TIDMTLOU
RNS Number : 3090M
Tlou Energy Ltd
12 October 2016
12 October 2016
Tlou Energy Limited
("Tlou" or "the Company")
Tlou achieves initial independent gas reserve certification
Ø Lesedi CBM Project achieves initial independent gas reserve
certification
Ø First certified gas reserves in Botswana
Ø Independent reserve certifier has indicated Lesedi CBM Project
is capable of economic development
Tlou Energy Limited, the AIM and ASX listed company focused on
delivering power in Botswana and southern Africa through the
development of coal bed methane ("CBM") is pleased to announce that
it has received an initial Independent Reserve Certification from
SRK Consulting (Australasia) Pty Ltd ("SRK") for the Lesedi CBM
Project ("Lesedi") located in prospecting licence PL002/2004 in
Botswana.
Commenting on the announcement, Executive Director Gabaake
Gabaake said "I am absolutely delighted with this news; it is a
very significant achievement for Tlou. Initial reserve
certification is a major milestone and demonstrates the
commerciality of the Lesedi CBM Project. As the first in Botswana
to attain independently certified CBM reserves we are in a very
strong position to progress the project further for the benefit of
our shareholders and to bring a much needed and clean source of
power to the people of Botswana.
"Our plan is to now continue to build reserves and upgrade the
category of these reserves as further production data from Lesedi
is collected. The initial reserves assessment is based on the
production data obtained to date from the three pilot production
wells in the Selemo Pilot and extrapolating this production data
over a potential field development at Selemo to support a 50MW
power generation project.
"It is also pleasing to note that SRK has indicated in their
independent reserves report that the produced gas from the Selemo
Pilot is capable of supporting an economic development for the
Lesedi Project.
"It has been a very important and successful period for the
Company over the past few months, with funding secured through the
recent placement, our Environmental Impact Statement approved and
now independently certified reserves booked. These are significant
steps in our aim to become a mid-tier gas to power producer in
southern Africa and I look forward to updating the market further
as we build upon this success."
In accordance with the Society of Petroleum Engineers ("SPE")
2007 Petroleum Resource Management System ("PRMS") Guidelines as
well as the 2011 Guidelines for Application of the PRMS approved by
the SPE, SRK have attributed Gas Reserves to Tlou's 100% interest
in Lesedi using the deterministic method of petroleum reserves
estimation as at 26 September 2016 as set out in Table 1 below (in
billion cubic feet (BCF)).
Table 1: Lesedi Independent Gas Reserves Certification (Lower
Morupule seam only) and Contingent Gas Resources Certification (all
coal seams) - BCF
Tlou Interest Gas Reserves (BCF) (1) Contingent Gas Resources
(100%) (BCF) (2)
--------------------- --------------------------- -----------------------------
Category 1P 2P 3P 1C 2C 3C
--------------------- -------- ------- -------- ---------- ------ ---------
26 September
2016
certification
by SRK 0.1 2.7 52.9 4.8 236 3,243
--------------------- -------- ------- -------- ---------- ------ ---------
31 March 2015
certification
by SRK - - - 4.9 239 3,296
--------------------- -------- ------- -------- ---------- ------ ---------
Increase/(decrease) 0.1 2.7 52.9 (0.1) (3) (53)
--------------------- -------- ------- -------- ---------- ------ ---------
The change in Contingent Gas Resources is due to their partial
conversion to Reserves and pilot gas production. SRK have also
reported the Gas Reserves in Petajoules (PJ), as shown in Table 2
below.
Table 2: Lesedi Independent Gas Reserves Certification (Lower
Morupule seam only) - BCF and PJ
Tlou Interest Gas Reserves (BCF) (1) Gas Reserves (PJ) (1,
(100%) 3)
---------------- --------------------------- --------------------------
Category 1P (2) 2P 3P 1P 2P 3P
---------------- ----------- ----- ------- ------- ------- --------
26 September
2016
certification
by SRK 0.1 2.7 52.9 0.1 2.1 42.2
---------------- ----------- ----- ------- ------- ------- --------
Notes to Tables 1 and 2 above:
Gas Reserve numbers have been rounded to the nearest tenth. Gas
Resource numbers have been rounded to the nearest tenth for amounts
less than 100 BCF, otherwise to the nearest whole number. Refer to
Competent Persons Statement in Appendix 2 of this Announcement.
