TomCo Energy plc (LON:TOM), the US operating oil development group focused on using innovative technology to unlock unconventional hydrocarbon resources, has provided an update with respect to the Company’s now 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.
Pursuant to the terms of the Agreement, Greenfield paid a non-refundable deposit of US$200,000 to secure a 90 day period to undertake due diligence and an exclusive option for up to 120 days to acquire an initial 10% of the Membership Interests for US$2 million, payable on or before 1 September 2021. The Agreement has been amended 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 1 October 2021. A further non-refundable deposit of US$100,000 has been paid to secure this amendment. The total deposit of US$300,000 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 a 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.
TSHII owns approximately 760 acres of land and certain non-producing assets (the “Site”) in Uintah County, Utah, USA. Subject to securing the requisite funding and satisfactory due diligence, Greenfield plans to use the Site, if ultimately acquired via TSHII, for the future mining of oil sands and construction of a commercial scale processing plant utilising the findings of the FEED study, and other knowledge and experience gained from Greenfield’s operation of Petroteq Energy Inc’s existing oil sands plant at Asphalt Ridge, Utah. (the “POSP”). The Site has existing infrastructure, plant and equipment, together with an existing Large Mine Permit No. M0470032, that could facilitate any future development by Greenfield.
Greenfield is in advanced discussions with potential off-takers of both oil and sand from the Site and the results from the due diligence exercise, that is substantially complete, have so far has been positive. However, there can be no certainty that the due diligence exercise will ultimately be concluded or that Greenfield can secure the required funding to complete the acquisition of a 100% Membership Interest.
Additionally, in parallel with working to secure the required funding, Greenfield has recently begun working with Stantec Inc, a global design and delivery firm with extensive experience in the oil and gas and mining sectors, on mine planning for the Site, and with Netherland Sewell & Associates, global petroleum consultants, on a Site reserves report, together with other preparatory work.
Further announcements will be made as and when appropriate.
Commenting, John Potter, CEO of TomCo Energy, said: “Following our agreement with Valkor to acquire their 50% interest in Greenfield we have been aggressively pursuing the acquisition of the Site via TSHII. Whilst still ongoing, the due diligence undertaken on the Site to date has been positive such that it appears ideally suited for the construction, subject to funding, of Greenfield’s first commercial scale plant.
“Greenfield’s focus is now on both progressing the necessary funding package in order to, inter alia, secure the initial 10% Membership Interest and with the detailed planning to pursue construction of an initial 5,000 bopd facility at the earliest opportunity. We look forward to announcing further updates in due course.”
