TIDMTOM
RNS Number : 1661Q
TomCo Energy PLC
17 June 2020
17 June 2020
TOMCO ENERGY PLC
("TomCo" or the "Company")
Placing, JV agreement with Valkor and Grant of Options
TomCo Energy plc (AIM: TOM), the oil exploration, development
and technology group focused on using innovative technology to
unlock unconventional hydrocarbon resources, is pleased to announce
that it has:
-- Raised GBP1,500,000 (gross) by way of a placing ("Placing")
at a price of 0.4 pence per share
-- Received a preliminary draft of the Pre-Feed study on
Petroteq Energy Inc's ("Petroteq") closed loop system for use in
the recovery of oil from oil sands (the "Oil Sands Technology")
-- Established a joint venture company, Greenfield Energy LLC
("Greenfield"), with Valkor LLC ("Valkor") to pursue the
development of an oil sands plant
- Valkor has entered into an agreement with Petroteq (the "Work
Order"), which will be transferred to Greenfield, for Valkor to
take over the management and operations of Petroteq's existing oil
sands plant at Asphalt Ridge, Utah (the "POSP"), pursuant to which
Greenfield will undertake certain upgrades to the POSP and run
associated tests to demonstrate the POSP's commerciality
-- Granted, in aggregate, 14,000,000 options to the Directors
Placing
The Company is pleased to announce that it has raised
GBP1,500,000 (gross) pursuant to the Placing, through the issue of
375,000,000 new ordinary shares of no par value in the Company
("Ordinary Shares") ("Placing Shares") at a price of 0.4 pence per
Placing Share ("Placing Price") through Turner Pope Investments
(TPI) Ltd ("TPI"), the Company's broker. The Placing Shares
represent approximately 136% of the Company's current issued share
capital.
Every two Placing Shares have one warrant attached, resulting in
the issue of 187,500,000 warrants, with each warrant having the
right to acquire one new Ordinary Share at an exercise price of 0.8
pence for a period of two years from the date of the admission of
the Placing Shares (the "Warrants"). If the Warrants are exercised
in full, this would result in the issue of 187,500,000 new Ordinary
Shares, which would represent approximately 28.8% of the Company's
issued share capital as enlarged by the Placing.
The net proceeds of the Placing, together with the Company's
existing cash resources, will be used to provide sufficient funds
to Greenfield in order to, inter alia, undertake the POSP upgrades
and complete the associated tests, together with funding TomCo's
contribution to the FEED and to provide general working capital to
the Group.
The Company has also issued 22,500,000 warrants to TPI, giving
them the right to acquire such number of new Ordinary Shares at an
exercise price equal to the Placing Price for a period of two
years.
Pre-FEED study
Further to the announcement of 19 March 2020, the Company is
pleased to announce that it has received a preliminary draft of the
Pre-FEED study from Valkor, which seeks to demonstrate the economic
viability of the Oil Sands Technology. T he Board of TomCo believes
that the draft Pre-FEED study indicates that the use of the Oil
Sands Technology is likely to be economically viable.
The draft Pre-FEED study sets out the design criteria, including
the environmental and regulatory compliance and codes and standards
required, the product specifications of the feed stock, sales oil
and effluent solids, the process systems, the safety systems, the
civil and structural requirements and the mechanical, electrical
and instrumentation and control requirements, for a commercial
scale 10,000 barrels of oil per day ("bopd") oil sands plant.
Valkor Joint Venture
The results of the draft Pre-FEED study have provided the TomCo
Board with sufficient comfort to enter into a binding joint venture
agreement with Valkor (the "JV Agreement") to form and regulate the
operations of Greenfield, a newly incorporated Utah registered
company that will seek to pursue the development of a plant
utilising the Oil Sands Technology. Greenfield is equally owned by
TomCo and Valkor, with a director from each being appointed to
Greenfield's board, being John Potter and Steve Byle
respectively.
Under the terms of the JV Agreement, the Company will provide
funding to Greenfield, subject to being satisfied as to the use of
such funds, of up to US$1.5 million, to enable Greenfield to be
able to complete, inter alia, the required upgrades to the POSP and
to undertake the proposed test programme as detailed below,
together with funding TomCo's contribution to the FEED. Valkor will
provide the engineering knowhow pertaining to the Oil Sands
Technology required to complete the changes and will undertake the
work detailed in the Work Order. Valkor will provide the services
for the completion of the pre-FEED and the FEED up to a value of
US$375,000, along with their management and operating experience
and any other information and other valuable resources owned by
and/or controlled by Valkor. In addition, Valkor has granted to
Greenfield a licence to the Quadrise MSAR(R) technology, for the
processing of heavy sweet crude into heavy fuel oil for which it
has a right to an exclusive licence, for the use on all future
plants that are majority owned and operated by Greenfield in
Utah.
