LONDON (Alliance News) - Oil mining company TomCo Energy PLC on Tuesday said its technology provider Red Leaf Resources Inc has approved plans to proceed with the development of its early production system capsule at Seep Ridge in Utah.
This comes after Red Leaf completed a pre-FEED commercial study for the EcoShale technology on the Seep Ridge lease.
However, Red Leaf's joint venture partner and shareholder TOTAL E&P USA Oil Shale LLC has advised Red Leaf that it is not prepared to move forward with an EPS, and therefore the two companies are carrying out discussions to determine the best path forward.
In the meantime, Red Leaf is conducting the basis of design study for the EPS capsule, which it advised TomCo should be completed in the autumn. The study will determine the size, scale, cost and critical components necessary to demonstrate commercial applicability.
According to TomCo, Red Leaf believes the capsule costs are in line with their objectives of USD31.8 million for a 1 million barrel capsule and USD4.1 billion for working gas units and a central processing plant. However, the Seep Ridge processing plant costs are higher than it had originally budgeted. TomCo said Red Leaf management believes that with more time devoted to plant optimisation, there is room for cost savings in the processing plant budget.
Construction should begin either in late 2017 or in 2018, subject to TOTAL providing the necessary funding support.
"We are pleased with the major design improvements on the EcoShale In-Capsule Process, most of which can be applied directly to TomCo's Holliday Block project. However the total costs per barrel, including capital costs, look to be at the top end of previous expectations for Seep Ridge and the ramifications for TomCo's Holliday Block clearly needs further study," TomCo Chief Executive Chris Brown said in a statement.
Shares in TomCo were trading down 23% at 0.0930 pence on Tuesday afternoon.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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Tomco Energy (TOM)