Press

Tlou achieves significant increase in Gas Reserves

Posted by OilVoice Press - OilVoice

15-Feb-2017


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 a significant upgrade of Reserves for the Lesedi CBM Project ("Lesedi") and initial Reserves for the Mamba Project in Botswana. This latest Reserves assessment has been independently certified by Dr Bruce McConachie of SRK Consulting (Australasia) Pty Ltd ("SRK"). 

Highlights:

  •  44% increase in 2P (Proved and Probable) Gas Reserves to 3.9 billion cubic feet (BCF)
  • 390% increase in 3P (Proved, Probable and Possible) Gas Reserves to 261 BCF
  • The increases comprise:
    • additional certified Reserves in the Lesedi Project area (PL 002) based on a southern extension of the Selemo pilot area; and
    • initial certified Reserves in the Mamba Project area (PL's 238 and 240) based on a western extension of the Selemo pilot area.

Tlou Managing Director Tony Gilby said, "This significant upgrade in Reserves reinforces the commerciality of the Lesedi Gas Project.  The success of the Selemo pilot in producing sustained gas flows for a substantial period suggests that there is significant gas production potential for the area.  Our ongoing work to assess this continues in tandem with our planning for the staged delivery of a commercial CBM power facility, for which we have received a detailed Request for Proposal from the Government of Botswana. 

We are very pleased to have received the first gas Reserves in the Mamba Project area, which demonstrates the upside available within our portfolio.  Together, we believe that the Lesedi and Mamba projects will continue to develop into a valuable resource for Tlou shareholders as we work towards increasing the certified gas Reserves in both areas. Furthermore, the Company is on track to become the first gas to power producer in Botswana." 

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 has attributed Gas Reserves to Tlou's 100% interest in the Lesedi and Mamba Project permits using the deterministic method of petroleum Reserves estimation as at 1 January 2017. 

The table below, in billion cubic feet (BCF) and petajoules (PJ), summarises the changes to the Company's Reserves position for Lesedi and Mamba as at 1 January 2017. 

Table 1:  Lesedi and Mamba Independent Gas Reserves Certification (Lower Morupule seam only) 

Tlou Interest (100%)
Gas Reserves (BCF) 1
Gas Reserves (PJ) 2
Category
1P
2P
3P
1P
2P
3P
01 January 2017
certification by SRK
0.17
3.9
261.1
0.14
3.2
242.7
26 September 2016
certification by SRK
0.1
2.7
52.9
0.1
2.1
42.2
Increase
0.07
1.2
208.2
0.04
1.1
200.5

Notes to Tables 1 above:

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 ASX Listing Rule 5.26.5) for the Lower Morupule seam only.

2) The energy content of the gas was determined by SRK at different quantities for the Lower Morupule coal seam based on corehole gas composition in the individual areas where Reserves were certified.

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) and PL's 238/2014 and 240/2014 (Mamba 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 updated independent certification that is based on SRK's review of regional data surrounding the Selemo pilot area to the south and, consistent with the prior Reserves assessment (announced to the market on 12 October 2016), relates only to the Lower Morupule coal seam.  

The Mamba Reserves Statement received from SRK represents an initial independent certification that is based on SRK's review of regional data to the west of the Selemo pilot area and relates only to the Lower Morupule coal seam.  In both cases, the Reserves estimates in these southern and western extension areas were based on the high level of stratigraphic continuity of the Lower Morupule coal seam and data about the reservoir and gas quality from prior corehole data and seismic activity. 

An updated Gas Reserve and Resource statement for all of Tlou's tenements as at 1 January 2017 is shown in Table 2 below, in accordance with ASX Listing Rule 5.25.3.  It should be noted that the Reserves assessment by SRK (which is the subject of this announcement) did not include a review and assessment of Contingent Resources in the Mamba Project area. 

Table 2:  Tlou Net Gas Reserves and Resources for all tenements and seams - BCF 

Tlou 100% interest
Location
Project
Tlou Interest
Gas Reserves (BCF) 1
Gas Contingent Resource (BCF) 2
Gas Prospective Resource (BCF) 3
1P
2P
3P
1C
2C
3C
Karoo Basin Botswana
Lesedi CBM (Lower Morupule coal)
(PL002/2004)
100%
0.15
3.5
117
4.3
67.4
470
-
Karoo Basin Botswana
Lesedi CBM (all coal seams)
(PL001/2004,
PL002/2004)4
100%
0.15
3.5
117
4.3
235
3,183
-
Karoo Basin Botswana
Mamba CBM
(Lower Morupule coal (PL238/2014
PL240/2014)
100%
0.02
0.4
144
n/a 5
n/a 5
n/a 5
-
Karoo Basin Botswana
PL003/2004,
PL035/2000,
PL037/2000
100%
-
-
-
-
-
-
8,596 6

Notes to Table 2 above:

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 gas 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 2 includes the numbers for the Lower Morupule coal seam which are shown in the first row of Table 2.

5) The current Reserves assessment by SRK which is the subject of this announcement did not include a review and assessment of Contingent Resources in the Mamba Project area.

6) 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).

Tlou Energy

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