TomCo Energy PLC (AIM:TOM, FRA:NI41) said its Greenfield vehicle completed due diligence on the proposed site of its oil project in Utah and extended the deadline to complete.
The new deal extends the option to acquire a 10% interest in the site for US$2mln to November 15 from an original deadline of October 1st.
Funding efforts are now underway and Greenfield is in talks with a third party that’s invested in an in-situ oil production programme, targeting deeper oil resources on adjacent land.
The potential partnership would give Greenfield funds to drill five wells on the land along with associated infrastructure plus enough upfront funds to acquire its stake in the property with the advance repaid from oil sales proceeds.
"During the due diligence exercise, it has become apparent that there is the potential for deeper resources than those Greenfield envisages utilising, thereby opening up further potential funding routes,” said chief executive John Potter.
“Greenfield is now focused on commercial negotiations with the third party concerned in order to seek to secure the funding for the initial acquisition.”
Greenfield paid a further US$200,000 deposit to extend the deadline, taking total deposits to US$500,000 which are deducted from the US$2mln transaction for 10% of the property.
Greenfield will have the exclusive option to acquire the remaining 90% for an additional cash consideration up to 31 December 2022.
Greenfield is exploring various other funding options to potentially achieve the acquisition of 100% whilst continuing other preparatory work.
The site has existing infrastructure, plant and equipment as well as an existing Large Mine Permit that could facilitate future development by Greenfield.