Pursuant to the Work Order, Valkor has recently entered into an
agreement to take over the management and operations of the POSP,
for an initial 12 month period, to ensure the proposed upgrade
works, as detailed below, can be completed in as short a period as
possible. With the establishment of Greenfield, Valkor will now
transfer the Work Order to it.
Pursuant to the Work Order, Greenfield intends to utilise the
existing knowhow of Valkor to upgrade the POSP, in order to carry
out small scale test operations, so as to assist with the
determination of the design of a scaled version of a commercial
scale plant. The most significant upgrade to the POSP will be the
addition of the Quadrise MSAR(R) process, which will seek to
further process the oil into a premium, heavy fuel oil product for
retail sale as IMO 2020 compliant bunker fuel or as No. 6 diesel
for heavy machinery. The aim of the upgrade works is to increase
the POSP's capacity to 500 bopd and to run it for a sufficient
period of time for the design to be reviewed and the operations
verified by third party engineers. On completion of this work, it
is intended that a FEED will be completed for a commercial scale
(up to 10,000 bopd) oil sands plant.
In addition, Valkor has entered into a new lease, effective from
1 July 2020 and for a term of 12 months, with the landlord of the
POSP site, which will allow Valkor access to the land to be able to
operate the POSP to undertake the necessary upgrades and tests as
well as to mine for feedstock for the POSP. Pursuant to the lease,
in addition to a monthly rent, the landlord will be entitled to
certain royalty payments in respect of any commercial produce from
the POSP and/or associated operations. Valkor has also granted
Greenfield the right to occupy the site to complete the upgrade
works and operations of the POSP proposed under the Work Order.
Under the JV Agreement, Valkor has granted a licence, for the
use on all future plants that are majority owned and operated by
Greenfield in Utah, to its existing Intellectual Property ("IP")
and knowhow to Greenfield of the processing of oil sands into heavy
fuel oil. All modifications and improvements to the IP developed in
Greenfield, including in relation to the upgrade of the POSP, will
belong to Greenfield, which the Board of TomCo believes will allow
Greenfield to develop its own oil sands plant, subject to
identifying a suitable location. Greenfield will seek to identify
and secure suitable locations in Utah for a commercial scale (up to
10,000 bopd) oil sands plant.
Further information on the POSP, the Oil Sands Technology and
the Quadrise MSAR(R) process
The POSP and Oil Sands Technology has been in development by
Petroteq for a number of years, to determine a clean and
environmentally friendly method of producing heavy fuel oil from
oil sands. The system contains several parts: a front end, where
ore is crushed and mixed with solvent; a middle section, for the
separation of liquids and sand; and a back end to recover the
solvent for reuse, produce a saleable bitumen product and return a
hydrocarbon-free sand.
In 2018, Petroteq entered into a management services agreement
with Valkor, to bring Valkor's process engineering experience in to
help the design process. The work began with a redesign of the back
end to increase reliability and capacity, resulting in a 12 API,
ultra-low BS&W, heavy oil product with almost no sulphur.
Further work continued through to the end of 2019, to improve the
middle section efficiency for sand and oil separation while
reaching steady production at rates as high as 300 bopd.
In order to complete the necessary upgrade to the POSP needed to
be able to demonstrate its commerciality, as well add the Quadrise
MSAR(R) process, and to be able to run the necessary tests, Valkor
has taken over the management and operations of the POSP under the
Work Order. Any IP developed as result of the upgrade and from the
tests to be run will be the property of Greenfield.
The inclusion of the Quadrise MSAR(R) process, developed by
Quadrise Fuels International plc, is intended to demonstrate the
economic opportunity presented by the low sulphur, heavy oil
produced by the oil sands plant. The heavy oil is mixed with water
and chemicals to produce an emulsified heavy fuel oil, expected to
qualify for use as an IMO 2020 low sulphur fuel oil directly from
the plant, meaning no further refinement will be needed. It may
also find local sale as a diesel replacement for medium speed
engines, boilers and other heavy machinery. This type of
low-sulphur, heavy oil-based product has come into high demand with
changing regulation and reduced production of heavy oil around the
world.
Grant of Options
The Company announces it has granted options ("Options") to
subscribe for, in aggregate, 14,000,000 new Ordinary Shares to the
Directors.
