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Tlou Energy believes proposal for Lesedi is compelling

Tlou has started to drill pilot production wells at Lesedi
Gas pipes
The plant can be blue print for other CBM projects

Tlou Energy PLC (LON:TLOU) shares rose on Tuesday after the firm said it believes it has ‘submitted a compelling and robust proposal’ for a thermal power station at the Lesedi coal bed methane site in Botswana.

The company, which was asked to re-tender for the contract, said it had ‘outlined a staged development commencing with up to 10MW of generation as well as outlining project feasibility, proposed field development, installation of power generation facilities and supply of power into the grid in Botswana.  

READ: Tlou Energy starts drilling at Lesedi in Botswana

“If Tlou's proposal is successful, this will provide an ideal pathway towards a power purchase agreement, it added. 

“Once an initial development is completed, Tlou Energy's gas field will be connected to the regional grid, thereby opening the possibility for the company to provide power across the region, via the Southern African Power Pool.

Tlou has started to drill pilot production wells at Lesedi, which would form part of the gas-to-power project.

In its latest operational update, it predicted exploration spending of A$4.2mln for the current quarter.

Cash holdings at the end of the quarter were A$9.1mln.

In a note to clients, analysts at ‘house’ broker Shore Capital commented: “Our fair value estimate stands at approximately 25p/share and, with the company’s RFP response now successfully submitted and a very active work programme in progress at Lesedi, we continue to see excellent scope for Tlou to become a leading Southern African-focused independent power producer.”

In afternoon trading, Tlou Energy shares were 2.9% higher at 5.40p.

 -- Adds analyst comment, share price --

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