Tlou Energy Limited (LON:TLOU) shares rose on Monday after the explorer updated investors on its drilling programme in Botswana.
The company said that two development pods – each containing three wells - have been completed and they are now de-watering prior to controlled gas flows.
This concludes the current programme of drilling and Tlou noted that its costs to date have been in line with budget.
It highlighted that strong gas indications were observed while drilling and initial water flow is similarly very encouraging.
READ: Tlou Energy positive as Botswana tender passes technical phase
"I am very encouraged by the recently completed drilling program and in particular the strong gas indications observed to date,” said Tony Gilby, Tlou managing director.
“Furthermore, the good initial water flow, which is higher than that previously observed at Selemo, is potentially indicative of good permeability and therefore potentially good gas flows in this geologically high-graded area.
“Completing the wells in a timely manner and on budget was a great effort by the field staff and they are to be commended for their achievements."
In a note to clients, analysts at SPAngel commented: “While some will say that this news is of limited importance need to remember that CBM wells are as much about ‘cookie cutter’ development drilling as much as they are about the productivity of the wells themselves.”
They added: “Consequently, this news is another positive step towards a successful commerciality. While the single largest step will be delivered in the shape of the wells' performance and deliverability, this s still an important step.”
In lunchtime trading, shares in Tlou Energy were 4.5% higher at 5.75p.
-- Adds analyst comment, share price --