TomCo Energy PLC (AIM:TOM, FRA:NI41) is to take full ownership of the Greenfield Energy LLC vehicle in a share-based transaction with partner Valkor.
The deal follows a successful phase of trial work using Petroteq Energy Inc. (TSX-V:PQE, OTC:PQEFF)'s existing oil sands plant at Asphalt Ridge, in Utah, and as Greenfield advances engineering design programmes for new facilities.
"We are very excited by the future potential of Greenfield,” TomCo chief executive John Potter said. “We now have full control of Greenfield which affords TomCo's shareholders the opportunity to fully benefit from Greenfield's significant potential."
Nothing is to be paid upfront by TomCo. A deferred consideration of shares, representing 29% of TomCo’s present issued share capital or up to £3.1mln, will become due in the future upon Greenfield receiving funds, loan or credit facility for the construction of an oil sands processing facility (as envisaged in a FEED study).
Due diligence is presently underway for a potential site from Tar Sands Holdings II LLC, which owns some 760 acres of land and certain non-producing assets in Utah’s Uintah County. Greenfield intends to develop the site for the mining of oil sands and construction of a commercial scale processing plant.
A FEED study envisages a proposed plant to comprise an initial 5,000 bopd capacity, with a possible expansion to 10,000 bopd.
Potter, in Thursday’s statement, highlighted: “The due diligence undertaken so far on the site has been positive such that it appears ideally suited for the construction, subject to funding, of Greenfield's first commercial scale plant, with significant resources for potential exploitation. Additionally, the recent results of the FEED study were most encouraging.
"Greenfield's focus remains on completing the requisite due diligence on TSHII and the site and progressing the necessary funding package in order to, inter alia, pursue construction of an initial 5,000 bopd facility at the earliest opportunity.