TomCo Energy plc (LON:TOM), the US operating oil development group focused on using innovative technology to unlock unconventional hydrocarbon resources, has provided a further update with respect to the Company’s 100% owned subsidiary, Greenfield Energy LLC’s, potential acquisition of up to 100% of the ownership and membership rights and interests in Tar Sands Holdings II LLC, as announced on 9 June 2021.
The Company is pleased to announce that it has now satisfactorily completed its due diligence exercise on TSHII and the approximately 760 acres of land and certain non-producing assets in Uintah County, Utah, USA, owned by TSHII.
Pursuant to the terms of the Agreement and its subsequent amendment, Greenfield paid a non-refundable deposit of US$300,000 to secure an extended period to undertake due diligence and an exclusive option to acquire an initial 10% of the Membership Interests for US$2 million, payable on or before 1 October 2021 . The Agreement has now been further amended by the parties such that Greenfield can now exercise its right to acquire an initial 10% of the Membership Interests for cash consideration of US$2 million on or before 15 November 2021, in return for the payment of a further non-refundable deposit of US$200,000 which has been made.
Greenfield is currently in detailed discussions with a third party which is funding an extensive in-situ oil production programme adjacent to TSHII’s land, accessing resources deeper than Greenfield envisages mining for its purposes. As part of these discussions, the third party would potentially provide sufficient funding to Greenfield to enable up to five wells to be drilled on TSHII’s land along with the requisite infrastructure, with an associated ‘off-take’ agreement serving to provide sufficient upfront funding to enable Greenfield to acquire the initial 10% of the Membership Interests in TSHII to be repaid from the sale of the oil produced.
The extension of the abovementioned exclusive option to 15 November 2021 has been agreed to facilitate the ongoing funding discussions for the initial 10% acquisition, however there can be no certainty that a suitable agreement will be reached with this or another third party or as to the terms of any such funding.
As previously announced, the deposit, now totaling US$500,000, can be credited against the US$2 million cost of acquiring 10% of the Membership Interests, should Greenfield elect to proceed with the potential acquisition of the initial 10%. Assuming successful completion of the acquisition of the initial 10%, Greenfield will then have an exclusive option, at its sole discretion, to acquire the remaining 90% of the Membership Interests for additional cash consideration up to 31 December 2022, as detailed in the 9 June 2021 announcement.
Greenfield is exploring various other funding options to potentially achieve the acquisition of 100% of the Membership Interests, whilst continuing other preparatory work. However, there can be no certainty that Greenfield can secure the requisite funding.
Further announcements will be made as and when appropriate.
Commenting, John Potter, CEO of TomCo Energy, said : “We are delighted to have completed our comprehensive due diligence exercise on TSHII and its Site and that the Site appears ideally suited for the planned future construction, subject to funding, of Greenfield’s first commercial scale plant.
“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. Greenfield is now focused on commercial negotiations with the third party concerned in order to seek to secure the funding for the initial acquisition of 10% of the Membership Interests and progress its plans. We look forward to providing further updates in due course.”
