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TomCo Energy

  • BY: Andrew Hore |
  • POSTED: 20/04/2008 |

TomCo Energy has acquired stakes in two Israeli oil licences.

Isle of Man-registered TomCo paid $1m and issued 12.62m shares at 2p each to acquire 50% of the Heletz-Blur-Kokhav licence and 25% of the adjacent Iris licence for New York-quoted Avenue Group. It has also made a contribution of $107,000 to past costs and will pay up to $4.5m in development costs over the next three years.

TomCo will pay an additional $1.5m when a 30-year production lease is issued and another $5m when gross recoverable reserves are more than 10m barrels of oil.

These blocks are south of Tel Aviv and just north of the Gaza Strip. They include the Heletz field which was discovered in 1955 and was producing oil until 1968. Oil prices are much higher now and the plan is to restart production from old wells and drill new infill wells. 

Prior to this acquisition TomCo’s main asset was oil shale licences in Utah. The technology to extract oil from oil shale is still being perfected so it will be some years before these licences start to generate revenues. It is possible that TomCo might sell the licences before any production commences. The Israeli oil assets will generate cash for the business before any decision is made on the oil shale investment.

A placing at 1.5p a share raised £1.2m before expenses. A warrant to buy one share at 2.5p and another to buy a share at 5p were included with every two shares acquired in this placing. Loan notes issued to Trafalgar Capital Specialized Investment Fund raised €1m and is convertible at 2p a share. There are warrants attached to the loan notes.

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