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TomCo Energy PLC (TOM)
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Tuesday 14 June, 2016
TomCo Energy PLC
Update on Red Leaf and EcoShale In-Capsule Process
RNS Number : 1633B
TomCo Energy PLC
14 June 2016
14th June 2016
TomCo Energy plc (AIM: TOM )
("TomCo" or the "Company")
Update on Red Leaf and EcoShale® In-Capsule® Process
TomCo, the oil mining company, announces that it has received an update from its technology provider, Red Leaf Resources, Inc. ("RedLeaf"). This recent correspondence contained certain information which the Company considers to be material to RedLeaf's Early Production System ("EPS") capsule and to its development timetable.
Red Leaf recently completed a pre-FEED (preliminary front end engineering design) commercial study for the EcoShale® technology on its Seep Ridge lease in Utah. Based on the results of this study, the RedLeaf Board has approved plans to proceed with the development of the commercial demonstration project, or EPS capsule at Seep Ridge. RedLeaf's joint venture partner and shareholder, TOTAL E&P USA Oil Shale, LLC ("TOTAL"), has advised RedLeaf that it is not prepared to move forward with an EPS. Ongoing discussions between RedLeaf and TOTAL continue in order to determine the best path forward. In the meantime, consistent with its boards' direction, RedLeaf is conducting the basis of design study for the EPS capsule. It has advised the Company that this study should be complete in the autumn of this year.
Key cost components for a commercial project at Seep Ridge assuming >30,000 barrels per day of production were:
· Capsule cost - $31.8 million for a 1 million barrel capsule
· Working gas units and central processing plant - $4.1 billion
RedLeaf believes the capsule costs are in line with their objectives, with additional room for improvement. However, the Seep Ridge processing plant costs are higher than it had originally budgeted. The capsule is the essence of its proprietary technology and was the focus of its engineering efforts. RedLeaf's management believes that with more time devoted to plant optimisation, there is room for cost savings in the processing plant budget.
Outlook
RedLeaf's current priority is to demonstrate the capsule technology through the successful completion of the EPS capsule. TomCo is advised that an EPS basis of design engineering study is now underway to determine size, scale, cost and critical components necessary to demonstrate commercial applicability. TomCo understands that this process is expected to be completed in the autumn and once defined, RedLeaf would then move into an engineering phase for the improved EPS.
RedLeaf believes that given the reduced size and complexity of the