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(Alliance News) - TomCo Energy PLC on Wednesday said its Greenfield Energy joint venture has completed due diligence work at its planned oil production plant in Utah but warned of funding uncertainty in purchasing the site.
Greenfield, which is 50% owned by TomCo, is currently pursuing plans to construct an initial 5,000 barrels of oil per day production facility.
The venture is aiming secure the required funding to buy 100% of Tar Sands Holdings II, which owns around 760 acres of land and certain non-producing assets in Utah, US. If bought, the land could be used for the mining of oil sands.
The site also has existing infrastructure, plant and equipment, together with an existing large mine permit, that could quicken any future development by Greenfield.
However, TomCo cautioned that "there can be no certainty that Greenfield can secure the requisite funding", with the price of the site potentially being USD20 million based on the USD2 million cost of acquiring a 10% stake.
Shares in TomCo were trading 9.3% lower at 0.68 pence each in London trading.
The oil development firm is currently in talks with an unnamed third party for funding to build wells on Tar Sands land.
"We are delighted to have completed our comprehensive due diligence exercise on TSHII and its site and that the site appears ideally suited for the planned future construction, subject to funding, of Greenfield's first commercial scale plant," commented Chief Executive John Potter, CEO of TomCo, said:
By Will Paige; willpaige@alliancenews.com
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