TomCo Energy PLC - Placing to raise £3.5 million
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TOMCO ENERGY PLC
("TomCo", the "Company" or the "Group")
Placing to raise
Multi-site licence with Petroteq
TomCo Energy plc (AIM: TOM), the US operating oil development group focused on using innovative technology to unlock unconventional hydrocarbon resources, announces that:
· it has raised
· the Company's 50/50 joint venture with Valkor LLC ("Valkor"), Greenfield Energy LLC ("Greenfield"), has entered into a multi-site licence with Petroteq Energy Inc ("Petroteq") for the use of its closed loop system for use in the recovery of oil from oil sands (the "Oil Sands Technology") (the "Petroteq Licence" or "Licence").
The Company has raised
Every two Placing Shares have one warrant attached, resulting in the issue of 388,888,888 warrants, with each warrant having the right to acquire one new Ordinary Share at an exercise price of
The Company has also issued, in aggregate, 46,666,666 warrants to NSL, giving them the right to acquire such number of new Ordinary Shares at an exercise price of
NSL has entered into an agreement with TomCo (the "Placing Agreement") under which, subject to the conditions set out therein, NSL has been instructed by TomCo to use their reasonable endeavours to procure subscribers for the Placing Shares. The Placing Agreement includes customary provisions including that the Placing Agreement can be terminated, inter alia, if (i) there is a breach of any material warranty, or any of the other obligations on the Company which is material in the context of the Placing, and (ii) on any matter occurring or being likely to occur which, in the opinion of NSL, is (or will be if it occurs) likely to materially and prejudicially affect the financial position or the business or prospects of the Company or otherwise makes it impractical or inadvisable to proceed with the Placing.
Background to the Placing and update on the POSP
The Placing has primarily been undertaken to further progress the future plans of the Company's 50/50 joint venture with Valkor LLC ("Valkor"), Greenfield Energy LLC ("Greenfield").
As announced on
The work being undertaken by Greenfield pursuant to a work order originally between Valkor and Petroteq that has been assigned to Greenfield, under which Greenfield has taken over the management and operations of the POSP (the "Work Order"), to upgrade the capacity and improve the reliability of the POSP is progressing as planned, with the restart of the plant expected in the week beginning
In addition, as announced on
The Petroteq Licence
In order to provide Greenfield with access to Petroteq's Oil Sands Technology and to enable it to be utilised in future commercial scale oil sands plants to be developed by Greenfield, Greenfield has entered into a new non-exclusive multi-site licence with Petroteq. The Petroteq Licence has been granted in consideration for the funding that Greenfield has provided to date in respect of the upgrades to the POSP, being
This is an important step for Greenfield as it allows Greenfield to use Petroteq's Oil Sands Technology, which includes Petroteq's processes for the recovery of oil from oil sands, patents, other intellectual property and know-how, in any future oil sands plants to be built by Greenfield in
For any future oil sands plants built by Greenfield utilising the Petroteq Licence, a 5% royalty of net revenues received from oil products produced from oil sand resources at any oil sands plants will be payable by Greenfield to Petroteq.
The Board believes that a combination of the Petroteq Licence and know how being developed by Greenfield through the POSP upgrades and associated trials, will allow Greenfield to develop its own commercial scale oil sands plant, subject to securing a suitable location and funding.
Pursuant to the terms of the Licence, Greenfield is required to engage Valkor as the sole and exclusive provider of engineering, planning and construction services for all oil sand plants to be built by or under the direction of on behalf of Greenfield under the Licence.
Use of Proceeds
In order to facilitate the Company's future plans for Greenfield, which assumes successful POSP trials and the completion of the FEED study, the net proceeds of the Placing of approximately
Whilst there is no certainty that it can be secured, a potential site in
Whilst the Board is confident that the upgrades to the POSP and the associated trails and tests will demonstrate both the commerciality of the processes used in the Oil Sands Technology and that the proposed design for the commercial scale plant is suitable to the recovery of oil from oil sands, in the event that the outcome of the trials and tests are not as expected resulting in the Company choosing not to proceed with the securing of a site, the Company will consider its options with regards to the use of the funds raised through the Placing for that purpose and/or whether to continue to provide funding to Greenfield.
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 777,777,777 Placing Shares will commence at
Following Admission, the Company's issued share capital will consist of 1,451,412,012 Ordinary Shares with voting rights. There are no Ordinary Shares held in treasury. The figure of 1,451,412,012 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.
"We are confident that the upgrades to the POSP and the associated trials will demonstrate that the processes used at the POSP can be scaled to a commercial level and will allow Greenfield to move forward with finalising the FEED study.
"In addition, I am delighted that we have secured a multi-site licence with Petroteq for the use of its Oil Sands Technology. Coupled with obtaining funding to facilitate the securing of a site for a future plant in the
"We look forward to the restart of the POSP and reporting on further progress in due course."
TomCo Energy plc
Strand Hanson Limited (Nominated Adviser)
James Harris /
Novum Securities Limited (Broker)
IFC Advisory Limited (Financial PR)
Tim Metcalfe / Graham Herring +44 (0)20 3934 6630
For further information, please visit www.tomcoenergy.com.
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