Market's view on Tlou Energy
Published on April 2024
- Tlou is advancing its CBM assets in Botswana with the Lesedi gas-to-power project, holding significant 2P reserves and 2C resources. Construction includes a 66KV electricity transmission line with a 10MW PPA from BPC aiming for expansion up to 25MW, and possibly integrating solar and hydrogen production.
- Expectations are set for Tlou to initiate electricity sales in 2024, following ongoing development activities such as substation completion, power generation equipment installation, and CBM drilling.
- Funding for development has been partially secured, with contributions from ILC Investments and the Botswana Public Officers Pension Fund, alongside a process to secure full development funding.
- Financial concerns are noted, with potential need for further financing as Tlou continues to manage its cash flow.
- Some stock watchers speculate on another share placement due to financial needs, suggesting a possible price point of around 2p for the new shares.
- Discussions around the placement opportunities and entitlements for shareholders in different regions, highlighting issues with share allocations and potential unfair treatment between AIM and ASX listed shares.
- The recent positive development of gas flows from the Lesedi 6 pod is highlighted, marking a significant step in production capabilities.
- There is speculation on the potential re-rating of the stock dependent on commercial viable flow rates from ongoing dewatering processes.