# TomCo Energy raises £1.25 million (gross) by way of a placing

- Link: https://www.directorstalkinterviews.com/tomco-energy-raises-1.25-million-gross-by-way-of-a-placing/4121046442
- Published: 2022-01-24T07:28:00+00:00
- Author: Amilia Stone

**TomCo Energy plc** (LON:TOM), the US operating oil development group focused on
using innovative technology to unlock unconventional hydrocarbon resources, has 
announced a placing to raise gross proceeds of £1.25 million, certain directorate
changes and an operational update.

**Highlights**

·    The Company has raised £1.25 million (gross) by way of a placing at a price
of 0.50 pence per share

·    The net proceeds of the Placing will be utilised to meet the costs of drilling
three exploration wells on the Tar Sands Holdings II LLC (“TSHII”) site, the Company’s
costs in relation to a due diligence exercise to be undertaken with a view to securing
funding to facilitate implementation of the Company’s plans for the TSHII site and
for the Company’s general working capital requirements

·    Zac Philips appointed as a non-executive director of the Company and Richard
Horsman stepped down from the Board, both with immediate effect

·    Acquisition of the remaining 20% interest in TurboShale Inc not previously 
held by the Company for US$15,000

**Details of the Placing**

The Company has raised gross proceeds of £1.25 million through the placing of 250,000,000
new ordinary shares of no-par value in the capital of the Company (“Placing Shares”)
at a price of 0.50 pence per share (the “Placing”).  The Placing was arranged by
Monecor (London) Ltd (trading as ETX capital) and the Placing Shares will represent
approximately 14.3% of the Company’s enlarged issued share capital. The Placing 
price represents a discount of approximately 19 per cent. to the mid-market closing
price on AIM of 0.615 pence per ordinary share on 21 January 2022, being the latest
practicable business day prior to the publication of this announcement.

**Background to the Placing**

The Placing has been undertaken to provide funds to further progress the plans of
the Company’s wholly owned subsidiary, Greenfield Energy LLC (“Greenfield”), in 
relation to the TSHII site located in the Uinta Basin, Utah, United States.  As 
previously announced, Greenfield, 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 additional cash consideration of US$16.25 million up to 31 December
2022.

The net proceeds of the Placing are currently expected to provide the Company with
sufficient funds to cover its corporate operating expenses through to Q1 2023, as
well as the costs associated with drilling three exploration wells on the TSHII 
site, as further described below.

Additionally, the net proceeds will be applied to cover the Company’s expenses in
relation to a due diligence exercise, expected to commence shortly, in order to 
secure funding of up to US$145 million to Greenfield. Whilst there is no certainty
that such funding arrangements will be concluded, or as to the terms of any such
funding, such non-equity funding, if secured, would enable Greenfield to acquire
the remaining 90% of the Membership Interests in TSHII and cover the currently estimated
construction costs of an initial 5,000 barrel per day oil production plant and requisite
associated supporting infrastructure to enable the future mining of oil baring sands
at the TSHII site.

**Admission and Total Voting Rights**

The Placing Shares will rank _pari passu_ in all respects with the Company’s existing
ordinary shares.  The Placing is conditional, _inter alia_, on there being no breach
of the Company’s obligations under the Placing Agreement entered into between Monecor(
London) Ltd (trading as ETX capital) and the Company prior to admission of the Placing
Shares to trading on AIM (“Admission”), and such Admission becoming effective.  
Application will be made to the London Stock Exchange for the Placing Shares to 
be admitted to trading on AIM.  It is expected that Admission will become effective
and that dealings in the Placing Shares on AIM will commence at 8.00 a.m. on or 
around 28 January 2022.

On Admission, the Company’s issued share capital will consist of 1,748,078,678 ordinary
shares, each with one voting right.  There are no shares held in treasury. Therefore,
the Company’s total number of ordinary shares and voting rights will be 1,748,078,678
and this figure 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 Company under the FCA’s
Disclosure Guidance and Transparency Rules.

**Directorate Changes**

The Company is pleased to announce the appointment of Zac Philips as a non-executive
director of the Company with immediate effect. Zac has and continues to be engaged
by the Company, through his company, Oil & Gas Advisors Limited, to provide advice
in respect of a number of financing initiatives.

Zac has over 22 years’ experience in oil and gas, and finance, working for companies
such as BP, Chevron, DB Petroleum, Merrill Lynch and ING Barings, where he undertook
finance or finance related roles.  He is an expert in the valuation of oil and gas
exploration and production assets at all stages of the cycle.  Previously, Zac was
the CFO for Dubai World’s oil & gas business (DB Petroleum), with responsibility
for risk management, valuation and authoring of investment proposals.  Zac has an
Honours Degree in Chemical Engineering and a PhD in Chemical Engineering.  He is
a member of the Society of Petroleum Engineers, Institute of Chemical Engineers,
American Association of Petroleum Geologists and the Association of International
Petroleum Negotiators.

Richard Horsman has resigned as a Non-Executive Director of the Company with immediate
effect in order to focus on his other business interests.

**Operational update**

_TSHII Drilling Update_

As announced on 16 November 2021, the Company had previously intended to drill three
exploration wells on the TSHII site during December 2021.  All information requested
by the Utah Division of Oil, Gas and Mining has been submitted by Greenfield’s wholly
owned subsidiary, AC Oil LLC, in order for permits to be issued for these planned
wells, with such permits expected shortly. Additionally, the permitting process 
for the planned initial production wells has commenced and it is currently anticipated,
subject to the requisite permits being received and further funding being obtained
in addition to that being provided pursuant to the Placing, that these will be drilled
by the end of H1 2022.

_TurboShale _Inc.

The Company is further pleased to announce that it has acquired the residual 20%
interest in TurboShale Inc (“TurboShale”) not previously held by the Company, for
US$15,000. Accordingly, TurboShale is now a wholly owned subsidiary of the Company.
Amongst other assets, TurboShale owns two 25KW Radio Frequency generators currently
valued by TomCo at over US$500,000.  The Company intends to determine its strategy
for the future of TurboShale over the course of the next six months, however it 
is not currently a strategic focus for the Company.

> **Commenting, Malcolm Groat, Chairman of TomCo Energy, said**:
> “_We are very pleased to have secured funding,_ via the Placing, to, inter alia,
> assist Greenfield in progressing its plans in respect of the TSHII site.  Specifically,
> the net proceeds of the Placing will be applied to the drilling of the planned
> exploration wells and facilitate the due diligence exercise to be undertaken by
> a party currently interested in backing our plans for Greenfield.
> “I am also delighted to welcome Zac to the Board. Zac brings a wealth of experience
> within the oil and gas industry and significant corporate finance acumen. We look
> forward to Zac assisting with our plans as we seek to deliver significant long
> term shareholder value.  I would also like to take this opportunity to thank Richard
> for his contribution to the Company and we wish him well in his future endeavours.
> “We are now focussed on the due diligence exercise with the potential funder for
> Greenfield, together with progressing other matters in relation to the TSHII site,
> including the planned exploration wells.  We look forward to providing further
> updates in due course.”

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