Tomco Energy Regulatory News (TOM)

15 Jan 2009 10:25



TomCo Energy plc

("TomCo" or the "Company")

£5m Equity Line of Credit Secured with GEM Global Yield Fund

TomCo (AIM:TOM) is pleased to announce that it has entered into an agreement on 14th January 2009 with GEM Global Yield Fund Limited ("GEM"), whereby GEM has made available to TomCo an equity line of credit of up to £5 million (the "Facility"). Under the terms of the agreement, TomCo is able to make draw downs at times of its choosing by issuing new ordinary shares of 0.5p each in the Company ("Shares") to GEM in return for cash. The equity line is available for a period of three years. Draw downs may only be initiated by TomCo and cannot be called by GEM.

The Company intends to use the Facility to fund its obligations in the development of the Heletz-Kokav-Brur Oil Fields in Southern Israel, and for general working capital purposes. 

Under the terms of the Facility and subject to conditions:

1. GEM Investment Advisors Inc will receive an arrangement fee of £50,000 (payable by way of deduction from future draw downs).

2. The Company may issue a Subscription Notice ("Notice") requesting GEM tosubscribe for a number of Shares up to a maximum of 500 per cent. of the average daily trading volume in the 15 trading days immediately preceding the date of the Notice at a price equal to 90 per cent. of the average closing bid price of the Shares over the 15 trading days immediately following that date. GEM retains the right to buy between 50 per cent. and 200 per cent. of any requested amount of Shares. 

3. The Company has issued warrants to GEM over 34,666,667 Shares which are exercisable at 1.5p per share. The warrants are exercisable for a period of three years from the date of issue.

TomCo's CEO, Howard Crosby, commented;

"We are extremely pleased with this arrangement which fits well into our overall financing strategy and it is good to be able to have certainty of funds in such uncertain times. This Facility will help to give TomCo the ability to fulfil our plan for the development of the Heletz fields where the medium term target is to bring the field production up to at least 300 bopd and the award of a 30 years production lease and this Facility with GEM will also move the Company forward in other respects."

Enquiries:

Notes:

TomCo is an AIM listed company which has investments in conventional oil production in the United States and Israel. The Company also owns leases on approximately 3000 acres of shale oil holdings in Utah, estimated by SRK (an independent firm of mining consultants) to contain some 230 million barrels of oil.