to issues of equity securities
3.4 or convertible debt securities (64) (64)
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)
---------------- -------------
Net cash from / (used in)
3.10 financing activities 3,501 3,501
----------------- ----------------------------------- ---------------- -------------
4. Net increase / (decrease)
in cash and cash equivalents
for the period
Cash and cash equivalents
4.1 at beginning of period 1,871 6,851
Net cash from / (used in)
operating activities (item
4.2 1.9 above) (488) (1,370)
Net cash from / (used in)
investing activities (item
4.3 2.6 above) (4,465) (8,239)
Net cash from / (used in)
financing activities (item
4.4 3.10 above) 3,501 3,501
Effect of movement in exchange
4.5 rates on cash held 312 (12)
---------------- -------------
Cash and cash equivalents
4.6 at end of period 730 730
----------------- ----------------------------------- ---------------- -------------
5. Reconciliation of cash and Current quarter Previous quarter
cash equivalents $A'000 $A'000
at the end of the quarter
(as shown in the consolidated
statement of cash flows) to
the related items in the accounts
5.1 Bank balances 730 1,871
5.2 Call deposits
5.3 Bank overdrafts
5.4 Other (provide details)
---------------- -----------------
Cash and cash equivalents
at end of quarter (should
5.5 equal item 4.6 above) 730 1,871
----------------- ------------------------------------ ---------------- -----------------
6. Payments to related parties of the entity Current quarter
and their associates $A'000
Aggregate amount of payments to related
parties and their associates included in
6.1 item 1 109
----------------
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 drawn
Note: the term "facility' amount at quarter at quarter end
includes all forms of financing end $A'000
arrangements available to $A'000
the entity. 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 $A'000
activities
Net cash from / (used in) operating activities
8.1 (item 1.9) 488
8.2 (Payments for exploration & evaluation classified 4,339
as investing activities) (item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 4,827
8.2)
8.4 Cash and cash equivalents at quarter end 730
(item 4.6)
8.5 Unused finance facilities available at quarter -
end (item 7.5)
--------
8.6 Total available funding (item 8.4 + item 730
8.5)
--------
Estimated quarters of funding available
8.7 (item 8.6 divided by item 8.3) 0.2
--------
Note: if the entity has reported positive relevant outgoings
(ie a net cash inflow) in item 8.3, answer item 8.7 as
"N/A". Otherwise, a figure for the estimated quarters
of funding available must be included in item 8.7.
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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END
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