Tlou Energy Share Discussion Threads

[ftangftang] 29/3/2017 06:30

Corporate Presentation



OVERVIEW
•Coalbed Methane (CBM) Gas-to-power development in Botswana and Southern Africa
•Attractive market due to the chronic energy shortage locally & regionally
•High potential power price, CBM would replace existing expensive imported power and diesel generation
•Independently Certified Gas Reserves in place
•Environmental Impact Statement approved for gas field development
•Request for proposal tender for up to 100 MW CBM power project received from Government of Botswana
•Extensive licence* area – 8,300km2
•Currently flaring gas
•Experienced team
www.tlouenergy.com
5
Tlou aims to deliver a gas-to-power solution to a market with a chronic energy shortfall

cheers
ft ft

[wheniamfree] 24/3/2017 22:57

Friday 24 March 2017 The one stop source for free breaking news, expert analysis, and videos on AIM and LSE listed shares




EPIC code: TLOU
TLOU Energy has the potential to succeed
By Gary Newman | Wednesday 15 March 2017


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

TLOU Energy (TLOU) was once one of those AIM companies that was hugely popular with PIs and was attracting a lot of attention and hype. Now that has now subsided, I can see real potential with this company going forward given the track record of those who are running it.

Like many of the natural resource outfits on AIM, I would tend to question the current market cap being as high (£17 million or so) as it is, but when compared to other similar companies that certainly isn’t an outrageous amount given the potential gas reserves that the company is sat on.

At the moment all of its attention is focussed on the Lesedi CBM project in Botswana, and that isn’t a bad thing as at least it means that it can focus its limited cash and resources in one place. The fact that it operates in Africa may be a concern for some, but the reality is that Botswana is one of the most stable countries on the continent, having been an independent democracy for more than 50 years.

It is also one of the most affluent African countries in terms of GDP per capita, and diamonds make up a decent sized chunk of its exports, alongside other mining, but one thing that it has definitely been lacking is electrical power, with outages being common, and power is having to be imported or obtained via generators.

TLOU, which is dual listed on the ASX and AIM, actually looks to be well placed to benefit from these power supply problems through its coal bed methane gas reserves at Lesedi, which can be used to fire a power plant, as an alternative to the far more expensive diesel which is currently being used.

For such a small company it has already made good progress and has the support of the Botswana Government. It was recently invited to tender for a power plant of up to 100MW, and subsequently signed a binding Heads of Agreement with Independent Power Corporation, and will now work on a proposal that will be put before the Ministry of Mineral Resources, Green Technology and Energy Security, for approval. The deal with IPC means that it will carry out a feasibility study (at its own cost) into an initial 10MW pilot project, as well as contributing 50% of any external costs involved in the tender. Under the terms of the agreement, TLOU can opt to be up to a 50% equity partner in any power plant.

Back to the Lesedi project itself, which totals five CBM blocks, and that has already seen numerous exploration wells drilled on it as far back as 2009 – TLOU has held 100% since 2010 – and several appraisal drills have been carried out as well.

This has led to booked gas reserves, and although currently not huge on a 2P basis, those have recently been further upgraded following a report by SRK Consulting. The proven and probable reserves (2P) were increased by 44% to 3.9bcf of gas, but have plenty of further potential upside with the 3P figure getting a 390% boost to 261bcf.

There is also still massive potential for further reserves and resources to be added across the whole project area, with more than 3tcf of 3C contingent resources across all the coal seams in the Karoo Basin.

The beauty of this project is that the gas would be used to fire the power plant, and in turn offtake deals would be done for that power, so the demand would always be there for the gas. In terms of infrastructure, it is proposed that a gas pipeline would be put in place to supply the power plants – the existing 90MW Orapa plant, plus a new, larger one.

It may seem like a big ask for an AIM company to actually achieve all of this, but from what I can see TLOU already looks to be well on the way, and the BOD certainly have a track record in this area, as it includes former CEOs of Sunshine Gas and Mitchell Energy – companies which successfully pioneered CBM in eastern Australia – and the company does look to be ahead of the competition at the moment.

