AFRICAS LARGEST CBM COMPANY PRESENTATION Tony Gilby, Non Executive - - PowerPoint PPT Presentation
AFRICAS LARGEST CBM COMPANY PRESENTATION Tony Gilby, Non Executive - - PowerPoint PPT Presentation
AFRICAS LARGEST CBM COMPANY PRESENTATION Tony Gilby, Non Executive Director January 2012 DISCLAIMER This document has been prepared by Tlou Energy Limited to provide existing and prospective investors in Tlou Energy Limited with an update on
DISCLAIMER
This document has been prepared by Tlou Energy Limited to provide existing and prospective investors in Tlou Energy Limited with an update on the Company and its operations. Extent of Information This presentation, including the information contained in this disclaimer, does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and neither the presentation, disclaimer nor anything contained in the forms the basis of any contract or commitment. This presentation does not take into account your individual investment objective, financial situation or particular needs. You must not act on the basis of any matter contained in this presentation, but must make your own assessment of the Company. No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of information contained in this presentation, including the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects, returns or statements in relation to future matters contained in the presentation (“forward-looking statements”). Any such forward-looking statement that are contained in this presentation or can be implied by the same are by their nature subject to significant uncertainties and contingencies associated with the gas and energy industry and are based
- n a number of estimates and assumptions that are subject to change (and in many cases are outside the control of Tlou Energy Limited and its
directors) which may cause the actual results or performance of Tlou Energy Limited to be materially different from any future results or performance expressed or implied by such forward-looking statements. To the maximum extent permitted by law, none of Tlou Energy Limited’s, or related corporations, directors, employees, or agents, nor any other person, accepts any liability, including, without limitation, any liability arising from fault or negligence, for any loss arising from the use of this presentation or tis contents or otherwise arising in connection with it. Exclusion of Financial Product Advice This Presentation is for information purposes only and is not a prospectus or other offering under Australian Law or under any other laws in the jurisdictions where the presentation might be made available in. Nothing herein constitutes investment, legal, tax or other advice. This Presentation is not a recommendation to acquire shares and has been prepared without taking into account the investment objectives financial situation or needs of individuals. Independent Advice Before making an investment decision, prospective or existing investors should consider the appropriateness of the information having regard to their
- wn objectives, financial situation and needs and seek appropriate advice, including financial legal and taxation advice appropriate to their own
- jurisdiction. Tlou Energy is not licenced to provide financial advice in respect of its shares.
COAL BED METHANE SOUTHERN AFRICA
- Coal Bed Methane (“CBM”) in southern Africa is a critical
component in the energy mix for the region. CBM allows Botswana; to develop a distributed energy solution to remote large mines and communities that can not be connected to the traditional grid; an alternative income model, providing diversification from diamond mining; alternative source of energy for South Africa to Mozambique gas supplies.
- Tlou Energy has the most advanced CBM project in the
region and is rapidly progressing its Botswana fields.
- Reviewing other profitable commercial opportunities in the
region.
- Fully funded to meet committed expenditure in 2012, asset
exploration, appraisal / pilot drilling and early development.
- High quality portfolio of coal and unconventional gas
projects where significant upside exists.
BACKGROUND
Electrical network interconnection in southern Africa.
Data source: http://www.africa-energy.com/html/Public/map_library/Atlas%2011/SAPP.html
BACKGROUND
- Political & Financial Stability
- Stable multi-party democracy
- GDP per capita of US$ 5,995
- Average GDP growth of 5% (2003-2009)
- US$ 9 billion foreign currency & gold reserves
- Favourable foreign investment culture
- No exchange rate controls
- Low tax rate
- A2 credit rating by Moody.
- Transparency International
- Rates Botswana as having on the of the lowest
corruption indexes in the world, 36th out of 180 countries (2008)
- Fraser Institute
- Botswana rated as being one of the most
favourable environments for mineral investment, 14th out of 78 countries ranked (2011)
BOTSWANA OVERVIEW
Data source: AON 2008 Political and Economic Risk Map.
BACKGROUND
Data source: Botswana Government 2011.
- Electric power consumption has grown 528% since
1981.
- Eskom will no longer supply energy in 2012.
- Morupule B has been delayed 18 months and will not
come online as shown on Botswana Government chart opposite.
- Energy supply is reaching a critical point for the
country.