The Options have been granted to the Company's Executive
Director, John Potter, under an Enterprise Management Incentives
Share Option Plan ("EMI Scheme") and to the Company's Non-executive
Directors under an unapproved scheme and have an exercise price of
0.6 pence per share, being the closing price on the date of
grant.
Following this grant of the Options, the Directors will be
interested in the following number of Ordinary Shares and
options:
Director Number of Ordinary Shares Number of Options granted Number of existing options held
Stephen West 3,076,923 4,000,000 -
John Potter 26,500 6,000,000 1,714,285
Alexander Benger 18,293 2,000,000 380,952
Malcolm Groat 11,887 2,000,000 380,952
The Options are exercisable for five years from the date of
vesting and will vest on the following basis:
-- One-half on or after 30 November 2020; and
-- One-half on or after 31 May 2021.
The 14,000,000 Options represent, in aggregate, approximately
5.1% of the Company's current issued share capital and 2.2% of the
Company's issued share capital as enlarged by the Placing.
Admission
The Placing is subject to normal conditions including, inter
alia, admission of the Placing Shares to trading on AIM.
The Placing Shares will rank pari passu with the existing
Ordinary Shares and application will be made for the Placing Shares
to be admitted to trading on AIM ("Admission"). It is expected that
Admission will become effective and dealings in the Placing Shares
will commence at 8.00 a.m. on 23 June 2020.
Following Admission, the Company's issued share capital will
consist of 650,759,235 Ordinary Shares with voting rights. There
are no Ordinary Shares held in treasury. The figure of 650,759,235
may be used by shareholders, following Admission, as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change to their
interest in, the share capital of the Company under the Financial
Conduct Authority's Disclosure Guidance and Transparency Rules.
John Potter, CEO, commented: "We are delighted that the
preliminary results of the Pre-FEED study are favourable, and
following completion of the Placing, we can now move forward with
our joint venture with Valkor, to seek to demonstrate the
commerciality of the Oil Sand Technology.
"We believe there is significant potential upside and look
forward to keeping shareholders updated as we move forward with the
upgrades to the POSP."
Enquiries:
TomCo Energy plc
Stephen West (Chairman) / John Potter (CEO) +44 (0)20 3823 3635
Strand Hanson Limited (Nominated Adviser)
James Harris / Richard Tulloch / Jack Botros +44 (0)20 7409 3494
Turner Pope (Broker)
Andy Thacker / Zoe Alexander +44 (0)20 3657 0050
For further information, please visit www.tomcoenergy.com .
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014.
The notification below, made in accordance with the requirements
of the EU Market Abuse Regulation, provides further detail:
NOTIFICATION AND PUBLIC DISCLOSURE OF TRANSACTIONS BY PERSONS
DISCHARGING MANAGERIAL RESPONSIBILITIES AND PERSONS CLOSELY
ASSOCIATED WITH THEM
1 Details of the person discharging managerial responsibilities
/ person closely associated
a) Name Stephen West
-------------------------- -----------------------------------------------
2 Reason for the notification
---------------------------------------------------------------------------
a) Position/status CHAIRMAN
-------------------------- -----------------------------------------------
b) Initial notification Initial
/Amendment
-------------------------- -----------------------------------------------
3 Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
---------------------------------------------------------------------------
a) Name TomCo Energy plc
-------------------------- -----------------------------------------------
b) LEI 213800FEW97Y1CD38B95
-------------------------- -----------------------------------------------
4 Details of the transaction(s): section to be repeated for (i)
each type of instrument; (ii) each type of transaction; (iii)
each date; and (iv) each place where transactions have been
conducted
---------------------------------------------------------------------------
a) Description of the Ordinary shares of no par value
financial instrument,
type of instrument ISIN: IM00BZBXMN96
Identification code
-------------------------- -----------------------------------------------
b) Nature of the transaction Grant of share options
-------------------------- -----------------------------------------------
c) Price(s) and volume(s) Price(s) Volume(s)
-------------------------- ---------------------------- -----------------
Exercise price of 0.6 pence 4,000,000 Options
per option
-------------------------- ---------------------------- -----------------
d Aggregated information N/A - single transaction
- Aggregated volume
- Price
-------------------------- -----------------------------------------------
e) Date of the transactions 16 June 2020
-------------------------- -----------------------------------------------
f) Place of the transactions Outside a trading venue
-------------------------- -----------------------------------------------
1 Details of the person discharging managerial responsibilities
/ person closely associated
a) Name JOHN POTTER
-------------------------- -----------------------------------------------
2 Reason for the notification
---------------------------------------------------------------------------
a) Position/status CEO
-------------------------- -----------------------------------------------
b) Initial notification Initial
/Amendment
-------------------------- -----------------------------------------------
3 Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
---------------------------------------------------------------------------
