TomCo Energy PLC (LON:TOM) has raised £1.5mln of new capital from a share placing, with the funds earmarked for the Greenfield Energy joint venture in Utah.
The group sold 375mln new shares at a price of 0.4p each, with the number of new shares representing 136% of its current share capital.
The placing was arranged by broker Turner Pope Investments and investors will additionally receive one share warrant for every two placing shares they purchase – exercisable at 0.8p over the next two years.
TomCo has established the Greenfield Energy LLC joint venture vehicle with engineering partner Valkor LLC to pursue the development of an oil sands plant.
The plan is for Greenfield to take over the operation of the Petroteq oil sands plant (POSP) at Asphalt Ridge, in Utah. It comes after the results of a pre-FEED study provided sufficient comfort for both parties.
"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,” John Potter, TomCo chief executive said in a statement.
"We believe there is significant potential upside and look forward to keeping shareholders updated as we move forward with the upgrades to the POSP."
The injection of funds into Greenfield is expected to enable equipment upgrades and development of POSP, to facilitate a proposed test programme.
Initially, Greenfield is taking control of the POSP for a year in which time it will carry out a programme of small scale test operation with the results expected to guide the design of a larger commercial-scale plant. The upgrades aim to lift POSP’s capacity to 500 barrels of oil per day.
The upgrade will also see the installation of technology from fellow AIM-listed firm Quadrise Fuels International PLC (LON:QFI), with the Quadrise MSAR technology being used to assist the production of low sulphur heavy oils from oil sands.