- The country’s favourable geologic environment, mineral investment
climate, low tax rates, and political stability are expected to continue to make Botswana a foreign mineral investment magnet.
- Several proposed transmission projects have been proposed
however the mining industry is dispersed with no easy access to the electrical grid.
- At present Botswana imports approximately 75% of its energy needs
from Eskom in South Africa.
Data source: Botswana Government 2011.
SUPPLY/DEMAND DYNAMICS CONTINUE TO IMPROVE…
AUSTRALIA COMPARISON
- Queensland’s CBM Industry reserve growth can
be seen opposite. Having been part of the CBM industry in Australia, we estimate the CBM industry in Botswana is estimated to be six years behind Australia.
- Tlou Energy can grow its energy assets through
further funding for exploration and drilling activities.
- Tlou Energy’s current and future valuation can be linked to
CBM transactions completed in Australia.
- The value range of corporate transactions is $0.16 – 0.21
per 3P and 2C resources based on NSAI estimates as at 31st Dec 2009.
- Tlou Energy has strong relationships with companies that
can provide the mining industry with generators on a tolling arrangement that utilizes CBM. This means that Tlou Energy can offer mining companies a complete energy solution.
Data source: Queensland Government 2011.
COMPARISON TO AUSTRALIAN TRANSACTIONS
MAJORS ENTERING BOTSWANA
- Botswana’s energy landscape is
moving through a rapid transformation with larger companies taking an active role within the country.
- Tlou Energy has a first mover
advantage over the new entrants, in terms of;
- Political
- Choice of permits
- Relationships
- Technology
- Geological
- Partnerships
Tlou Energy Permits Exxaro Permits Sasol / Origin Energy Permits Anglo Coal Permits
LARGE MULTINATIONALS DEVELOPING CBM PERMITS
PROXIMITY TO MARKET
DISUCSSIONS FOR GAS SALE AGREEMENTS WITH SEVERAL PARTIES
- Botswana’s mining industry is heavily reliant on
heavy fuel oil / diesel. The diesel cost as a gas equivalent ranges from AUD 20/GJ to AUD 26/GJ. Strong incentive for industry / mining companies to convert to gas.
- Aggreko offers a distributed power model for
the commercialisation of gas to industry and mining operations in the region. Discussions between both companies are ongoing.
- Gas sales to South Africa are an option. Sasol /
Origin Energy are seeking to diversify South Africa gas imports from Mozambique. Recent gas outages highlighting gas shortage issues:
http://sundayexpress.co.ls/?p=5422
- Orapa power station is planned to convert to
coal bed methane from diesel as soon as possible, expected fuel cost saving of 60%;
www.trademarksa.org/news/orapa-power-station-set-grand- launch http://www.bpc.bw/latest_news04.php http://www.mmegi.bw/index.php?sid=4&aid=768&dir=2011/Oct
- ber/Monday17
KEY MILESTONES
MEETING MILESTONES
- Achieve first gas flow from wells in 1H 2012 – ramp up profile key deliverable of this program
- Continue discussions with downstream parties about potential short-term gas commercialisation and off-take
PROJECTS
MOST COMPREHENSIVE EXPLORATION DATASET IN SOUTHERN AFRICA
- This extensive exploration and testing program has allowed
Tlou Energy to high grade our project areas and move to the next phase of evaluation
- Wells drilled;
Core holes: 30 from which the gas content and its quality were tested Stratigraphic holes: 41 to determine the lateral extent
- f the coal and the shale
Pilot Production wells: 20, consisting of 4 five-spot patterns
- Data Collated;
1000+ Gas Desorption samples 18 Adsorption isotherm Analysis samples 170 Relative Density and Proximate Analysis samples 255 Chromo Gas Analysis samples 20 Drill Stem Tests (DST’s)
- 5 wells completed and tested in last
program
- Karoo Central was primary target for
Saber
- Tlou introducing new testing methods to
assess CBM suitability
- 18 DST’s completed delineating fair to
good permeability
- 200+ Coal and shale tests complete
- Pre-Pilot testing imminent
KAROO CENTRAL PROJECT
PROJECTS
- Program began in October 2009
- 5 wells drilled and tested
- Low gas content coals intersected
- Have moved towards relinquishment of
non-prospective areas
- Discovered a prospective coal package
in south of permit area
- Extension of known1.3bt non-JORC
compliant coal resource (Asenjo Energy)