1) Tlou's Gas Reserves have not been adjusted for fuel or
shrinkage and have been calculated at the wellhead (which is the
reference point for the purposes of Listing Rule 5.26.5) for the
Lower Morupule seam only.
2) Contingent Gas Resources are (100%) Unrisked Gross and are
derived from the SRK certification at 31 March 2015 for all coal
seams (as previously announced by Tlou on 9 April 2015) with
adjustment by Tlou for the gas volumes which have now been
certified by SRK in the Gas Reserves category for the Lower
Morupule seam.
3) The energy content of the gas was determined by SRK as 0.8 PJ
per BCF for the Lower Morupule coal seam based on corehole gas
composition in the Selemo pilot area.
SRK has consented to the information in this announcement being
released.
Additional information in relation to the Gas Reserve estimates
for PL002/2004 (Lesedi CBM Project), which is the subject of this
announcement, and required to be disclosed pursuant to Chapter 5 of
the ASX Listing Rules, is set out in Appendix 1 of this
announcement.
The Lesedi Reserves Statement received from SRK represents an
initial independent certification that is based on geological,
drilling and production data obtained from Lesedi to date and
relates only to the Lower Morupule coal seam.
The assessment of Proven (1P) Reserves was provided in the area
of the Selemo Pilot only, whereas the assessment of Probable and
Possible (2P and 3P) Reserves relates to a wider area identified by
SRK as the Lower Morupule Gas Fairway which is proposed to be
developed by Tlou to support the development of a 50MW power
generation project.
An updated Gas Reserve and Resource statement for all of Tlou's
tenements is shown in Table 3 below, in accordance with ASX Listing
Rule 5.25.3.
Table 3: Tlou Net Gas Reserves and Resources for all tenements
and seams - BCF
Tlou 100% interest
-----------------------------------------------------------------------------------------------------
Location Project Tlou Gas Reserves Gas Contingent Gas Prospective
Interest (BCF) (1) Resource (BCF) Resource
(2) (BCF)
(3)
----------- ----------------- ---------- ----------------- -------------------- ----------------
1P 2P 3P 1C 2C 3C
----------------------------- ---------- ---- ---- ----- ----- ----- ------ ----------------
Lesedi
Karoo CBM (Lower
Basin Morupule
Botswana coal) 100% 0.1 2.7 52.9 4.8 68.2 530 -
(PL002/2004)
----------------------------- ---------- ---- ---- ----- ----- ----- ------ ----------------
Lesedi
CBM (all
Karoo coal seams)
Basin (PL001/2004,
Botswana PL002/2004)(4) 100% 0.1 2.7 52.9 4.8 236 3,243 -
----------- ----------------- ---------- ---- ---- ----- ----- ----- ------ ----------------
Karoo PL003/2004,
Basin PL035/2000, 8,596
Botswana PL037/2000 100% - - - - - - (5)
----------- ----------------- ---------- ---- ---- ----- ----- ----- ------ ----------------
Notes to Table 3 above:
Gas Reserve numbers have been rounded to the nearest tenth. Gas
Resource numbers have been rounded to the nearest tenth for amounts
less than 100 BCF, otherwise to the nearest whole number. Refer to
Competent Persons Statement in Appendix 2 of this Announcement.
1) Tlou's Gas Reserves have not been adjusted for fuel or
shrinkage and have been calculated at the wellhead (which is the
reference point for the purposes of Listing Rule 5.26.5).
2) Contingent Gas Resources are (100%) Unrisked Gross and are
derived from the SRK certification at 31 March 2015 for all coal
seams (as previously announced by Tlou on 9 April 2015) with
adjustment for the gas volumes which have now been certified by SRK
in the Gas Reserves category.
