Botala Energy owns 100% of the Serowe coal bed methane project in Botswana. It sits next to South Africa, where industry faces a gas gap of more than 250 PJ a year from 2028. Gas has flowed continuously from Serowe-3.5B, Botala's first commercial production well, since 20 September. Scaw Metals has signed a binding letter of intent to buy up to 3.5 PJ a year of LNG. This A$1 million placement at 4.5 cents funds the flow test, a maiden Reserve and the BFS for first LNG.

Botala Energy (ASX and BSE: BTE) is the 100% owner and operator of the Serowe coal bed methane project in central Botswana. Its licences cover more than 6,000km².

Sproule has independently certified a 2C Contingent Resource of 454 BCF at Serowe. It comes from less than 5% of Botala's acreage. Contingent Resources are discovered gas that does not yet qualify as Reserves.

Botala also reports a Prospective Resource of 7,112 BCF, independently certified by Sproule and first released in its 2022 prospectus. This is Botala's information. Prospective Resources relate to undiscovered gas. They carry a risk of discovery and a risk of development. Further exploration is needed to determine whether recoverable gas exists.

Botala uses the same shallow coal bed methane wells as Queensland's established industry. Each stimulated well costs about A$500K. The new PL0089 licence adds 948km² north of the Pitse Pilot. Regional mapping reviewed by Sproule indicates the Serowe seam may thicken to about 14 to 16m there. This is interpreted and not yet confirmed by drilling.

Botala is in advanced discussions with the Minerals Development Company of Botswana (MDCB) on a direct equity investment of about A$3.6 million into the Serowe project.

• Gas is flowing now: Serowe-3.5B has flowed gas continuously since 20 September 2026. Flow is about 30Mscf/day (about 32GJ/day) under a 20% choke and still building. The commercial benchmark is 66Mscf/day (70GJ/day).
• A market that needs gas: Sasol's Pande-Temane fields in Mozambique supply roughly 85% to 99% of South African industry's gas. They are expected to be depleted by 2028. Industry forecasts a gap of more than 250 PJ a year.
• Offtake interest: Johannesburg industrial major Scaw Metals signed a binding letter of intent for the exclusive right to buy up to 3.5 PJ a year of LNG. It has an option to rise to 4.7 PJ a year. Scaw will also take part in the BFS.
• Certified resource: Sproule certified a 2C Contingent Resource of 454 BCF from less than 5% of Botala's acreage.
• Low cost, modular build: Each stimulated well costs about A$500K. Development scales in phases from a 0.25 PJ a year mini-LNG unit to a 12 PJ a year target. Botala expects first revenue in 2028.
• Catalysts ahead: Q4 2026 brings a sustained flow test on 3.5B, BFS completion for the Phase 2 mini-LNG plant, a target maiden Reserve and finalisation of the MDCB investment. Q1 2027 brings a Phase 2 investment decision, a resource update and priority exploration drilling.
• Aligned board: Board and management have invested more than A$6 million in the business since 2022.

Placement of up to approximately 22.2 million new shares at A$0.045 to raise up to A$1 million. The Company may accept oversubscriptions.

Discount

• 18% discount to the 5-day VWAP of A$0.0548

Director and cornerstone participation

Directors and a cornerstone investor have confirmed a minimum of A$350k. Director participation needs shareholder approval at a meeting planned for November 2026.

Structure

• Single tranche within the Company's Listing Rule 7.1 and 7.1A capacity
• Not underwritten
• New shares rank equally with existing shares and will be quoted on ASX
• Placement participants can also join the planned Share Purchase Plan on the same terms

Eligibility

Open to sophisticated and professional investors under s708(8), 708(10) or 708(11) of the Corporations Act. No prospectus will be lodged.

• Continued flow testing of Serowe-3.5B, Botala's first targeted commercial production well
• Target maiden Reserve certification with Sproule ERCE
• Stimulation of a second Pitse Pilot well, S3.3, targeting the second seam (Upper Morupule)
• Finalising the Bankable Feasibility Study for the first phase of LNG development
• Finalising agreements with MDCB for its equity investment
• General working capital and costs of the offer

Assumes A$1 million is raised

• Shares on issue now: 390,186,255
• New shares to be issued: 22,222,222
• Shares on issue after the offer: 412,408,477
• Market capitalisation after the offer at A$0.045: A$18.56m
• Unlisted options on issue: 70,950,000