Coal bed methane (CBM) play Tlou Energy (TLOU:AIM) has reported a big upgrade to the estimated resources attached to its assets in Botswana.

The news may help to win back the market’s interest. Market sentiment was hit earlier in February by authorities in Botswana asking for a re-tender on its bid to develop a CBM-based gas-to-power project.

House broker Shore Capital sees this as a ‘mild frustration’ but points to the big increase in reserves as the more significant news.

Proved and probable or 2P reserves for its Lesedi and Mamba developments increased 944% to 40.8 billion cubic feet in an independent report released on 20 February.

The next step for the company is to develop these resources and alongside its first half results on 22 February the firm outlined several targets for 2018. These include:

– Commencing initial development drilling

– Potential purchase of drilling rigs to provide more operational control

– A new seismic survey

– Securing a power purchase agreement

– Approval for connecting its gas up to the electricity grid

This is an ambitious set of targets, particularly given the current net cash position of $7.45m. (TS)

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