3) ASX Listing Rule 5.28.2 Statement relating to Prospective
Resources:
The estimated quantities of petroleum that may potentially be
recovered by the application of a future development project(s)
relate to undiscovered accumulations. These estimates have both an
associated risk of discovery and a risk of development. Further
exploration appraisal and evaluation is required to determine the
existence of a significant quantity of potentially moveable
hydrocarbons.
4) The Gas Reserves and Contingent Gas Resources for all coal
seams in PL001/2004 and PL002/2004 shown in the second row of Table
3 includes the numbers for the Lower Morupule coal seam which are
shown in the first row of Table 3.
5) Prospective Gas Resources are (100%) Unrisked Gross and are
derived from a report to Tlou from Netherland, Sewell and
Associates Inc (NSAI) dated 16th February 2012 regarding
certification for all coal seams located in the remaining
prospecting licences (as previously announced by Tlou in its
prospectus dated 20 February 2013).
Overview of SRK
SRK is an independent, international group providing specialised
consultancy services, with expertise in petroleum studies and
petroleum related projects. In Australia SRK have offices in
Brisbane, Melbourne, Newcastle, Perth and Sydney. SRK has completed
reserves and resource assessments for a number of clients in
Australia.
A full version of this announcement is available on the
Company's website - http://tlouenergy.com/
For further information regarding this announcement please
contact:
Tlou Energy Limited +61 7 3012 9793
------------------------------------------- ----------------------
Gabaake Gabaake, Acting Managing Director
------------------------------------------- ----------------------
Solomon Rowland, Company Secretary
------------------------------------------- ----------------------
Grant Thornton (Nominated Adviser) +44 (0)20 7383 5100
------------------------------------------- ----------------------
Jen Clarke, Colin Aaronson, Harrison
Clarke
------------------------------------------- ----------------------
Brandon Hill Capital (Financial Adviser
and Joint broker) +44 (0)20 3463 5016
------------------------------------------- ----------------------
Jonathan Evans, Alex Walker
------------------------------------------- ----------------------
Optiva Securities Limited (Joint broker) +44 (0)20 3137 1904
------------------------------------------- ----------------------
Jeremy King, Christian Dennis
------------------------------------------- ----------------------
St Brides Partners Limited (Public
relations)
------------------------------------------- ----------------------
Elisabeth Cowell, Lottie Brocklehurst +44 (0) 20 7236 1177
------------------------------------------- ----------------------
APPIX 1 - ADDITIONAL INFORMATION REQUIRED UNDER CHAPTER 5 OF THE
LISTING RULES
Description of Land Area, Tenure and Economic Interest LR
5.25.5, 5.31.3 & 5.31.7
Tlou has a 100% interest in and operates ten prospective coalbed
methane (CBM) licences in Botswana. The licence PL002/2004 forms
part of the Lesedi Project area. PL002/2004 is located in the
Karoo-Kalahari Basin, Botswana, which contains a significant
proportion of Southern Africa's coal deposits. The most recent work
in PL002/2004 has consisted of horizontal pilot well drilling in an
area known as the Selemo pilot area.
PL002/2004 was most recently renewed for a further 2-year term
on 1 April 2015. The next renewal date for the permit is due 31
March 2017 unless the licence area is converted to a Mining Lease
(ML) prior to this date.
The Gas Reserves reported in this announcement have been
calculated net of a Government royalty of 3% of wellhead revenue
and a royalty payable to the previous owner Sekaname Pty Ltd of
ZAR2.00 per 1,000 standard cubic feet (SCF) produced at the
wellhead or 12.5% of the wellhead selling price of the gas produced
(less certain transport and logistical costs), whichever is
greater.
Overview of Operatorship of Production LR 5.31.2
Tlou has operated all assets on PL002/2004 since 2009.
Lesedi Gas Project LR 5.31.4 and Previous Lesedi Gas Project
Contingent Resource Upgrade LR 5.34
A large range of technical data has been obtained over the wider
Lesedi project area, particularly in the PL002/2004 Block, in order
to understand the commercial nature of this resource. Core
laboratory analysis, with wireline log analysis has been undertaken
with a range of both short and long term flow testing methods which
include drill stem tests (DST), wireline conveyed flow testing
tools (MDT) and wells, completed with progressive cavity pumps, put
on long term pilot testing to achieve both water and gas flow rate
measurements while a reservoir pressure drop around the general
area of the pilot wells is being achieved.
