TomCo Energy Greenfield secures right for the potential construction of first commercial scale plant

TomCo Energy

TomCo Energy plc (LON:TOM), the US operating oil development group focused on using innovative technology to unlock unconventional hydrocarbon resources, has announced that Greenfield Energy LLC, the Company’s 50/50 joint venture with Valkor LLC, has entered into a membership interest purchase agreement with Endeavour Capital Group LLC and Tar Sands Holdings II LLC with respect to the potential acquisition by Greenfield of up to 100% of the ownership and membership rights and interests in TSHI).  TSHII owns approximately 760 acres of land and certain non-producing assets in Uintah County, Utah, USA.

Greenfield plans, subject, inter alia, to the completion of satisfactory due diligence and securing of the requisite funding, 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 (Front-End Engineering and Design) study, once finalised and the process independently verified, 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.

Pursuant to the terms of the Agreement, Greenfield has 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.  Greenfield can exercise its right to acquire an initial 10% of the Membership Interests for cash consideration of US$2 million (against which the deposit shall be credited) on or before 1 September 2021.  Following 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 of US$15.25 million, if acquired on or before 31 December 2021, or US$16.25 million if acquired between 1 January 2022 and 31 December 2022.  Greenfield has the right to unilaterally terminate the Agreement at any time during the initial 120 day period from its execution for no penalty save for forfeiting the upfront US$200,000 deposit. The Agreement also contains certain commercial and other representations and warranties between the parties customary for a transaction of this nature.

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There can be no certainty that Greenfield’s due diligence exercise will be satisfactory or that the required funding can be secured to complete the acquisition of a 100% Membership Interest and further announcements will be made as and when appropriate.

Commenting, John Potter, CEO of TomCo Energy, said: “I am delighted that Greenfield has secured the right to acquire, via TSHII, a suitable site for the potential construction, subject to funding, of its first commercial scale plant.  The Site has the key attributes that our JV has been seeking and Greenfield will shortly be commencing detailed due diligence, whilst simultaneously progressing discussions with potential funders.  In the meantime the POSP continues to produce saleable oil and sand and we look forward to providing further updates in due course as matters progress.”

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