Botala Energy Advances Serowe CBM Project with Key Well Milestones and CFO Appointment

Successful Drilling and Reservoir Evaluation at Serowe

Botala Energy Ltd (ASX:BTE) has marked a critical step in its Serowe Coal Bed Methane (CBM) Project in Botswana by successfully drilling and casing the central production well 3.5B to a depth of 449 metres. Wireline logging revealed approximately 13 metres of high-quality, bright, and well-cleated coal in the Serowe seam, surpassing the pre-drill estimate of 10 metres. This thicker-than-expected coal seam, consistent with neighbouring wells, reinforces confidence in the reservoir's geological continuity and quality across the Pitse Pilot area.

The well 3.5B is designed to evaluate gas deliverability from the targeted coal seams, forming the backbone of the Pitse Pilot phase aimed at de-risking reservoir performance ahead of commercial development.

Diagnostic Stimulation and Preparations for Gas Flow Testing

Following drilling, Botala completed a diagnostic stimulation injection test on well 3.5B, confirming the coal seam's ability to accept stimulation treatment, a crucial technical milestone. This success has paved the way for the next phase: extended gas flow testing designed to establish commercial gas production potential.

The stimulation process aims to enhance connectivity within the natural cleat system of the coal seam, allowing water to be progressively removed and gas to desorb and flow towards the well. This extended testing will measure gas and water production rates, reservoir pressure responses, and overall reservoir behaviour over time. The results are expected to feed directly into reserves certification, the Bankable Feasibility Study (BFS), and the design of a staged commercial development targeting 3.5 petajoules (PJ) of LNG annually.

Phased Development Strategy Targeting Regional Gas Shortage

Botala is advancing a modular LNG production pathway to address a looming gas supply shortfall in Southern Africa, particularly South Africa, which faces a so-called 'gas cliff' from mid-2028. The Serowe CBM Project holds a certified 2C Contingent Gas Resource of 471 PJ from less than 5% of its landholding, with 95% of acreage yet to be drilled, highlighting the project's substantial upside potential.

The current Pitse Pilot phase involves six wells, with production outcomes being assessed across various well performance scenarios. The next phase plans a nine-well cluster to supply a modular Cryobox® LNG production station, allowing Botala to validate operational assumptions and generate initial revenues before scaling up to a 108-well development estimated to cost US$200 million.

Strengthened Leadership and Financial Position

In a move to bolster its commercial and financial capabilities, Botala appointed Rory Burn as Chief Financial Officer effective 1 July 2026. Burn brings two decades of experience in energy finance and commercial roles, including senior positions at Woodside Energy and institutional banking exposure across multiple jurisdictions. His expertise is expected to support Botala’s transition from exploration to production and commercialisation.

As at 30 June 2026, Botala held A$1.52 million in cash, with net cash outflows from operations and investing activities reflecting ongoing project development. The company is engaged in advanced negotiations with several prospective development partners, although no binding agreements have yet been reached. Botala’s current funding runway is estimated at approximately 1.4 quarters, underscoring the importance of securing strategic partnerships or additional capital.

Environmental and Regulatory Compliance

Botala continues to prioritise environmental and occupational health and safety compliance under applicable laws in Botswana and Australia. The company maintains policies aimed at minimising environmental impacts and fostering a culture of safety. No work-related injuries were reported during the year, and Botala is preparing for potential future greenhouse gas emissions reporting as required under Australian legislation.

Next Steps for Serowe and Investor Watchpoints

Botala’s immediate focus is on controlled dewatering and extended gas flow testing of well 3.5B, monitoring reservoir pressure responses, and refining reservoir models. The results will be critical in assessing whether commercial flow rates can be sustained to justify large-scale development.

With the Pitse Pilot nearing its conclusion, the market will be watching closely for gas production breakthroughs, updated reserves certification, and progress on the BFS. The company’s ability to secure development partners and additional funding will also be key determinants of its path forward as it seeks to capitalise on Southern Africa’s pressing energy security needs.