- Currently assessing options as to
progression of asset Asanjo Energy Dukwe Mine Plan (~1.3bt) PL 154/2007
MASAMA PROJECT
PROJECTS
- Tlou has recently signed a deal to acquire a
controlling share in 3 highly prospective CBM Special Grants in Zimbabwe
- ~3000km2 acreage position
- Geological potential of Zimbabwe superior to
Botswana
- Transaction provides significant option value for
the company with minimal work requirements
- ver the next 3 years
- Allows Tlou to evaluate political situation in the
country before investing significant capital and/or resources
ZIMBABWE EXPANSION
PROJECTS
- Tlou is actively seeking additional CBM acreage in
Botswana and surrounding countries in southern Africa including: Elsewhere in Botswana Zimbabwe Mozambique Tanzania Malawi
- In addition, Tlou has identified other opportunities
within Botswana as part of its initial exploration program including: Conventional Coal UCG
- Tlou is currently assessing potential partners for
these projects
NEW BUSINESS OPPORTUNITIES
PROJECTS
TLOU CORPORATE
EXECUTIVE TEAM
Nathan Mitchell
Chairman
Nathan has had > 17 years working in the resource exploration industry. He is also the CEO of Mitchell Group with drilling
- perations in Zambia, Indonesia, China and
- India. Considered a market leader in
leading edge drilling techniques for CBM.
Chris Pieters
Executive Director
Chris has > 8 years experience in the CBM
- industry. His previous role was the COO of
Sunshine Gas Ltd. (SGL) which was taken
- ver by Queensland Gas Corporation
(QGC). Chris holds both B. Sc. (Geology) &
- B. Business from The University of
Queensland and an Hons. degree in Petroleum Geology and Geophysics.
Anthony Gilby
Non Executive Director
Anthony was previously the CEO of SHG which was taken over by QGC / BG Group for more than USD 1 billion. Prior to SHG, he worked in a variety of technical roles for ESSO, Exxon and others. He obtained a
- B. Sc, with First Class Hons. in Geology as
well as the University Medal in Geology from the University of Adelaide.
Martin McIver
Non Executive Director
Martin has had >9 years experience at General Manager and Director levels in mining service companies. Prior to joining Tlou he was a Director of Corporate Finance with PWC. Martin Holds an MBA (International) with honours, a Graduate Diploma in Finance and a B. Business from QUT.
Stuart Comline
Non Executive Director
Stuart is a geologist with > 40 years experience in mineral exploration in a wide range of operations in Africa, North and South America. Previously he was the CEO
- f Talon Metals Group and prior to that the
Chairman of AfriOre Ltd. until it was sold to Lonmin PLC for USD 495M in 2007. Stuart holds a B.Sc. Hons. Degree from the University of Natal.
Henri van Rooyen
Non Executive Director
Henri has > 9 years experience in exploration and mining. Including founding, developing and selling two South African mining and exploration projects. He has been a Senior VP of Tau Capital Corp since 2007. Henri obtained his B. Commerce and Hons. Degree from the University of Johannesburg and is a qualified CA.
TLOU CORPORATE
ORGANISATION STRUCTURE
Anthony Gilby Non Executive Director James McKay Chief Executive Officer Glen Smith Chief Operations Officer Francois Badenhorst Country Manager Neville Large Camp Manager Don Langton Chief Financial Officer Colm Cloonan Financial Controller Michelle Dawson Financial Accountant Maritha Harris Accountant Michael Langford Corporate Communications Gabaake Gabaake BD / Government Relations Mark Di Bacco Chief Geologist Jan Hulse Senior Geologist Remigiyo Mavata Senior Geologist Chris Pieters Executive Director Martin McIver Non Executive Director Stuart Comline Non Executive Director Nathan Mitchell Chairman
Field Staff 20 x Employees
Henri van Rooyen Non Executive Director
INVESTMENT HIGHLIGHTS
NEXT 7 MONTHS
- Tlou is well positioned and has first mover advantage in the southern Africa CBM space. Management is focussed on
delivering value across several fronts: Completion of resource review for Botswana CBM project Commencement of pre-pilot well testing program to ascertain gas flow potential Continue negotiations to attain highly prospective CBM acreage in adjacent southern African countries Develop multiple commercialisation options taking advantage of highly favourable southern African energy supply- demand dynamics