TomCo Energy PLC (LON: TOM) have announced a share placing plan in an update on Tuesday in order to raise funds for its Utah operations.
TomCo holds nine separate Mineral Leases. All of these are in the Uinta Basin of Utah and together they cover a total land holding of 15,488 acres. They are also underlain by the Green River Shale Formation, which is the largest known oil shale deposit in the world.
Shares of TomCo currently trade at 0.69p seeing a 35.37% expected depreciation following the update. 4/12/19 11:28BST.
TomCo have seen a turbulent 2019, after the firm saw a H1 loss whilst it was developing its Utah project. The company reported a pretax loss of £524,000 which rose from the previous figure of £209,000.
TomCo, which develops technology for the extraction of unconventional hydrocarbons, has raised £925,000 by placing 142.3 million shares at 0.65 pence each. Every two placing shares also has one warrant attached, exercisable within two years at 1.5p.
The funding will be used in a new partnership with Houston-based energy services firm Valkor LLC to explore oil and tar sands across leases in the Uintah basin.
The firm said that its aims were to develop 3,000 barrels of oil per day per system from the oil and sands on TomCo’s leases.
The introduction to Valkor provides a number of exciting opportunities to the group. Valkor’s experience in the oil/tar sands space, given their work and relationship with Petroteq (OTCMKTS: PQEFF), provides TomCo with another avenue to potentially unlock the value of its leases,” said Chief Executive John Potter.
“I am looking forward to working with Steve Byle and the Valkor team as we develop our working relationship.”
TomCo’s main technology is TurboShale, which looks to use radio waves to extract oil from shale deposits. The company said following an analysis of the antenna of the technology, a number of changes have been recommended, which will be used in a new design.
The share crash is expected, following the share placing announcement, and TomCo will hope that they have similar success in allocating shares to Union Jack Oil who made the announcement late in November in order to raise funds for their West Newton projects.
Whilst shareholders respond to this news, they can expect long term benefits if TomCo get their execution correct and produce impressive results.
