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TomCo Energy

  • BY: Andrew Hore |
  • POSTED: 26/09/2014 |

Utah-focused oil shale assets developer TomCo Energy is raising £1m at 0.5p a share.

The placing price is a sharp discount to the market price which fell 0.17p to 0.66p, which values the enlarged share capital at £13.7m.

The cash is required to complete the permitting process. There was £389,000 in the bank at the end of March 2014. There was an £847,000 cash outflow in the six months to March 2014. TomCo says that the annual cash burn is $1.2m, although this does not appear to include capital investment. TomCo says that it should have enough cash for 12 months.

Chairman Sir Nicholas Bonsor acquired 1.55m shares in the placing – he did not own any shares before. Separately, TomCo chief executive Paul Rankine has bought 140,263 shares at 0.58p each, on top of the 3.56m shares he acquired in the placing, taking his stake to 0.24%. Finance director Miikka Haromo has acquired 326,673 shares at 0.55p each, on top of the 2.67m shares taken up in the placing, and he owns 0.14% of the company.

TomCo has switched nominated adviser and broker from Fox-Davies to Shore Capital.

TomCo’s technology partner Red Leaf Resources, in partnership with Total, is commencing mining at a nearby commercial demonstration project, which is 15 miles west of TomCo’s Holliday block. This project is important in that it can demonstrate the commerciality of the EcoShale In-Capsule process. The first oil could be produced by the Red Leaf/Total joint venture in 2015 and a final decision on investment made by Total about investment in the joint venture is likely within 18 months.

This is important because TomCo can benefit from the technological knowledge gained on the adjacent site but even more important is that proof of commerciality for the process should make the Holliday block attractive to Total or another large oil company that has the finance to develop it.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFSeptember2014_60.pdf

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