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Botala Energy (ASX:BTE) has hit a major milestone in a program aimed at reducing Botswana’s major energy issues with the spudding of the principal production well at the Serowe coal bed methane (CBM) project.
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The move is being made as Botswana is facing a power crisis driven by low internal generation, largely due to failures and maintenance issues at the main coal-fired power station, leading to frequent load shedding.
Although 85 to 90% of the electricity is generated locally, mainly from coal, reliance on regional imports remains necessary to meet demand.
However, Botala’s Project Pitse and its Serowe CBM field are on target to provide stable domestic power to the country and the Southern African region.
Well 3.5B is key in Project Pitse, Botala’s multi-well pilot designed to progressively de-risk reservoir performance and establish a production pathway towards a commercial LNG development targeting up to 3.5 petajoules per year.
It is expected to provide important data for flow-rate analysis, reserves determination and reservoir performance for the bankable feasibility study.
CEO, Kris Martinick, said the spud follows encouraging recent results from Pitse well 3.3, where stimulation and step-rate testing confirmed a strong reservoir response, measurable permeability and evidence the Upper Morupule coal seam, in addition to the Serowe coal seam, may contribute to future production.
“The well could be transformative, by unlocking the multi-BCF potential of Botala’s 4,200 sq. km acreage over one of Botswana’s sweetest known gas spot,” he said.
“It is the principal production well in this phase of the project and is expected to deliver critical data on flow performance and provide further confidence in our pathway toward commercial gas production.
“Importantly, the well design has benefited from the strong technical results achieved at our first stimulated well, 3.3. With drilling now underway, we look forward to completing the well and moving into stimulation and flow testing as we continue to de-risk the Serowe project and head to production.”
BTE closed Monday at 5.1¢. Mkt cap 17.18M.
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