Tlou Energy Limited, the ASX, AIM and BSE listed company focused on delivering power in Botswana and southern Africa through the development of coal bed methane (‘CBM’), has commenced production testing at its Lesedi 3 development pod. Excellent progress is also being made on drilling operations at the second development pod, Lesedi 4.
· The Lesedi 3 development pod has been completed with surface production equipment now installed and operational;
· The Lesedi 4A lateral well has been successfully drilled;
· Drilling is underway at the Lesedi 4B lateral well, being the final well in the current program;
· The Company will provide further updates as both production testing and drilling operations progress.
Drilling operations at the Lesedi 3 development pod were completed earlier this month. Production equipment has been installed and production testing is now underway. Production testing involves de-watering and lowering of the pressure in the coal seam to achieve gas flow. Testing procedures will continue over the coming months with initial performance data expected in Q2 2019.
Drilling has also been completed on the first of two lateral sections (Lesedi 4A) of the Lesedi 4 development pod. Lesedi 4A was drilled ~1,435m measured depth and successfully intersected with vertical production well Lesedi 4P. Drilling of the second lateral well (Lesedi 4B) is ongoing. This well is planned to be the final well in the current drilling phase. The Company will provide further updates as the drilling operations progress.
Background to the development well drilling program
The Company commenced drilling of development wells at its gas field in late 2018. The wells are being drilled as ‘dual lateral pods’, comprising a single vertical production well intersected by two lateral wells. The lateral wells are being drilled through the gassy coal seam with gas extracted from this coal produced through the vertical production well where it can be gathered and used for power generation. Pod One is designated ‘Lesedi 3’ and comprises a vertical production well (‘Lesedi 3P’) and two lateral wells (‘Lesedi 3A’ & ‘Lesedi 3B’). Pod Two is designated ‘Lesedi 4’.
The development drilling program is being conducted in accordance with health and safety requirements and is consistent with the Company’s approved environmental impact statement. If results are positive, these wells will form part of the Company’s initial gas-to-power project which will include installation of transmission lines and grid connection.
The gas-to-power tender submitted by the Company to the government of Botswana (as per the market announcement on 10 October 2018) is still being assessed by government. The Company remains confident that an update will be provided in the near term.