Botala Energy Ltd. announced that the company's 2C Contingent Resources to 454bcf from 317bcf (best estimate), ahead of expectations. Increased resource solidifies the potential of 100% owned CBM Project in Botswana. Updated resource positions Botala as a key player in the Southern African gas market and aligns with vision to address the region's energy needs.

This stems from a combination of depleting gas reserves and increasing demand across the region. Key existing suppliers, such as Sasol, have publicly announced they will have to cease supply to traders and industrial users by mid-2026 due to: Depletion of their gas reserves in Mozambique. Strategic shift to retain more gas output for their own operations.

These announcements have raised alarm across sectors that heavily rely on natural gas, including manufacturing, healthcare, and households. The gas shortage threatens to disrupt industrial operations, power generation, and domestic energy supply, with possible severe economic and social consequences. The potential impact of this gas shortage is significant.

In addition, the Botswana government has identified the requirement to generate 100MW of electricity from CBM powered gas generating facilities. Botala aims to supply most, if not all, of this CBM. Botala's substantial CBM resources provide a viable solution to this impending gas shortfall.

Impact on the Southern African Power Pool (SAPP): Eskom's issues have affected the broader SAPP grid, as South Africa is a significant electricity exporter within the region. The decline in reliable electricity production has strained the grid, impacting power supplies to neighbouring countries and undermining regional energy security. Government and Policy challenges.

Efforts to transition to more reliable and sustainable energy sources have been slow. The Society of Petroleum Engineers' PRMS certification process is a rigorous framework that ensures the accuracy and reliability of resource estimates. The key steps involved in moving from a 2C contingent resource to a 2P reserve include: Further Exploration and Drilling: Conducting additional drilling to gather more data and confirm the extent and quality of the resources.

Production Testing: Carrying out extended production tests to demonstrate the commercial viability of the resources. Economic Feasibility: Conducting detailed economic analyses to ensure that the project can be developed profitably under current market conditions.