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Tlou Energy finds gains as it restarts lateral drilling in coal bed methane wells

"Thus far, drilling operations at the Lesedi CBM Project have been progressing according to plan," said CEO Tony Gilby
oil and gas operations
Lateral drill crews are on site

Tlou Energy Ltd (LON:TLOU) shares rose on Tuesday as it told investors that lateral drilling has restarted in the wells at the Lesedi coal bed methane project in Botswana.

The company, in a statement, said that specialist directional drilling crew and other key personnel are now on site.

READ: Tlou Energy's Tony Gilby updates on Lesedi project

Once lateral drilling is complete, the company expects the Lesedi 3 and Lesedi 4 production pods will be completed.

It is planned that surface production equipment will be installed after that. Dewatering and production operations can then follow.

Tlou highlighted that success flowing gas from Lesedi 3 and Lesedi 4 would have the potential to upgrade reserves.

"Thus far, drilling operations at the Lesedi CBM Project have been progressing according to plan. Following the Christmas break, our field team has re-mobilised and has now recommenced drilling activity to complete the production pods at Lesedi from which we intend to produce gas to potentially supply the initial stages of our proposed CBM gas-to-power project,” said Tony Gilby, Tlou managing director.

“We look forward to providing investors with further updates in relation to operational progress specifically, the successful completion of the production pods and commencement of production testing activities.”

Tlou noted that it recently submitted as a response to a Request for Proposal (RFP) for the supply of CBM gas-to-power to the Government of Botswana. 

It added that talks with other potential off-takers as well as development finance providers are in progress.

Additionally, it said that an environmental impact assessment (EIA) for a power generation facility has been submitted.

In afternoon trading, Tlou Energy shares were 2.7% higher at 5.75p.

In a note to clients, analysts at 'house' broker Shore Capital said: "Our fair value estimate stands at approximately 25p/share and, with a very active work programme underway and strong progress being made at Lesedi, we continue to see excellent scope for Tlou to become a leading Southern African-focused independent power producer."

 -- Adds share price, analyst comment --

 

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