The reserves certification report has been prepared by SRK
utilising a deterministic estimation method. New technical data
from the Selemo pilot program secured since the Contingent
Resources upgrade by SRK in March 2015 has resulted in the initial
Gas Reserves (refer Table 1) certified by SRK for the Lesedi CBM
Project.
Due to the large amount of technical data, the performance of
the initial Selemo pilot program, and the relatively close
proximity of Lesedi to the Botswanan electricity network, SRK is of
the opinion that 1P, 2P and 3P Reserves volumes are justified and
warranted.
Estimated Quantities (in aggregate) to be recovered LR
5.31.5
The existing wells and facilities at PL001/2004 and PL002/2004
are designed for evaluation purposes only (and include flaring of
gas) and are not sufficient to allow for the recovery of any
significant or commercial amount of reported petroleum reserves.
Only through the completion of the field development is it expected
that reported 2P and 3P reserves will be recovered.
Statement in relation to Undeveloped Petroleum Reserves LR
5.31.6
The Lesedi CBM Project continues in the appraisal phase with
three working pilots in the Selemo area situated in the southern
part of the block. It is likely that further wells will be required
to continue to obtain data on coal parameters, in particular in the
northern and more eastern parts of the block, before a development
decision can be made. Therefore at this point, it is not possible
to detail when development is anticipated. It is likely that
further conversion of Contingent Resources to 2P and 3P Reserves,
and migration of 3P Reserves to 2P Reserves will be required before
a development decision will be finalised.
The Lesedi reserves and resource volumes presented in this
report reflect an update to the prior resource estimates released
by Tlou in April 2015. The resources estimated in that April 2015
report were 4.9 BCF 1C contingent resources, 239.1 BCF 2C
contingent resources, and 3,295.5 BCF 3C contingent resources.
These contingent resources figures represent the contingent
resources potentially recoverable from the combined Serowe,
Morupule and Kamotaka coal formations. The addition of 1P, 2P and
3P Reserves in this announcement were justified based on new pilot
production data collected and measured since the April 2015
Resources estimate and relate to the Lower Morupule Coal Formation
only.
In November 2015 Botswana's Government Ministry of Minerals,
Energy and Water Resources issued a request to submit technical
information for the supply of emergency power to address the
country's chronic power deficiency and to assist fast tracking the
development of the gas industry in the country. The initial
proposal submitted by Tlou Energy was for a 10MW gas-to-power pilot
project. As announced on the ASX and AIM markets on 5 July 2016,
Tlou received confirmation from the Botswana Public Procurement and
Asset Disposal Board ('PPADB") that it had been selected to tender
for and develop a CBM power plant of up to 50MW at the Lesedi CBM
Project. The application process involved approval by Botswana's
Government Cabinet, following which it was reviewed by the PPADB.
The next step is for the Company to finalise work on a detailed
proposal for the supply of CBM power in modular stages, including
negotiations with various third parties on the terms of an off-take
agreement, network access and project funding.
The Lesedi CBM Project currently has no gas transportation
infrastructure in place. Third party infrastructure (owned by the
Botswana Government) exists approximately 70km to the east of the
Lesedi Project (see Appendix 3 below). Depending on the scale of
any Lesedi development, this infrastructure may not be sufficient,
for Lesedi, and additional infrastructure may be required and would
be considered under any Lesedi development plan.
As announced by Tlou on the ASX and AIM markets on 29 September
2016, Botswana's Department of Environmental Affairs ("DEA") has
approved the Environmental Impact Statement ("EIS") submitted by
the Company in December 2015 for its Lesedi CBM Project. The DEA
considers that the EIS adequately addressed the relevant impacts
associated with the proposed development at the Lesedi Project.
