# TomCo Energy lease agreement, MOU and TSHII drilling update

- Link: https://www.directorstalkinterviews.com/tomco-energy-lease-agreement-mou-and-tshii-drilling-update/4121056298
- Published: 2022-03-10T07:22:07+00:00
- Author: Giles

**TomCo Energy plc** (LON:TOM), the US operating oil development group focused on
using innovative technology to unlock unconventional hydrocarbon resources, has 
announced that the Company’s wholly owned subsidiary, Greenfield Energy LLC, has
entered into a Memorandum of Understanding with Vivakor Inc. covering, _inter alia_,
the proposed development by Vivakor of an enhanced oil sands processing plant on
the Tar Sands Holdings II LLC site located in the Uinta Basin, Utah, United States
and the provision of professional services by Greenfield.  In addition, Vivakor 
has entered into a lease with TSHII covering approximately three acres of the TSHII
site to accommodate its planned operations, which includes the future supply of 
oil sands by TSHII.

As previously announced, TomCo, via Greenfield, currently owns a 10% Membership 
Interest in TSHII with an exclusive option, at its sole discretion, to acquire the
remaining 90% of the Membership Interests for certain additional cash consideration
in the period up to 31 December 2022.

**TSHII Lease Agreement with Vivakor**

Vivakor has entered into a renewed lease, covering approximately three acres of 
land, with TSHII for a term of five years, with an option to extend for a further
five years, effective from 9 March 2022, to, _inter alia_, accommodate Vivakor’s
storage needs and planned plant operations at the TSHII site.

It is Vivakor’s intention, with the assistance of Greenfield, to develop and enhance
a pre-exisiting oil sands processing plant that it owns on the Property.  Such upgraded
plant, to be operated by Vivakor, would be designed to produce at least 1,000 barrels
of oil per day or equivalent tonnage of asphalt cement.

Under the Lease, TSHII shall supply Vivakor with such quantity of oil sands as Vivakor
determines each month, at a set minimum saturation quality, with a maximum supply
of 2,000 tons per day. Vivakor will cover the cost of mining the oil sands and will
pay TSHII US$3 per ton of oil sands processed by way of a rental payment for the
Lease.  Vivakor has paid a US$30,000 advance against future rental payments on signing
of the Lease.

**MoU between Greenfield and Vivakor**

The MoU covers a proposed professional services agreement between Vivakor and Greenfield
for the potential supply of certain operating and engineering services, including
sand treatment and oil upscaling to Vivakor, such services to be provided by Valkor
LLC through Greenfield.

In exchange for its services in respect of the enhancement of Vivakor’s plant, Greenfield
would be entitled to receive 50% of net revenues received by Vivakor for any post-
processed sand material from the plant sold through offtake agreements procured 
by Greenfield.

The MoU includes a binding five-year exclusivity period for agreeing and entering
into any definitive agreements covering the abovementioned matters.

**TSHII Drilling Update**

Further to the Company’s announcement of 10 February 2022 that the permits required
from the Utah Division of Oil, Gas and Mining to drill three exploration wells on
the TSHII site had been received by Greenfield’s wholly owned subsidiary, AC Oil
LLC, the Company is pleased to report that the drilling of such wells has now commenced.

Initial results from the drilling have met the Company’s expectations, with confirmation
that no water was encountered in the target formation. Approximately 120 feet of
cores have been produced so far from the first well drilled (AC1) and 80 feet of
cores from the second well (AC6). The third well (AC2) is expected to be completed
next week, following which tests will be conducted to confirm the oil saturation.

**Warrant Term Correction**

As announced on 4 December 2019, the Company issued 8,538,462 warrants to Turner
Pope Investments (TPI) Ltd in connection with their services in respect of the placing
announced therein.  The Warrants give TPI the right to acquire 8,538,462 new ordinary
shares in the Company at an exercise price of 0.65 pence per share, for an aggregate
exercise cost of £55,500. The announcement on 4 December 2019 erroneously stated
that the Warrants were exercisable for a period of two years rather than three years
as detailed in the underlying Warrant documentation.  All other terms were correctly
stated and remain as previously disclosed. 

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