a) Name TomCo Energy plc
-------------------------- -----------------------------------------------
b) LEI 213800FEW97Y1CD38B95
-------------------------- -----------------------------------------------
4 Details of the transaction(s): section to be repeated for (i)
each type of instrument; (ii) each type of transaction; (iii)
each date; and (iv) each place where transactions have been
conducted
---------------------------------------------------------------------------
a) Description of the Ordinary shares of no par value
financial instrument,
type of instrument ISIN: IM00BZBXMN96
Identification code
-------------------------- -----------------------------------------------
b) Nature of the transaction Grant of share options
-------------------------- -----------------------------------------------
c) Price(s) and volume(s) Price(s) Volume(s)
-------------------------- ---------------------------- -----------------
Exercise price of 0.6 pence 6,000,000 Options
per option
-------------------------- ---------------------------- -----------------
d) Aggregated information N/A - single transaction
- Aggregated volume
- Price
-------------------------- -----------------------------------------------
e) Date of the transactions 16 June 2020
-------------------------- -----------------------------------------------
f) Place of the transactions Outside a trading venue
-------------------------- -----------------------------------------------
1 Details of the person discharging managerial responsibilities
/ person closely associated
a) Name ALEXANDER BENGER
-------------------------- -----------------------------------------------
2 Reason for the notification
---------------------------------------------------------------------------
a) Position/status NON-EXECUTIVE DIRECTOR
-------------------------- -----------------------------------------------
b) Initial notification Initial
/Amendment
-------------------------- -----------------------------------------------
3 Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
---------------------------------------------------------------------------
a) Name TomCo Energy plc
-------------------------- -----------------------------------------------
b) LEI 213800FEW97Y1CD38B95
-------------------------- -----------------------------------------------
4 Details of the transaction(s): section to be repeated for (i)
each type of instrument; (ii) each type of transaction; (iii)
each date; and (iv) each place where transactions have been
conducted
---------------------------------------------------------------------------
a) Description of the Ordinary shares of no par value
financial instrument,
type of instrument ISIN: IM00BZBXMN96
Identification code
-------------------------- -----------------------------------------------
b) Nature of the transaction Grant of share options
-------------------------- -----------------------------------------------
c) Price(s) and volume(s) Price(s) Volume(s)
-------------------------- ---------------------------- -----------------
Exercise price of 0.6 pence 2,000,000 Options
per option
-------------------------- ---------------------------- -----------------
d) Aggregated information N/A - single transaction
- Aggregated volume
- Price
-------------------------- -----------------------------------------------
e) Date of the transactions 16 June 2020
-------------------------- -----------------------------------------------
f) Place of the transactions Outside a trading venue
-------------------------- -----------------------------------------------
1 Details of the person discharging managerial responsibilities
/ person closely associated
a) Name MALCOLM GROAT
-------------------------- -----------------------------------------------
2 Reason for the notification
---------------------------------------------------------------------------
a) Position/status NON-EXECUTIVE DIRECTOR
-------------------------- -----------------------------------------------
b) Initial notification Initial
/Amendment
-------------------------- -----------------------------------------------
3 Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
---------------------------------------------------------------------------
a) Name TomCo Energy plc
-------------------------- -----------------------------------------------
b) LEI 213800FEW97Y1CD38B95
-------------------------- -----------------------------------------------
4 Details of the transaction(s): section to be repeated for (i)
each type of instrument; (ii) each type of transaction; (iii)
each date; and (iv) each place where transactions have been
conducted
---------------------------------------------------------------------------
a) Description of the Ordinary shares of no par value
financial instrument,
type of instrument ISIN: IM00BZBXMN96
Identification code
-------------------------- -----------------------------------------------
b) Nature of the transaction Grant of share options
-------------------------- -----------------------------------------------
c) Price(s) and volume(s) Price(s) Volume(s)
-------------------------- ---------------------------- -----------------
Exercise price of 0.6 pence 2,000,000 Options
per option
-------------------------- ---------------------------- -----------------
d) Aggregated information N/A - single transaction
- Aggregated volume
- Price
-------------------------- -----------------------------------------------
e) Date of the transactions 16 June 2020
-------------------------- -----------------------------------------------
f) Place of the transactions Outside a trading venue
-------------------------- -----------------------------------------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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