In terms of the finances, it is burning through cash at a similar rate to other AIM resource companies, around £120,000 per month as at the last interims up until the end of December 2016, and at that time had around £1.5 million left in the bank.

It does seem inevitable that ultimately it will need to raise further cash via equity, but as long as it can continue to demonstrate that it is progressing the project forwards and everything is still on track, I wouldn't expect that to come at a huge discount. The IPO was done at 6.5p back in November 2016, and a further over-subscribed placing was carried out in August at 5.5p, raising A$3 million.

This one could well drift a bit lower on any lack of further news, but I can see value in buying at anywhere around the 7p area – that should give upside both longer term as the project progresses towards production, as well as the potential for upward spikes in the shorter term on the back of any good news.

[billyboychrisd] 24/3/2017 18:15

Tim, you have spelled it out for me. A company saying they have funds for 12 months means exactly that. They can survive in current state for that length of time. A company saying "we will not do a capital raise in the next 12 months" is a completely different thing. I'm following several shares at the minute that are fully funded, yet have chosen to do capital raises. One to boost reserves in case of drill for oil not going to plan and one to invest in a new opportunity. I might be mistaken but we haven't yet heard what this money is intended for. Until that time, we might be best to hold off judgement. Fair enough? If you are a frustrated share holder, I understand your frustration. If you are not a shareholder and misinterpreting the facts to draw the share price down then that's your decision. All the best

[timw3] 24/3/2017 15:56

ERRR get your facts right. In their last podcast they said they has funds for 12 months.!!


billyboychrisd24 Mar '17 - 12:08 - 1721 of 1724 1 0
Come on, grow up with the BOD comments.

Board never said they aren't doing a placement, so why wouldn't they be trustworthy any more!?

Companies at this stage need capital raises, that's normal. If you choose to invest in a company you need to accept it's a possibility.

Does not change my opinion of this company one bit (despite the fact I'm frustrated the share price is this low)

All the best

[mr.oz] 24/3/2017 13:18

podcast - Partner IPC very upbeat and excited about the project

[pottermagic2310] 24/3/2017 12:59

The only point anybody really needs to absorb here is this....

"The objective of the work program above is to expand the Company's independently certified gas Reserves...]"

I defer back a couple of months to the point a number of Posters on here made & reiterated for the benefit of existing & potential future PIs... the actual Reserves 'booked' are very flakey (the potential/wishful thinking Reserves just don't count) and are insufficient to support the Vision/Project. The unreported Gas Flow Rates are quite simply so poor that they daren't reveal them and again must be insufficient to support the Vision/Project.
On releasing that News the Business made it clear it was off & about to look for additional Reserves. It hasn't found or declared any in the intervening months.

This latest RNS & work program declared also include further exploits to find additional Reserves. Without them and with insufficient Gas Flow Rates, this is nothing but a "pipe dream". The Tender fails without the viable Product existing (proven) in the ground AND retrievable at sufficient Rates.

What are the timescales for completing this latest work program - by July ???

[billyboychrisd] 24/3/2017 12:08

Come on, grow up with the BOD comments. Board never said they aren't doing a placement, so why wouldn't they be trustworthy any more!? Companies at this stage need capital raises, that's normal. If you choose to invest in a company you need to accept it's a possibility. Does not change my opinion of this company one bit (despite the fact I'm frustrated the share price is this low) All the best

[timw3] 24/3/2017 10:37

lifestyle company paying the directors wages. Notice how non of the directors took part in the placing.

Cannot trust this BOD anymore

Better to invest in a company whos BOD are aligned with shareholders interests. Step forward AAOG!

AAOG !!
ZENGAS17 Mar '17 - 16:08 - 170 of 221 4 0
Nothing wrong with what the directors intend to do but I would have preferred an ambitious outfit to seek more assets if they get the kind of production and very near term cash that they believe could be possible here.

