Southern African Unconventional Gas Specialist Annual General Meeting Presentation Nathan Mitchell, Chairman 31 October 2012
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Disclaimer
Important notice and 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.
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 tot future
matters contained in the presentation (“forward-looking statements”). Such forward-looking statements
are by their nature subject to significant uncertainties and contingencies and are based on 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, 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.
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Southern Africa – A Unique Energy Investment Opportunity
Poised to Take Advantage of Favourable Operating and Commercialisation Dynamics
Southern Africa History of Identifying & Commercialising Gas Assets
Botswana Electricity Supply / Demand Estimate (MW) Drawn to Region due to Favourable Investment Attributes
Founders of Tlou were pioneers in the highly
successful eastern Australian CBM industry:
― Sunshine Gas & Mitchell Energy Group
Formed Tlou in 2009 to target unconventional gas
opportunities in southern Africa
Initial focus on Botswana with regional expansion plans
Attractive geology in emerging unconventional gas province
Southern Africa in the midst of ongoing energy crisis
― Considerable current power deficit with growth
opportunities
― Over ~1500MW of diesel fired generation in region
Attractive operating conditions
― Low cost environment
― Favourable government / environmental regulations
Tlou Energy has established itself as a leading unconventional gas company in southern Africa
0
400
800
1,200
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Years
Supply Demand
Source: Norconsult Market Report, 2012
Karoo Sedimentary Basin
Mapped Coal Occurrence
Tanzania
Zimbabwe
Harare
Botswana
Gaborone
Lesotho
Namibia
Angola Zambia
D.R.C
South Africa
Swaziland
Source: Adapted from RISC
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Company Highlights
Tlou’s Competitive Advantage
Board and management team with successful track record
Pioneers in Queensland CBM industry
1
One of the most advanced unconventional gas projects in Botswana with approximately 70 wells drilled
2.3 TCF (3C) contingent gas resource, reflecting over $40MM expenditure to date by Tlou and prior
operators
3
Building prospective acreage in southern Africa
4
Number of paths to commercialisation given southern African energy deficit
5
Favourable operating and regulatory environment
Low cost location combined with government initiatives supporting CBM development
2
5
Experienced Board and Management
Proven Track Record of Success
Board
Key In-Country Management
17 years in resource exploration
CEO of Mitchell Group
International operational experience
― Pioneer of CBM drilling techniques
Non-executive director of Westside
Corporation
7 years unconventional gas experience
Previously CCO of Sunshine Gas
Qualified geologist
Non-executive director of Comet Ridge
9 years managerial experience in mining
service companies
Formerly with PwC
Geologist with 40 years experience in
mineral exploration
South African based
Previously CEO of Talon Metals and prior to
that the Chairman of AfriOre
Nathan Mitchell
Chairman
Anthony (Tony) Gilby
Chief Executive Officer
Chris Pieters
Executive Director
Martin McIver
Non Executive Director
Stuart Comline
Non Executive Director
25 years operational experience with oil and
gas majors, including Exxon
Drilling and geological experience across
Australia, PNG, Brazil and Africa
Professional geologist with strong local
government and industry relationships
Previously Permanent Secretary Ministry of
Minerals, Energy and Water Resources
Served on various private company boards
including De Beers, Debswana and DTC
Glen Smith
Chief Operating Officer
South Africa
Gabaake Gabaake
Regional Manager
Botswana
Francois Badenhorst
Operations Manager
South Africa and Botswana
Over 25 years experience in project
management
Previous VP of Saber Energy and COO of
CIC Energy Corp
Note:
* Henri van Rooyen (Non Executive Director) is also on the Board of Directors but proposes to stand down in 3Q2012
1. Based on Sunshine Gas scrip option and QGC share price implied from the subsequent BG bid for QGC.
Geologist with 28 years industry experience
Co-founder and previous CEO of
Sunshine Gas
― Proved up +1,000PJ of reserves and sold
to BG/QGC in 2008 for ~$1.1Bn (1)
Qualified geologist with previous technical
roles for ESSO, Exxon
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Overview of Tlou’s Projects
One of the most advanced unconventional
gas projects in Botswana
― 100% ownership of ~7,000km2 of granted
CBM permits – Karoo Central and Karoo
West
― Additional permit applications in
Botswana
― Also assessing options to expand
presence throughout region - including
permit applications in Botswana and
Tanzania; operating interests in
Zimbabwe; advanced tenement
negotiations in Mozambique
Southern African Unconventional Gas Specialist
Tlou’s Botswana Permits and Applications
Source: Tlou
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Significant Investment in Projects to Date
Significant Drilling Activity, Particularly in Karoo Central
Systematically acquired data through a programme of
drilling and testing to characterise CBM potential
― Tlou relinquished blocks with low CBM potential
― New applications in prospective areas
Developed one of the most comprehensive
unconventional gas exploration datasets in Botswana
Majority of drilling activity, including two pre-production
wells, in Karoo Central
― Gas flow potential confirmed
Coring program indicates gas reservoirs have shale
potential in addition to coal seams
Karoo Central and West Drilling to date
Activity # Holes Objective
Stratigraphic chip-holes 43 Determine lateral extent
of coal and shale
Core holes 23 Gas content and quality
Pre-production and monitoring wells 4 Measure gas flow potential
Location and Selected Results
Source: Tlou
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Multi TCF Resource Base, Certified by NSAI
Potential to Expand Resource Certification Across Other Acreage
Potential to Expand Resource Certification Multi TCF Resource Base
First CBM operator in Botswana to achieve
a NSAI contingent resource
― 2.3 TCF (3C) Contingent resource
― 8.6 TCF (High Estimate) Prospective resource
Significant resource expansion potential
― Current 2C certification covers <3% of Karoo
Central area and does not include shale reservoirs
Further acreage and potential resource upside
― Karoo West area
― Applications pending in Botswana
― Additional permits / applications in southern Africa
Source: Netherland Sewell & Associates (NSAI)
Note:
1. 1C volumes not identified at this time.
