TIDMTOM
RNS Number : 8699R
TomCo Energy PLC
02 July 2020
2 July 2020
TOMCO ENERGY PLC
("TomCo" or the "Company")
Placing and appointment of Joint Broker
TomCo Energy plc (AIM: TOM), the oil shale exploration,
development and technology group focused on using innovative
technology to unlock unconventional hydrocarbon resources,
announces that it has raised GBP1,500,000 (gross) by way of a
placing ("Placing") of 375,000,000 new ordinary shares of no par
value in the Company ("Ordinary Shares") (the "Placing Shares") at
a price of 0.4 pence per Placing Share (the "Placing Price")
undertaken by Turner Pope Investments (TPI) Ltd ("TPI") and Novum
Securities Ltd ("NSL"), the Company's joint brokers. The number of
Placing Shares to be issued represents approximately 136% of the
Company's current issued share capital.
Every two Placing Shares have one warrant attached, resulting in
the issue of 187,500,000 warrants, with each warrant having the
right to acquire one new Ordinary Share at an exercise price of 0.8
pence for a period of two years from the date of the admission of
the Placing Shares (the "Warrants"). If the Warrants are exercised
in full, this would result in the issue of 187,500,000 new Ordinary
Shares, which would represent approximately 28.8% of the Company's
issued share capital as enlarged by the Placing.
The Company has also issued, in aggregate, 22,500,000 warrants
to TPI and NSL, giving them the right to acquire such number of new
Ordinary Shares at an exercise price of 0.4 pence for a period of
two years.
The Company has also appointed NSL as its joint broker with
immediate effect.
The Company confirms that the Placing follows the previous
placing that was, as announced on 19 June 2020, terminated by TPI
in accordance with the terms of the placing agreement between the
Company and TPI.
Use of Proceeds
As detailed in the Company's interim results for the six months
ended 31 March 2020 (the "Interims"), announced on 30 June 2020,
and further to the joint venture agreement entered into with Valkor
LLC ("Valkor") regarding the establishment of Greenfield Energy LLC
("Greenfield") (the "JV Agreement"), the Company confirmed that it
continued to require further funding in order to fund, inter alia,
its contribution of US$1.5 million to Greenfield pursuant to the JV
Agreement.
Until such funds have been secured, Greenfield will not be in a
position to materially advance operations at the Petroteq Energy
Inc's ("Petroteq") existing oil sands plant at Asphalt Ridge, Utah
(the "POSP"), which includes making the required upgrades and being
able to undertake the proposed work programme.
As a result, the net proceeds of the Placing will be used by the
Company to provide funding of up to US$1.5 million to Greenfield,
with such funds being used to enable Greenfield to, inter alia ,
undertake the planned upgrades to the POSP and to complete the
associated tests with the aim of demonstrating the POSP's
commerciality, together with funding TomCo's contribution to the
FEED Study on Petroteq's closed loop system for use in the recovery
of oil from oil sands (the "Oil Sands Technology") and to provide
general working capital to the Company.
As detailed in the Interims, in respect of the POSP, Valkor has
entered into an agreement with Petroteq (the "Work Order"), for
Valkor to take over the management and operations of the POSP.
Pursuant to the JV Agreement, the Work Order will be assigned to
Greenfield.
Following a review of the planned upgrades to and the test
program at the POSP, it has been determined by both TomCo and
Valkor that it would be more efficient to complete all the planned
upgrades and installation works to the POSP as soon as possible,
rather than implement it through a phased approach.
The proposed upgrade works to the POSP are planned to increase
the POSP's capacity to 500 barrels of oil per day ("bopd") and to
run it for a sufficient period of time for the design to be
reviewed and the operations verified by third party engineers. The
TomCo Board expects that the upgrades to the POSP will include,
inter alia:
-- The addition of a third mix tank to increase the POSP's overall capacity;
-- Improvement of the POSP's heating system for sand drying and solvent recovery; and
-- Subject to agreement being reached with Quadrise Fuels
International plc ("Quadrise"), the upgrade will include a
commercial trial of Quadrise's MSAR(R) Technology at the POSP.
The Company believes that it will take approximately three
months to complete the upgrade works to the POSP, with the test
programme expected to then take approximately a further 4-6 weeks,
with third party verification of the process to then be undertaken
following the testing. It is envisaged that the FEED will then be
completed following the receipt, and subject to the results, of the
third party verification report and assuming no further changes are
needed to the POSP.
Whilst Quadrise has confirmed that it has agreed in principle
with Valkor to the deployment of MSAR(R) trial equipment as part of
the planned upgrade to the POSP and that they continue to work in
good faith to finalise the process design and an agreement for the
upgrade with Valkor, including the terms of the scope and timing of
the upgrade and associated test, there can be no certainty that an
agreement will be reached in this regard. If agreement is not
reached with Quadrise, then the upgrade and test will not include a
commercial trial of Quadrise's MSAR(R) Technology at the POSP.
Admission
The Placing is subject to normal conditions including, inter
alia, that the placing agreements with the joint brokers have not
been terminated, none of the warranties contained within the
placing agreements have been breached and admission of the Placing
Shares to trading on AIM is effective at or before 8.00 a.m. on 8
July 2020 or such other later time as may be agreed by the Company
and the joint brokers, not being later than 31 July 2020.
The Placing Shares will rank pari passu with the existing
ordinary shares of no par value in the capital of the Company
("Ordinary Shares") and application will be made for the Placing
Shares to be admitted to trading on AIM ("Admission"). It is
expected that Admission will become effective and dealings in the
Placing Shares will commence at 8.00 a.m. on 8 July 2020.
Following Admission, the Company's issued share capital will
consist of 650,759,235 Ordinary Shares with voting rights. There
are no Ordinary Shares held in treasury. The figure of 650,759,235
may be used by shareholders, following Admission, as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change to their
interest in, the share capital of the Company under the Financial
Conduct Authority's Disclosure Guidance and Transparency Rules.
John Potter, CEO, commented: "We are pleased that we have been
able to secure the necessary funding via the Placing to enable us
to advance Greenfield, to undertake the upgrades to the POSP and
complete the associated test programme.
We look forward to keeping shareholders updated as we seek to
demonstrate the commerciality of the Oil Sands Technology."
Enquiries:
TomCo Energy plc
Stephen West (Chairman) / John Potter (CEO) +44 (0)20 3823 3635
Strand Hanson Limited (Nominated Adviser)
James Harris / Richard Tulloch / James Dance +44 (0)20 7409 3494
Turner Pope (Joint Broker)
Andy Thacker / Zoe Alexander +44 (0)20 3657 0050
Novum Securities Limited (Joint Broker)
Charlie Brook-Partridge +44 (0)20 7399 9402
For further information, please visit www.tomcoenergy.com .
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014.
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END
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