Last checked at 
LONDON (Alliance News) - The new chief executive of TomCo Energy PLC said Thursday the company may have to finally start looking for new opportunities rather than waiting for the technology being developed by its partner to be ready for use at its project in Utah.
TomCo has been waiting an age for its partner Red Leaf Resources Inc to finish developing its early production system that, when ready, will be supplied to TomCo for use on its Holliday shale project in Utah in the US, but the system has faced significant delays.
Red Leaf neighbours TomCo's Holliday project and is providing its technology to the company. The early production system is a capsule-using technology that allows companies to produce high-quality liquid transportation fuels from oil shale more economically and in more environmentally-friendly ways.
The system is being developed in partnership with France's Total SA, but it is not expected to be ready until 2017, and there are further doubts as to whether this will materialise even then following the previous delays.
That has meant activity at TomCo has been rather subdued as the company hunkered down and focused on costs in order to keep ticking over until its partner's technology was ready.
However, Chris Brown took over at the helm of the company in early April and has decided the company cannot wait any longer. Brown has decided to loan the company funds to broaden its horizon outside of oil and gas.
It is worth noting that Brown is the life tenant and settlor of the BBCK Family Trust in Jersey, an indirect beneficiary of Kenglo One Ltd, which is the largest shareholder of TomCo with a 23.8% stake.
"The board remains firm in its belief that the key to unlocking value in the business is to progress the company's flagship project in Utah. However, Chris has a mandate from the board to consider the acquisition of assets that will produce positive cash flows for TomCo whilst not being majorly dilutive for existing shareholders," said the company Thursday.
After evaluating opportunities in the energy and mining sectors, TomCo said it has decided to broaden its scope by looking at other more attractive sectors, hinting a palm oil milling project in West Africa could be on the cards.
"[The company] is currently completing preliminary due diligence on a new palm oil milling project in West Africa, further information in relation to this potential project will be provided in due course subject to the successful completion of our assessments," said TomCo.
TomCo said the palm oil project could start delivering cashflow from the middle of 2017, stating it would also require "low capital expenditure costs".
Unsurprisingly, TomCo does not have the funds to progress a new strategy, and therefore Brown has decided to provide a GBP150,000 convertible loan. The funds should be with the company in seven days and could form part of a wider fundraising in the near term.
"This loan further demonstrates his commitment and belief in the future prospects of the business. It is expected to contain conversion terms such that it converts at the same price as any future equity placing, the possibility for which in coming months is currently under review by the board," said TomCo.
Excluding that loan, TomCo reported a cash balance of GBP102,000 at the end of March. Luckily, TomCo has maintained its licenses in Utah and has no near-term licence commitments left to fulfil.
The company reported a pretax loss of GBP207,000 in the six months to the end of March, narrowing from the GBP307,000 loss a year earlier after a reduction in administrative expenses.
TomCo shares were up 5.0% to 0.147 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
