TSHII Lease Agreement with Vivakor

RNS Number : 2734E

TomCo Energy PLC

10 March 2022

 

10 March 2022

TOMCO ENERGY PLC

("TomCo" or the "Company")

TSHII Lease Agreement with Vivakor

MoU between Greenfield and Vivakor

TSHII Drilling Update and Warrant Term Correction

TomCo Energy plc (AIM: TOM), the US operating oil development group focused on using innovative technology to unlock unconventional hydrocarbon resources, is pleased to announce that the Company's wholly owned subsidiary, Greenfield Energy LLC ("Greenfield"), has entered into a Memorandum of Understanding ("MoU") with Vivakor Inc. ("Vivakor'') covering, inter alia, the proposed development by Vivakor of an enhanced oil sands processing plant on   the Tar Sands Holdings II LLC ("TSHII") 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 (the "Lease"), covering approximately three acres of land (the "Property"), 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 (the "Warrants") to Turner Pope Investments (TPI) Ltd ("TPI") 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. 

Enquiries :

TomCo Energy plc

Malcolm Groat (Chairman) / John Potter (CEO)                       [phone]

Strand Hanson Limited (Nominated Adviser)

James Harris / Matthew Chandler                                               [phone]

Novum Securities Limited (Broker)

Jon Belliss / Colin Rowbury                                                           [phone]

IFC Advisory Limited (Financial PR)

Tim Metcalfe / Florence Chandler                                                [phone]

For further information, please visit  www.tomcoenergy.com .

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended.

 

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