Material Economic Assumptions LR 5.31.1
The material economic assumptions used by SRK to calculate the
estimates of Gas Reserves for the Lesedi CBM Project referred to in
this announcement are as follows:
-- Production data derived from the currently producing Selemo Wells (Selemo 1P, 1AR, 4P);
-- The initial development plan for the proposed 50MW power generation project;
-- A number of wells drilled by Tlou within the area increasing
the confidence in the continuity and consistency of net coal within
the area;
-- Development well spacing is assumed to be 150 metres;
-- Capital expenditure per well has been derived from the most
recent drilling and completion campaign of the Selemo area with
some savings assumed for a larger, longer term production drilling
campaign and estimates for downstream capital such as power plants
and transmission lines;
-- Economic considerations in confirming commerciality of the
relevant reserves include deducting from estimated revenues the
estimated operating costs, royalties and taxes, and future capital
expenditure investment; and
-- Net gas pricing assumptions used to estimate Tlou's share of
future revenues have been derived from the current and longer term
energy pricing market in the region.
APPENDIX 2 - Competent Person Statement and ASX Listing Rules
Chapter 5 - Reporting on Oil and Gas Activities
The estimate of Reserves and Contingent Resources for
PL002/2004, as part of the Lesedi CBM Project provided in this
announcement, (refer certification in Table 1 and Table 2) is based
on, and fairly represents, information and supporting documentation
determined by Dr Bruce Alan McConachie of SRK Consultants
(Australasia) Pty Ltd in accordance with Petroleum Resource
Management System guidelines. Dr McConachie is a full-time employee
of SRK, and is a qualified person as defined under the ASX Listing
Rule 5.42. Dr McConachie is a member of the American Association of
Petroleum Geologists, as well as being a member of The Society of
Petroleum Engineers. Dr McConachie has consented to the publication
of the Reserve and Contingent Resource estimates for Lesedi in the
form and context in which they appear in this announcement.
The contingent gas resource estimates for PL001/2004,
PL002/2004, PL003/2004, PL035/2000 and PL037/2000 provided in this
statement were originally released to the Market in the Company's
announcement of 9 April 2015, and were estimated using the
deterministic method with the estimate of contingent resources for
PL001/2004 and PL002/2004 not having been adjusted for commercial
risk.
Tlou confirms that it is not aware of any new information or
data that materially affects the information included in the two
announcements referred to above and that all of the material
assumptions and technical parameters underpinning the estimates in
the announcements continue to apply and have not materially
changed.
APPENDIX 3 - LESEDI CBM PROJECT PERMITS AND SURROUNDING POWER
INFRASTRUCTURE
Company Information
Tlou Energy is an AIM and ASX listed company focused on
delivering power in Botswana through the development of coal bed
methane ('CBM') projects. Botswana has a severe energy shortage and
is currently relying on expensive imported power and diesel
generation to deliver its requirements. However, as the 100% owners
of the most advanced gas project in the country, the Lesedi CBM
Project ('Lesedi'), Tlou Energy provides investors with access to a
compelling immediate and longer term opportunity using domestic gas
to produce power and displace the expensive diesel and import
market.
The Company is led by an experienced Board, management and
advisory team including individuals with successful track records
in the Australian CBM industry.
Since establishment in 2009 the Company has significantly
de-risked the project in consideration of its goal to become a
significant gas to power producer. The Company has the most
advanced CBM project in Botswana with gas flaring at its Selemo
wells. It holds 10 prospecting licences covering an area of
8,300Km(2) and the Lesedi project already benefits from
significant, independently certified contingent gas resources of
3.3 trillion cubic feet (TCF) (3C) as well as an initial
independent gas reserve certification.
The first planned gas-to-power solution is expected to be
delivered through a scalable project with the Botswana Government.
Following successful implementation of this project the Company
plans larger projects to provide further power to Botswana and the
southern African region.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCMTBATMBBBMIF
(END) Dow Jones Newswires
October 12, 2016 02:24 ET (06:24 GMT)
Tlou Energy (LSE:TLOU)
Historical Stock Chart
From Mar 2024 to Apr 2024
Tlou Energy (LSE:TLOU)
Historical Stock Chart
From Apr 2023 to Apr 2024