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TLOU Energy’s Q3 update highlights “excellent” start to CBM flow testing

TLOU is advancing the CBM venture and it sees the potential to become a pioneer in the industry's development in Botswana.

Tlou Energy Limited - TLOU Energy’s Q3 update highlights “excellent” start to CBM flow testing
The wells have flowed at 20,000 cubic feet per day but rates are expected to rise

TLOU Energy Limited’s (LON:TLOU) quarterly update highlighted “an excellent start” to flow testing at its Botswana coal bed methane wells.

The company, in a statement, told investors it is very encouraged by production data to date.

Flows continue and the company noted that, like most new CBM wells, the Lesedi operation is expected to see increasing rates as pressures in the coal continue to reduce with additional dewatering.

It said the aim is to reach a peak and commercial gas flow rate as soon as possible.

WATCH: Tlou Energy's Tony Gilby updates on Lesedi production ahead of site visit next week

Right now, the pressure is being maintained as water flows continue to reduce – thus making the wells saturated with the methane gas – and, in time, the pressure will lower to the optimal level and then a significant increase in gas rates is expected.

“With CBM projects not yet established in this region, Tlou could pioneer CBM development in the area,” Tlou said in its quarterly statement.

“Successful results from this project could potentially facilitate the opening up of a whole new CBM basin in Botswana and be a significant boost not only for Tlou, but for the whole region, with the potential for Tlou to supply power within Botswana and also into neighbouring countries via the Southern African Power Pool.”

Key events for Botswana CBM venture

Tlou noted that during the three months ended 30 September it saw the Lesedi 3 and 4 achieve initial sustained gas flows, measuring around 20,000 cubic feet per day from each production pod.

The company also carried out core-hole drilling work in the Mamba project area using Tlou's own drilling rig. The aim of this programme was to gather data that would be needed to expand gas reserves and contingent resources.

Quick facts: Tlou Energy Limited

Price: 2.9 GBX

Market: AIM
Market Cap: £13.06 m

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