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TXO reveals several key negotiations are underway

Last updated: 12:17 21 Jan 2015 GMT, First published: 13:17 21 Jan 2015 GMT

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TXO (LON:TXO) chairman and chief executive Tim Baldwin told investors that all the company’s investee companies are in negotiations either for new investment or new contracts.

Baldwin said expects TXO will be in a position to make further announcements shortly.

At the top level, TXO Plc has itself been in talks with a UK based clean-tech investment fund and a large international bank.

These early stage discussions are with a view to expanding TXO’s existing and future investee companies, and TXO says the board is hopeful and optimistic of a positive outcome.

A Canadian investor has made an offer to buy TXO’s stake in Oil Recovery Services (ORS), which has a joint venture with Athabasca Resources, for $400,000 in cash and royalties. This proposal is part of a proposed $1mln investment in ORS.

TXO said the board is currently considering the offer.

Another business Oil Tech Royalties Inc (OTR) is in talks with a third part over a potential €300,000 investment for a 3% stake in the company – which, if concluded, would value TXO’s 30% stake at €3mln.

TXO said the potential injection of capital would be used for working capital, and to further sales and marketing efforts.

Meanwhile, TXO’s 35.67% owned investee Grand Bahama Group (GBG), which is involved in the transport and reprocessing of oil contaminated water.

A contract was awarded to a BGB subsidiary in December with a large commodity broker for the reprocessing of 125,000 barrels of contaminated water and the remediation of land where oil had been stored.

An initial 22,500 barrels have now been removed and partially reprocessed to achieve the first milestone under the contract. A fee of US$1mln will be received for the work, and the job is scheduled to be completed in the second half of 2015.

Once processed the GBG business will be granted title to the recovered oil.

The GBG subsidiary has also completed work under a ‘used oil’ contract, announced last April, and TXO has said a verbal confirmation of a new separate contract has been received as well. 

This latest possible contract is expected to involve a fee as well as a share of proceeds from the sale of recovered oil. It is also anticipated that there will be several further phases under contract and TXO said proposals are being put to the customer accordingly.

In reference to TXO’s stake in Tasmania Oil and Gas (TOG), which is tied up in a legal dispute, the company said it has been approached by other shareholders of TOG which have expressed an interest in acquiring the stake.

Baldwin, in the statement, said: “TXO is greatly encouraged by the fact that GBG and all other investee companies continue to make excellent progress. 

“We remain confident that with the further investment being offered to the investee companies as detailed above, TXO will meet its targets for the financial year." 

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