TIDMTLOU
RNS Number : 3076H
Tlou Energy Ltd
24 March 2020
24 March 2020
Tlou Energy Limited
("Tlou" or "the Company")
Response to Prevailing Financial Market Conditions
Tlou Energy Limited is an ASX, AIM and BSE listed company
focused on generating cleaner power in Botswana for supply into the
local and regional power markets.
Response to Prevailing Financial Market Conditions
The current state of the financial markets and the Covid-19
outbreak is challenging for a number of companies and Tlou is no
exception. It is difficult to predict just how long these difficult
conditions will last and therefore the Company considers it to be
commercially prudent to significantly reduce costs so that current
funds last longer and so that more time is available to conclude
ongoing commercial and project finance negotiations.
Consequently, Tlou will be implementing significant cost
reductions across the Company. This includes senior management:
Anthony Gilby (Managing Director) will reduce to 50% of his
currently contracted rate backdated to 1 January 2020 and then 25%
from 1 April 2020. Colm Cloonan (Finance Director), Gabaake Gabaake
(Executive Director) and Solomon Rowland (General Manager) will
reduce to 50% of their currently contracted rates backdated to 1
January 2020. Contracted rates are as per the Company's 2019 annual
report released on 27 August 2019. The unpaid amounts will not be
accrued nor payable by the Company at a later date.
Cost reductions will remain in place for the foreseeable future,
with further reductions possible if considered necessary at a later
date.
Lesedi 3 & 4 Production Pods
The Lesedi 3 and 4 production pods have been flowing gas for
many months with sustained gas flow rates having been achieved from
both pods.
Increased sustained gas flow rates are anticipated to take some
considerable time, based on the currently available data, unless
additional wells are drilled to facilitate the dewatering process.
A decision to drill additional wells is being considered but no
decision has yet been made.
In the coming weeks, the Company is intending to shut-in one or
possibly both of the production pods as sufficient data has now
been gathered indicating the presence of potentially commercial gas
in the coal seams. Shutting-in the wells reduces unnecessary
expenditure and stops flaring of gas that could otherwise be
converted to electricity and sold once the project has a Power
Purchase Agreement (PPA) in place and is connected to the grid.
Bringing the pods back on-line should not take too long given the
current understanding of the production process gleaned from the
comprehensive data base acquired.
The Company may continue to dewater Lesedi 4 (currently the most
promising of the two pods) by converting the gas currently flowing
into electricity using one of Tlou's existing gas-powered
generators and thus driving the pumping equipment. This could be
impacted by the availability of key personnel to visit the field
operations due to health and safety concerns and travel
restrictions as a result of Covid-19.
Tlou's Near Term Focus
The Company's near-term focus will be to bring the Interim (or
Temporary) PPA to fruition followed by the full PPA as well as
continue to seek project finance. The latter will be for grid
connection, to drill additional wells to assist the dewatering of
the field and flow more gas and for the addition of solar power to
the generation mix.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
For further information regarding this announcement please
contact:
Tlou Energy Limited +61 7 3012 9793
Tony Gilby, Managing Director
-----------------
Solomon Rowland, General Manager
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+44 (0)20 7383
Grant Thornton (Nominated Adviser) 5100
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Colin Aaronson, Harrison Clarke, Samantha Harrison,
Seamus Fricker
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+44 (0) 207 408
Shore Capital (Broker) 4090
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Jerry Keen, Toby Gibbs
-----------------
Company Information
Tlou Energy is focused on delivering Power solutions to Botswana
and southern Africa to alleviate some of the chronic power shortage
in the region. Tlou is currently developing projects using gas and
plans to combine this with solar power to provide a cleaner base
load power source.
Botswana has a significant energy shortage and generally relies
on imported power and diesel generation to fulfil its power
requirements. Tlou's Lesedi Power Project provides investors with
access to a compelling opportunity to displace expensive, carbon
intensive diesel and imported coal-fired electricity with a locally
cleaner and more environmentally friendly alternative.
In addition to plans for cleaner energy, the Company is also
committed to developing community projects in Botswana adding real
value to peoples' lives in a region with sparse services and where
few opportunities exist for the local population. This includes
work to assist communities to become self-sustaining, develop
business opportunities, improve access to education and create
opportunities for self-employment and wealth creation.
The Company is listed on the Australian Securities Exchange,
London's AIM market and the Botswana Stock Exchange and is led by
an experienced Board, management and advisory team.
The project is significantly de-risked. The Company produced its
first gas in 2014, has a Mining (or development) Licence valid to
2042 and 10 Prospecting (or exploration) Licences. The Company's
project acreage covers a vast area spanning approximately 9,300
Km(2) in total.
Tlou's 'Lesedi' and 'Mamba' projects already benefit from
significant independently certified 2P gas Reserves of 41 Billion
Cubic Feet (BCF). In addition, 3P gas Reserves of 427 BCF and
Contingent Gas Resources of 3,043 BCF provide significant
additional potential.
The Company is planning an initial scalable power project.
Following successful implementation of this first scalable project,
the Company looks forward to evaluating longer-term prospects for
the delivery of additional electricity to Botswana and to
neighbouring countries.
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. Tlou Energy Limited undertakes no obligation to
update any forward-looking statements.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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March 24, 2020 03:00 ET (07:00 GMT)
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