Tlou Energy is focused on delivering power in Botswana and southern Africa through the exploration and development of gas, solar and hydrogen.

Hydrogen

Tlou is developing a hydrogen strategy to complement the Company's gas-to-power project.

The hydrogen economy is rapidly developing and could open multiple additional business opportunities such as solid carbon products, oxygen, ammonia for energy storage, fuel cell electric vehicles (FCEV), agricultural and medical applications.

Tlou is well-positioned to produce hydrogen from different methods. The Company has large and proven resources to develop these products. Methane for carbon and hydrogen, readily available water for hydrogen and oxygen, and virtually unlimited CBM / solar power to drive the process.

A hydrogen strategy would benefit from Tlou's extensive approvals secured to date, including environmental, gas and solar generation licences, access to land and established in-country operational expertise.

Project Finance and Power Purchase Agreement (PPA)

Tlou is in ongoing discussions with a number of parties in relation to a $10m project finance package for the initial phase of the Lesedi gas-to-power project which includes construction of transmission lines and sub-stations.

Two of these parties are currently working through their internal approval processes and have not expressed a specific need to conclude the 10MW PPA in order to progress. Others have indicated a preference for the 10MW PPA to be concluded prior to moving forward. Tlou is not in a position to influence these third-party internal processes and therefore cannot estimate how long this may take.

Once a project finance package is in place and it is commercially prudent, significant work on the transmission lines and sub-station can be conducted.

On the 10 MW PPA, confidential negotiations are continuing and progress is being made. A market update will be provided in due course.

Forward plan

The primary focus for the Company is to progress the Lesedi gas-to-power project. Development of hydrogen is planned to run in tandem and with time could develop into a lucrative opportunity for the Company given the availability of Tlou's gas and solar power.

BOTSWANA OPERATIONS OVERVIEW

Tlou’s principal assets are in Botswana where it has the one of the most advanced CBM projects in southern Africa. Tlou’s 100% owned Lesedi CBM project has an independently certified contingent resource of up to 3.2 trillion cubic feet (3C) with a further prospective resource totalling 8.6 trillion cubic feet (High Estimate). Tlou is the first company in Botswana to have certified CBM gas reserves.

Botswana and other southern African countries are currently experiencing electricity supply deficits. Tlou believes the electricity market represents an attractive commercialisation path for the Company’s CBM.

The Company holds 10 Prospecting Licences covering an area of ~8,300Km² and the Lesedi Project already benefits from significant, independently certified Contingent Gas Resources of ~3.2 trillion cubic feet (3C) and independently certified Gas Reserves.

Botswana’s Department of Environmental Affairs has approved the Environmental Impact Statement (‘EIS’) submitted by the Company in December 2015 for Lesedi. The EIS was a prerequisite for the Mining Licence which was granted in 2017. Environmentally, there is a need in Botswana for the development of a relatively clean, low carbon energy source to replace the use of coal and diesel in the production of electricity.

Tlou received a request for proposal (‘RFP’) from the Botswanan Government to provide up to 100MW of CBM power from its Lesedi project.

Project areas

The Company has three project areas in Botswana:

• Lesedi Project - Development, Exploration
• Mamba Project - Exploration
• Boomslang Project - Exploration

Lesedi CBM Project Area

Licences: Mining Licence 2017/18L, Prospecting Licences 001 & 003/2004 and 35 & 37/2000
Ownership: Tlou Energy Limited 100%

The Lesedi project covers an area of approximately 3,800 Km² and consists of four Coal and CBM Prospecting Licences (PL) and a Mining Licence. The Mining Licence area is currently the focal point for the Company's operations and includes the Lesedi 3 and 4 production wells or 'pods'. 

The Lesedi project is the Company's most advanced project, with plans in place to install gas-fired electricity generators and connect to the power grid in Botswana. The project has full environmental approval which includes gas extraction, electricity generation and construction of transmission lines.  In addition, the Company has approval for 20MW of solar generation.  CBM power is ideal for use in conjunction with solar projects.

Tlou has the only CBM Mining Licence in Botswana. A mining licence is required by an operator to develop a CBM asset.  This licence spans a large 900 Km² area and is valid until 2042 so the Company has security of tenure over the project. 

Tlou has the only independently certified CBM gas reserves in Botswana, with 252 Billion Cubic Feet (BCF) of 3P gas Reserves certified in the Lesedi project area. In addition, the 3C Contingent Gas Resources are approximately 3 Trillion Cubic Feet (TCF). The potential upside from further successful development of this area is substantial.

Mamba Project Area, Botswana

Licences: Prospecting Licences 237-241/2014
Ownership: Tlou Energy Limited 100%

The Mamba project consists of five Coal and CBM PL's covering an area of approximately 4,500 Km².  The Mamba area is considered to be highly prospective being situated adjacent to Tlou's Lesedi project and being on-trend with the asset that has produced the encouraging results observed to date. In the event of a gas field development by Tlou, the Mamba area provides the Company with considerable flexibility and optionality. Geographically, the Mamba project area is approximately 50 Km closer to the Orapa Power station than the Lesedi project area.

Independently certified 3P Gas Reserves of 175 BCF are already in place at the Mamba project. Further core-hole drilling and a proposed seismic survey of the area could significantly expand the reserves footprint across the Mamba project area. 

The Mamba area has the potential to become a separate revenue generating development project in addition to the proposed development at Lesedi.

Boomslang Project Area, Botswana

Licence: Prospecting Licence 011/2019
Ownership: Tlou Energy Limited 100%

The Company's most recently acquired Prospecting Licence, PL011/2019 designated "Boomslang", is valid for an initial term of 3 years. The licence area is approximately 1,000 Km² and is situated adjacent to the Company's existing licences. The Boomslang area is also located on-trend with the asset that has produced the encouraging results observed to date at the Lesedi project and considered to be highly prospective. 

The Boomslang licence area provides the Company further flexibility and optionality for development of different projects.