TLOU – Field Operations Update

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”) is pleased to provide an update on the status of field operations at the Lesedi CBM Project (“Lesedi”) in Botswana.

Highlights

·   The two development pods (comprising three wells in each pod) have been completed and are de-watering prior to controlled gas being produced;

·    Strong gas indications were observed while drilling and initial water flow is similarly very encouraging;

·    All wells in the current program have now been drilled with expenditure to date in line with budget.

Field Operations

Tlou Energy has drilled all six wells which comprise the Lesedi 3 and Lesedi 4 development pods (each pod comprising one vertical production well and two lateral wells) as part of the recent field drilling program.  The drilling program was carried out efficiently and safely as a result of the excellent work of the field personnel.  The Lesedi 3 and 4 development pods are located adjacent to the Company’s proposed central gas gathering and power generation facility.  This is in a geological region that has intersected a gassier trend based on an extensive geological review of the sub-surface using all available geological and production data to date.*

Prior to starting the program, the Company purchased a significant amount of drilling equipment which enabled Tlou to control costs and timing of the program.  The net result is that the drilling program was completed on time and in line with budget.  This is a significant achievement and demonstrates the Company’s ability to deliver a cost effective and timely program in the Kalahari Desert.

Very importantly, when the lateral wells intersected the vertical production wells, a significant amount of gas was observed bubbling from the production wells.  This occurred on both the Lesedi 3P and 4P intersects but particularly on Lesedi 4P.  In the Lesedi 4 development pod, the Company targeted the upper portion of the coal seam.  This may be very significant for future drilling campaigns and, when combined with recently evaluated structural trends, may provide the key to unlocking significant amounts of new gas reserves.

Tony Gilby, Tlou’s Managing Director, said “I am very encouraged by the recently completed drilling program and in particular the strong gas indications observed to date.  Furthermore, the good initial water flow, which is higher than that previously observed at Selemo, is potentially indicative of good permeability and therefore potentially good gas flows in this geologically high-graded area.  Completing the wells in a timely manner and on budget was a great effort by the field staff and they are to be commended for their achievements.”

The wells will continue to de-water over the coming weeks with first indications of controlled gas pressure increasing anticipated in 2Q19.