News blog

TXO

• BY: Andrew Hore |
• POSTED: 19/06/2014 |

TXO says that Athabasca Resources, in which it holds a 18.8% stake, plans to join Aim at the end of September.

Athabasca has raised £305,000, including TXO’s initial investment. This will cover the initial costs of joining Aim cover the deposit for the farm-in to four Alberta Crown Leases in the Athabasca oil sands in Alberta, Canada. Athabasca is acquiring a 50% farm-in interest to these leases from Nordic Petroleum. The leases that Athabasca is farming-in to are the same ones that AIM-quoted Mercom Oil Sands planned to farm-in to when it floated in 2012. Mercom’s new management reviewed the agreement later that year and wanted to renegotiate the agreement with Nordic Petroleum but talks broke down. At the end of 2013, an out of court settlement was agreed.

The Athabasca oil sands account for the vast majority of Canada’s potential reserves and reductions in the cost of extraction have made more of these reserves commercial over the past decade. However, not all of the reserves are commercially viable. An appraisal programme will be carried out at the end of 2014.

TXO has a 25.1% stake in Oil Recovery Services Ltd (ORS), which has developed technology that can enhance oil recovery. TXO also has a 30% stake in Oil Tech Royalties Inc, which can be used to change the dissolution, diffusion and crystallisation speeds when heavy crude oil is treated. These technologies could be used by Athabasca to make the extraction of oil from the oil sands more cost-effective.

Athabasca is valued at £1.925m at the most recent fundraising price, which values the TXO stake at £362,000.  At 0.23p a share, TXO is valued at £6.02m.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFJune2014_57.pdf