How Botala Energy’s Serowe Project Could Transform Southern Africa’s Gas Supply by 2026

Advancing a Regional Energy Solution

Botala Energy Ltd (ASX – BTE) is making steady progress on its 100%-owned Serowe Coal Bed Methane (CBM) Project in Botswana, a venture poised to become a key domestic gas supplier for Southern Africa. With the region facing a significant gas supply shortfall anticipated from mid-2028, Botala’s project is strategically positioned to fill this looming gap with locally produced, lower carbon energy.

The company’s phased development strategy is methodical and risk-managed, focusing initially on Project Pitse, a multi-well pilot designed to validate reservoir performance and operational feasibility. The pilot wells, Serowe-3.1, 3.4, and 3.5A, have been instrumental in gathering low-cost, high-value data on reservoir behaviour, dewatering, and pressure management, all critical inputs for the upcoming Bankable Feasibility Study (BFS).

Strategic Investment from Botswana’s MDCB

A major milestone for Botala this quarter was the signing of a non-binding Term Sheet with the Mineral Development Company of Botswana (MDCB), which plans to increase its investment in the Serowe CBM Project by 40% to approximately A$4 million. This deal secures MDCB a 15% equity interest and a 1% royalty on future LNG production, reinforcing strong local government support and aligning the project with Botswana’s broader economic and energy security objectives.

The MDCB’s involvement not only provides crucial funding for ongoing drilling, testing, and feasibility activities but also signals confidence in the project’s commercial viability following comprehensive due diligence and receipt of key regulatory approvals. Importantly, this investment will not dilute Botala Energy’s listed share capital, preserving shareholder value while deepening in-country partnerships.

Looking Ahead to 2026 and Beyond

With preparatory work largely complete, Botala is gearing up for a busy early 2026 schedule that includes perforation and stimulation of additional wells (Serowe-3.2, 3.3, and 3.5B) to establish sustainable commercial flow rates. These activities are essential for resource recertification and finalising the BFS, which will underpin the design of a modular LNG production facility targeting up to 3.5 petajoules per year over two decades.

Botala’s approach remains disciplined, prioritising operational stability and data confidence before scaling up infrastructure. The company also plans to drill new exploration wells to expand its resource base, with 95% of its exploration acreage still undrilled, highlighting significant upside potential.

Financial and Environmental Stewardship

As of 31 December 2025, Botala held A$323,000 in cash, supplemented by available financing facilities totaling over A$1.1 million. The company reported no gas production during the quarter but continues to invest in exploration and evaluation activities. Botala also emphasises strong environmental, social, and governance (ESG) practices, with no reported injuries and ongoing compliance with local and international regulations. Its commitment to sustainable operations aligns with the project’s goal of delivering lower carbon energy to the region.