ASX-listed Botala Energy continues to achieve important technical milestones at Project Pitse where appraisal activities are delivering commercially encouraging results. Serowe Wells 3.1 to 3.5 have provided valuable gas flow data and serve as platforms to optimise completion techniques. Botala is evaluating open-hole versus cased-hole designs and stimulation methods as part of finalising its Field Development Plan, ahead of commercial rollout scheduled for Q4/2025. This is subject to completion of a favourable Bankable Feasibility Study (BFS) and securing project funding.
Phase-1 of Project Pitse will mark the start of Botala’s Serowe Coal Bed Methane (CBM) gas field development, requiring continuous drilling and completion of approximately 40 vertical wells. These wells are expected to produce ~200 t/d of Liquefied Natural Gas (LNG) for delivery to SCAW South Africa, a major industrial company and steel producer near Johannesburg, under a binding gas sales agreement (see ASX announcement on 27 March 2025, “Botala Energy Signs Binding Letter of Intent for Gas Offtake Agreement with SCAW.”)
For Project Pitse, on the Western Flank of the ~420 000 ha large Serowe Project Area, results of just five wells defined a certified contingent resource sufficient to support Phase-1 development. The Eastern Flank, ~40km away and partially across an adjacent prospecting licence not owned by Botala, has a history of high gas flow rates and robust well performance data reported by earlier operators. Geophysical surveys and comprehensive mapping by Botala of coal presence strongly suggests existence of a single, large-scale CBM gas field within the entire West to East region.
Proximity to historical production areas is no guarantee that Botala’s projects will be economically viable for commercial production. As such, investors are cautioned not to place undue reliance on the proximity of Botala’s projects to such historical production areas in making an investment decision in respect of Botala.
Expanding the Exploration Programme – A Low-Cost Growth Strategy Botala plans to drill five exploration wells in 2025, aiming to bridge production data from the Western Flank with proven CBM zones ~40 km eastwards, near the bitumen road to the 90 MW Orapa gas-fired power station. The latter remains inactive due to a lack of gas supply. This exploration phase is designed to facilitate a comprehensive reinterpretation of gas resources within the entire Serowe Coal Basin and support an updated independent resource assessment by late 2025.
These wells will be drilled and equipped using Botala’s newly acquired drilling fleet, significantly reducing costs to an estimated ~A$100 000 per well, or less than half the previous average of ~A$220,000. This capability enables more aggressive resource delineation at a fraction of Botala’s historical costs.
Botala’s Serowe-3 five-well cluster (Project Pitse), located in a high-potential zone in the Western Flank, is noted for three evenly distributed coal seams (30 to 40m of coal) and favourable geophysical data. Preliminary data for eastward drilling suggests similar coal characteristics to those found in the Western Flank and in well MAS-13, just outside Botala’s mid-eastern Serowe Project Area. This well flowed gas at a sustained rate of 110 000 - 120,000 scf/d before declining with pump failures in the surrounding dewatering wells1. For comparison, the low-case commercially viable low rate identified in Botala’s initial BFS for Project Pitse is ~40 000scf/d (ASX announcement of 17 February 2025; as part of the Appendices to the Independent Expert’s Report).
These exploration results are expected to guide rapid development of new wells in the Eastern Flank and the region to the Western Flank, particularly near wells of high historical gas flows and the bitumen road to the Orapa power station.
Equipment Acquisition – A Strategic Advantage
Historically, Botala relied on the only contractor in Southern Africa equipped to drill, test and develop CBM wells; they used equipment imported from the USA for these purposes. This equipment was purchased and refurbished by Botala for ~A$750,000 when auctioned under instructions from the Court of Botswana and has been legally transferred to Botala.
This strategic acquisition secured in-house access to essential drilling, well testing and development equipment. It also enabled recruitment of key, experienced operators from the original contractor, many trained in the US and now residing in villages near the Serowe Project. The move ensures Botala can manage its entire wellfield development internally, offering significant savings on leasing, mobilisation, demobilisation and operational expenses.
Equipment purchased includes cementing and stimulation machinery; gas/water separation units; drilling and work-over rigs; specialised pumps and instrumentation; fuel and water tankers, trailers, loaders, excavators, spares, drill pipes, rods and field tools.
This new capability allows Botala to build a multi-skilled, locally based contract team for drilling, equipping and wellfield operations, including cementing and gas flow stimulation.
Strategic Outlook
The acquisition delivers Botala several key advantages in respect of the drilling, testing and development of wells, such as:
a. Full operational independence from third-party contractors.
b. Significant cost reductions in undertaking work utilising the equipment.
c. Scalability across exploration and production programmes.
d. A skilled, local workforce on flexible contracts.
Kris Martinick, Chief Executive Officer stated: “Our progress at Serowe has been immense. The strategic focus on the Western Flank has already delivered certified gas volumes sufficient to underpin our Phase-1 LNG production. Integration with the highly prospective Eastern Flank, creates an opportunity for a single, large-scale CBM field that supports long-term gas exports. With full control of our drilling operations and the ability to drill at around A$100,000 per well, we believe we now have a sustainable, low-cost model that can be rapidly scaled up as we move towards first production. This positions us as a major gas supplier in Southern Africa, with the capability and partnerships needed to deliver value to shareholders and energy security to the region.”
