TomCo Energy Plc (LON:TOM) is to raise £500,000 to test a new technology to unlock the oil shale at its Holliday project in Utah.
TurboShale, a new company set up by TomCo, recently acquired the patents to a radio frequency-based process that can extract oil from oil shale.
TomCo said today it would fund a 4-6 months trial of TurboShale with the aim to prove that Holliday can be a commercial project.
A company called JRT developed the RF technology and tested it in the early eighties on a site less than 20 miles from the Holliday block.
In return for paying the £500,000 cost of the trial, TomCo will increase its stake in TurboShale to 80%, with JRT holding the remainder.
JRT was co-founded by Ray Kasevich, previously the technical director at Raytheon and the lead scientist on the earlier trial (the BART programme), which was carried out in conjunction with Texaco and Badger
BART showed the process was scalable, produced high-quality oil with little or no water at a cost of between US$4.50 – US$9 per barrel, said TomCo.
Work was stopped then, however, due to the rock-bottom oil price at the time.
Green River Formation
Holliday is estimated to contain 126mln barrels of oil and is located on the Green River Formation, one of the world’s largest oil shale reserves.
TomCo has been trying to get it into production since 2010.
Originally, the plan was to use Red Leaf Resources’ EcoShale system, which was being tested by Total at a block adjacent to Holliday.
Total decided not to proceed in 2016, since when TomCo has been looking at other technologies.
Oil shale/shale oil
Oil shale is completely different from shale oil.
Shale oil is trapped in rocks and needs to be stimulated through fracking and horizontal drilling to be released.
Oil shale deposits, though, comprise a substance called kerogen within sedimentary rocks.
At the right temperature, kerogen forms hydrocarbons (oil, gas, kerosene etc) and to get oil from oil shale needs the rock either be heated at source or mined and then treated.
The cost of this process has been one of the barriers to the development of oil shale deposits.
TomCo hopes that if the trial at Holliday proves a success it can license out the technology to other oil shale deposits.
Andrew Jones, chairman, said: "This renaissance of TomCo promises very exciting times ahead.
“We do believe that we now have a viable and preferable technology, which will allow TomCo to commercialise its oil shale assets, whilst developing further revenue opportunities through licensing and royalty agreements.”
Shares have more than doubled this week and added a further 11% to 5.5p.