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LONDON (Alliance News) - TomCo Energy PLC Wednesday said it is focused on managing its costs as the company sits and waits for the technology needed to progress its flagship Holliday project in the US, which does not look set to take off until the latter half of 2016.
TomCo shares fell 10% to 0.180.0 pence per share on Wednesday morning after the news.
The oil shale exploration and development company, which generates very little in revenue, reported a GBP307,000 pretax loss in the six months ended March 31, narrower than the GBP357,000 loss reported a year earlier, solely due to administrative expenses falling.
At the end of March, the company reported a cash balance of GBP569,000 and said it has "no material outstanding license commitments".
TomCo's focus is the Holliday block in Utah, US. TomCo has had its Notice of Intention to Commence Large Mining Operations at the block approved by the Utah Division of Oil, Gas and Mining, but operations will not begin at the block until its partner, Red Leaf Inc, has progressed its Early Production System into commercial-stage construction.
Red Leaf Inc 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.
Back in March, TomCo said Red Leaf were accelerating the commercial development of its Early Production System, but on Wednesday said Red Leaf has deferred the target date of completion until the second-half of 2016 due to the low oil price environment, the same reason it said the company was accelerating the development.
"In light of the delay in construction by Red Leaf, and the resultant impact on TomCo's Holliday Block, the board has put in a series of cost-cutting measures to reduce the company´s cash burn going forward and it is considering several additional options on how best to see TomCo through the delays caused by the low commodity oil price environment," said Non-Executive Chairman Nicholas Bonsor.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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