2. OGIP = Original gas in place.
Source: Tlou
Category
OGIP(2)
(BCF)
Unrisked Gross
(100 Percent) (BCF)
Contingent Resources (1)
Best Estimate (2C) 303.5 152.2
High Estimate (3C) 4,559.5 2,322.4
Prospective Resources
Low Estimate 2,459.5 644.1
Best Estimate 7,653.1 3,239.0
High Estimate 14,326.8 8,596.1
Resource Statement
Current Tlou Resource Certification Area
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Building Acreage Throughout Southern Africa
Positioning to be a Regional Leader in Unconventional Gas
Zimbabwe
Operating interest in 2 CBM special grants /
1 application spanning ~3,000Km2
― Exposure with minimal near term in-
country investment required
Uganda
Gabon
Congo
Namibia Zimbabwe
South Africa
Mozambique
Angola
Botswana
Kenya
Malawi
Tanzania
Democratic
Republic of the Congo
Zambia
South Africa
Given difficult regulatory and operating
environment, currently Tlou does not intend
to operate/explore in South Africa
Mozambique
Advanced discussions to gain acreage in
Zambese basins
― Region considered to offer significant
CBM potential
― Vale and Rio Tinto have engaged CBM
studies in the area
Tanzania
66,000Km2 of CBM tenements under
application in the Selous basin
― Geographically prospective coal basin Southern Africa
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Near-Term Local Commercialisation Strategy
Botswana Domestic Gas to Power
Botswana Electricity Supply / Demand Estimate (MW)
Source: Norconsult Market Report, 2012
Botswana power demand outstripping supply
― Investment in generation required
― Government focused on broadening fuel supply
options, including gas
Potential to replace dependence on expensive diesel
fuelled generation (est. US$25/GJ)
― 90MW at Orapa translating to 60MM litres p.a.
diesel replacement
― 180MW planned Mmashoro CBM fired generation
plant, representing opportunity equivalent to
~200MM litres diesel p.a.
― In total, diesel replacement opportunities may
represent gas sales opportunities of 10MM GJ p.a.
Gas also represents an attractive alternative for off-grid
temporary power solutions, currently relying on diesel
generation (1 – 2MM GJ p.a.)
Potential for additional gas fired generation plants to
address regional shortage
0
300
600
900
1,200
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
``
Years
Morupule A Eskom Imports Non-Firm Imports (SAPP)
Emergency Diesel Generation (70MW)
Dual Fuel Generation (Orapa 90MW)
Morupule B Phase 1 (600MW)
Demand
Demand +15% Reserve Margin
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Longer-Term Commercialisation Opportunity
South African Energy Market – Addressing the Energy Shortage
South Africa Electricity Supply / Demand Estimate (MW) South African energy market under pressure to meet
growing demand
― Demand has outstripped supply since 2007 / 2008
Potential shortfalls of up to 1,500 to 2,000MW p.a. up
to 2016
Provides numerous opportunities for Tlou to export
power/gas to help address shortages
Tlou’s Potential Export Opportunities
Opportunity Size (GJ p.a.) (MM)
Power Generation
Replace diesel peaking generation at Eskom’s
1,400MW plant 15 – 20
2,000MW gas to power generation expansion 80 – 90
Fill potential shortfall from delay /
abandonment of 2022 nuclear program 200 – 300
Gas Sales
Industrial gas demand 60 – 100
Source: Norconsult Market Report, 2012 Existing Plant (Pre-2009)
35,000
42,500
50,000
57,500
65,000
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
``
Committed IPP Capacity
Eskom Committed Capacity
Demand +19% Res. Mar. (No DSM)
Demand +19% Res. Mar. After DSM
MW
Source: Norconsult Market Report, 2012
Chart assumes Eskom delivery on its committed 14,000 MW
expansion program with remaining shortfall to be made up from
independent power producer (IPP) projects through to 2020
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