Botala Energy has raised A$3 million through an oversubscribed placement to fully fund drilling and flow testing at its Serowe coal bed methane project this quarter, advancing its commercial gas ambitions.
- A$3 million raised via oversubscribed placement at A$0.05 per share
- Board to participate with A$1.2 million subject to shareholder approval
- Funds allocated to drilling Serowe-3.5B well and flow testing this quarter
- Placement includes unlisted options exercisable at 10c with two-year expiry
- Progressing Bankable Feasibility Study and potential A$4 million MDCB investment
Strong Capital Raise to Fuel Next Phase
Botala Energy Ltd has successfully secured firm commitments to raise A$3 million through an oversubscribed placement priced at 5 cents per share. This capital injection is designed to fully fund the drilling and flow testing of its first targeted commercial production well, Serowe-3.5B, scheduled for this quarter. The placement attracted strong support from both new and existing sophisticated investors, signalling confidence in Botala’s strategy and project potential.
Board’s Skin in the Game
Notably, the company’s board has committed to participate in the placement to the tune of A$1.2 million, pending shareholder approval. This move underscores management’s belief in the project’s prospects and aligns their interests with those of shareholders. The new shares issued will rank equally with existing shares, and investors will also receive unlisted options exercisable at 10 cents within two years, providing additional upside potential.
Advancing Commercialisation and Feasibility
The funds raised will be applied not only to the drilling and stimulation of the Serowe-3.5B well but also to support maiden reserve certification and progress the Bankable Feasibility Study (BFS). These steps are critical in de-risking the project and moving closer to commercial gas flows. Botala’s CEO Kris Martinick emphasised that achieving commercial gas flows is a key milestone in their CBM-to-LNG plan, which aims to address Southern Africa’s growing gas supply deficit.
Strategic Partnerships and Regional Impact
In addition to the placement, Botala is working to finalise a proposed investment of approximately A$4 million from the Minerals Development Company of Botswana (MDCB), which remains non-binding at this stage. This partnership could provide further financial and strategic support. The company has also secured a binding letter of intent from South African steelmaker Scaw Metals to purchase up to 4.7 petajoules annually, highlighting the regional demand for gas and Botala’s role in meeting it.
Looking Ahead
With drilling and flow testing imminent, Botala is positioned to deliver critical data that will influence the project’s trajectory and valuation. The success of the Serowe-3.5B well will be a pivotal moment, potentially unlocking significant value for investors and advancing Southern Africa’s energy transition.
Bottom Line?
Botala’s latest capital raise sets the stage for a decisive quarter that could redefine its commercial prospects and regional gas supply role.
Questions in the middle?
- Will the Serowe-3.5B well achieve commercial gas flows as planned?
- How will shareholder approval of the board’s placement participation impact investor sentiment?
- What are the prospects and timing for finalising the MDCB investment?