TomCo Energy PLC (AIM:TOM) told investors that drilling is now slated to start in March for a programme of three wells designed to unlock a ‘self-funding’ resource for its efforts in Utah.
Via subsidiary Greenfield Energy, the company has been granted permits to drill by the Utah Division of Oil, Gas and Mining at the Tar Sands Holdings II LLC (TSHII) site which is host to, among other things, the company’s planned heavy oil processing plant.
Conventional oil wells will in the meantime be drilled by Greenfield subsidiary AC Oil LLC next month, as the company aims to opportunistically generate revenues from conventional hydrocarbons in the area.
"We continue to make significant progress with our plans for the TSHII site and we look forward to the drilling of the exploration wells in March, utilising some of the proceeds from our recently completed placing,” said TomCo chief executive John Potter.
“In parallel, we are progressing the previously announced due diligence exercise being undertaken by a financing party currently interested in backing our plans for Greenfield, together with other matters in relation to the TSHII site.”
TomCo also noted that TSHII, presently 10% owned by Greenfield, has separately agreed to lease out an existing refinery facility on the TSHII property which was previously earmarked for demolition as the Greenfield project advances.
The new tenant intends to develop a 10,000 barrels of oil per day refinery on the site and will have two years to do so before potentially forfeiting the lease.
TSHII is being paid US$10,000 per month in rent along with a US$3 per barrel production rent per barrel of produced hydrocarbons.
Greenfield acquired 10% of TSHII in an option deal which gave it the right to acquire 100% in the future.