LONDON (Alliance News) - TomCo Energy PLC shares fell on Monday after it said the technology needed to progress its flagship Holliday project has been pushed back once again, this time until 2017, as the developer of the technology tries to reduce costs in response to lower commodity prices.
TomCo shares dropped 32% to 0.140 pence per share on Monday morning.
TomCo's focus is the Holliday block in the US state of Utah. 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 was accelerating the commercial development of its Early Production System, but at the end of April, the company said Red Leaf had deferred the target date of completion until the second half of 2016 due to the low oil price environment.
On Monday, TomCo reiterated that the project will not go ahead until the technology is ready, noting a Red Leaf press release which said the capsule, which it is developing with Total SA, has been pushed back until 2017.
"The timeline for first oil from the EcoShale capsule being built by Red Leaf and Total has been set back, likely by two years. The joint venture plans to use this delay to incorporate upgrades in the design. It is anticipated this work could reduce the EcoShale production costs during full commercial development to the USD30 per barrel to USD40 per barrel as originally estimated by Red Leaf," said Michael Binnion, chief executive of Red Leaf.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Tomco Energy (TOM)