I could see the reasons for this being a really attractive takeover and you don't need the Djeno to ultimately come in - all you'd need is to successfully develop the Mengo discovery to get your hands on significant cash flow.

Infrastructure in place (No spend needed).
Already producing and any new oil would go straight on to production.
Oil production currently from one of the three Point Indienne reservoirs.
Oil found in the Mengo and should produce on fracking/acidisation.
Oil in Djeno analogous nearby fields - so high possibility for same here given reservoir is estimated 350m below Mengo.
Could result in high level of reserves if successful.

Directors intention to pay significant dividend return to shareholders.
With oil at $50/b and an opex of $5 (at 5k bls/day), they should be making $30/b profit and if 5,000 bopd net was acheived would result in $55m (£44m) per year of which they planned to pay about 75% in dividends which might be around £30m/year and over the fully diluted shares could be about 37.5p/year per share.

Given the directors don't seem to have any intention to seek other assets, i'm sure there's plenty of companies that would like to get their hands on that kind of cash flow rather than see that level of cash/dividend going back to shareholders. They could buy further assets and potentially build a much, much bigger oil company. The drawback is knowing if the Djeno has oil ? Saying that they could get the same level of cash flow from the Mengo but the reserves wouldn't be as high for the longer term but still very attractive.
If they establish oil in the Djeno and on the broker note valuation for £190m based on 25% success rate that's in to 240p territory fully diluted.

Very short window to know the 3 stage outcome given the director said they plan to be finished late August/early September on all 3 target zones.

[coley15] 24/3/2017 10:22

Soulsauce "they have had ample opportunity to raise much higher" - obviously not hence the discounted placing price.

[ginko3] 24/3/2017 10:12

adorling,

Bet you feel a bit of a chump now

"FF and SS - Where is the evidence that they are doing a placement? It is just AIM short term traders selling as they did not make 100% profit in 3 days......usual AIM behaviour and mentality IMO."

[soulsauce] 24/3/2017 09:50

Sorry to hear that adorling, I have not been in for a while after making some on the rise last and so it is just very much on my watch list, however I see the signs all too often of forward selling.

What's annoying here is that mgt know what is required going forward and they have had ample opportunity to raise much higher.

[adorling] 24/3/2017 09:34

SS - it does and I am out as beginning to distrust Management. GLA

[timw3] 24/3/2017 08:34

No very happy to have called this right so happy to lap up the moment for now. thank you for the suggestion though

[ftangftang] 24/3/2017 08:33

tim

we can see that you are upset , why not go for a jog round the block
you might feel better
or maybe just find something fun to do
cheers
ft ft

[timw3] 24/3/2017 08:23

in other words sophisticated pump and dumpers

[soulsauce] 24/3/2017 08:21

'sophisticated professional investors' those lucky investors given the opportunity to forward sell and load up at the placing price.

[paleje] 24/3/2017 08:16

"sophisticated and professional investors" - :) love that term.

[sleveen] 24/3/2017 08:11

Could have placed whwn share price was @ 9p and got it away @ say 7.5p.

[bountyhunter] 24/3/2017 08:08

sophisticated and professional investors?

[paleje] 24/3/2017 07:57

Or by pre-selling:) Anyway it was on the cards, I said same as you timw3 but people plough ahead.

Am I right did they say existing UK holders will be able to top up under same terms as the Aussies?

[soulsauce] 24/3/2017 07:43

Does that answer your question adorling?

Is that lower than the last at 6p.

[bountyhunter] 24/3/2017 07:43

as predicted...
Placement
The Placement comprises the issue of 51,788,334 new ordinary shares (representing 17.9% of enlarged share capital) at an issue price of A$0.10 or GBP0.06 per share to sophisticated and professional investors in Australia and the United Kingdom. The Placement shares will rank equally with Tlou's existing shares on issue.