(Alliance News) - TomCo Energy PLC shares were down nearly 20% after it announced on Monday it has raised GBP1.3 million gross in a share placement.
The London-based energy company with operations in the US placed 250 million new ordinary shares at a price of 0.50 pence each, a 19% discount to Friday's mid-market trading price. The new shares represent 14% of the enlarged share capital.
TomCo's share price fell by 19% to 0.51 pence each in London on Monday morning.
The proceeds will be used to fund its wholly-owned subsidiary, Greenfield Energy LLC's Tar Sands Holdings II site in Utah. They will cover its corporate operating expenses up to the first quarter of 2023, as well as drilling costs for three exploration wells on the site. The wells are expected to be drilled by the end of the first half of 2022.
The funds will also be used to cover due diligence costs of a USD145 million fundraise for Greenfield. This would cover Greenfield's acquisition of the remaining 90% of the TSHII site, for which it will need USD16.3 million, as well as the construction of a 5,000 barrel per day oil production plant and necessary supporting infrastructure on the site.
TomCo also announced it has completed the 20% interest acquisition of Turboshale Inc for USD15,000. Turboshale is now wholly owned by the company, but is "not a strategic focus", TomCo said.
TomCo Chair, Malcom Groat, commented: "We are now focussed on the due diligence exercise with the potential funder for Greenfield, together with progressing other matters in relation to the TSHII site, including the planned exploration wells. We look forward to providing further updates in due course."
By Elizabeth Winter; elizabethwinter@alliancenews.com
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Tomco Energy (TOM)