Last checked at 18 Mar 2019 07:00
18 March 2019
TOMCO ENERGY PLC
(AIM: TOM) ("TOMCO", THE "COMPANY" OR THE "GROUP")
Updated Resources Statement
TomCo Energy plc, an exploration and development group, focused on using innovative technology to unlock unconventional hydrocarbon resources, in particular oil shales in the USA, is pleased to announce that SRK Consulting (Australasia) Pty Ltd ("SRK") has conducted an independent technical review of the Group's two oil shale leases, ML49570 and ML49571, located in the Uintah Basin, Utah USA (the "Leases"). TomCo has a 100% working interest in the Leases.
As part of this exercise, SRK has also prepared a resource estimate for the Company's Leases in accordance with the definitions and guidelines of the Petroleum Resources Management System (SPE, AAPG et al, 2018) ("PRMS") (the "2018 Resource Estimate").
Highlights
· Best estimate Contingent Resources (2C) of, in aggregate, 131.3 MM bbl of oil assessed under PRMS guidelines, plus best estimate Prospective Resource (2U) of, in aggregate, 442.8 MM bbl oil across the Leases
- The Holliday A block, where a field test is to be undertaken, has 2C Contingent Resources of 57.3 MM bbl of oil and 2U Prospective Resources of 84.7 MM bbl of oil
· Resource estimate prepared for first time in accordance with PRMS; previous estimates based on JORC standards
· Resource estimate includes the three blocks within ML 49570, for the first time
Further information
2018 Resource Estimate
TomCo holds an 80% interest in TurboShale Inc. ("TurboShale"), a US-based innovative technology company which holds two key patents regarding the use of radio frequency energy("RF") for the in-situ retorting and extraction of oil & gas from oil shale.
The Group's current focus is on using TurboShale's RF technology to unlock the oil shale resources within its Leases and in view of this, SRK believes that given the potential recovery of hydrocarbon liquids at the surface, it is now appropriate to quantify the Group's oil shale resources using PRMS. The previous resource estimates for the Leases, undertaken by SRK Consulting (UK) Limited ("SRK UK") in 2012 (the "2012 Estimate"), were prepared on the basis of the proposed method of extraction at that time, being Redleaf Resources Inc.'s EcoShale® In-Capsule® Process ("Redleaf's EcoShale Process"). This process, to which TomCo also has rights involves the mining of the oil shale and retorting at surface, and SRK UK had determined that the JORC mining code was appropriate at that time for this mined resource.
The 2018 Resource Estimate is based on geological, geophysical and assay data obtained from nine core holes drilled by TomCo in November 2011 and data from15 drill holes from the Utah Oil Shale Database (Open-File Report 469, Vanden Berg et al., 2006). This data covers all of the five discrete blocks that make up the Company's Leases (see Fig. 1.), and the 2018 Resource Estimate includes the three blocks within ML 49570 for the first time. These blocks were previously excluded from the 2012 Estimate as the depth of main oil shale beds, being 300 to 700 ft below surface, precluded exploitation by surface mining techniques. The currently proposed RF in-situ retorting technology, which the Company plans to test on its Holliday A block, has no such depth restriction and SRK have taken the view that the principal Oil & Gas reporting standard, PRMS, can be applied to all of the Group's blocks.
SRK have determined that the "exploration risk" for oil shales to be present within the Uintah Basin is extremely low - either unity (100% probability) or close to it - as the shales can be mapped with confidence across the basin. A separately determined "development risk" depends upon the applicable extraction technology, and the estimated probability that economic Reserves could be determined within a reasonable timeframe. Given the planned field test of TurboShale's RF technology planned by TomCo on the Holliday A block, SRK have taken the view that the development risk across the Lease ranges from 40% to 70%.
The 2018 Resource Estimate prepared by SRK in accordance with PRMS is set out below:
Contingent Resources (MM bbl) | ||||||||||
Lease | Block | Gross | Net Attributable | Risk Factor | Operator | |||||
Low (1C) | Best (2C) | High (3C) | Low (1C) | Best (2C) | High (3C) | Exploration | Development | |||
49571 | Holliday A | 28.2 | 57.3 | 88.9 | 28.2 | 57.3 | 88.9 | 1.0 | 0.7 | TomCo |
Holliday B | 1.8 | 4.6 | 8.2 | 1.8 | 4.6 | 8.2 | 1.0 | 0.7 | TomCo | |
49570 | Area 1 | 29.1 | 69.4 | 169.9 | 29.1 | 69.4 | 169.9 | 1.0 | 0.7 | TomCo |
Area 2 |
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Area 3 |
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| Total | 59.2 | 131.3 | 267.1 | 59.2 | 131.3 | 267.1 |
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Prospective Resources (MM bbl) | ||||||||||
Lease | Block | Gross | Net Attributable | Risk Factor | Operator | |||||
Low (1C) | Best (2C) | High (3C) | Low (1C) | Best (2C) | High (3C) | Exploration | Development | |||
49571 | Holliday A | 41.7 | 84.7 | 131.5 | 41.7 | 84.7 | 131.5 | 0.95 | 0.4 | TomCo |
Holliday B | 2.0 | 6.6 | 10.2 | 2.0 | 6.6 | 10.2 | 0.95 | 0.4 | TomCo | |
49570 | Area 1 | 18.8 | 44.7 | 109.5 | 18.8 | 44.7 | 109.5 | 0.95 | 0.4 | TomCo |
Area 2 | 22.9 | 110.5 | 307.6 | 22.9 | 110.5 | 307.6 | 0.95 | 0.6 | TomCo | |
Area 3 | 40.6 | 196.2 | 546.4 | 40.6 | 196.2 | 546.4 | 0.95 | 0.6 | TomCo | |
| Total | 126.0 | 442.8 | 1,105.1 | 126.0 | 442.8 | 1,105.1 |
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Note: 1C Proved, 2C Proved plus Probable (best estimate) 3C Proved plus Probable plus Possible
Comparison with 2012 Estimate (JORC)
The SRK 2012 Estimate, were announced on 12 June 2012 as 138 MM bbl of Measured and Inferred Mineral Resources under JORC standards. The 2012 Estimate, which was based on the same data used for the 2018 Resource Estimate, was restricted to the Holliday Block lease ML49571 only, due to mining feasibility of the other blocks as set out above, and also excluded some thinner oil shale zones.
The broadly comparable assessed volumes under PRMS are 153.2 MM bbl oil for ML 49571, of which 61.9 MM bbl are classified as best estimate Contingent Resources and 91.3 MM bbl as Prospective Resources. The increased estimate is due largely to the inclusion, as Prospective Resources, of deeper oil shales, thinner oil shale zones and differences in the anticipated retorting and oil recovery efficiency.
In addition, a significant Contingent Resource of nearly 70 MM bbl oil has been assessed for Area 1 of lease ML49570 (See Fig. 1), which was not considered in the 2012 Estimate due to depth of the oil shales below surface. This Lease is also thought to hold potential Prospective Resources of 350 MM bbl of oil, in untested areas based on regional data trends (see Fig. 1).
http://www.rns-pdf.londonstockexchange.com/rns/1366T_1-2019-3-18.pdf
Fig. 1. Location of the Holliday A, Holliday B (ML 49571) and the area 1, 2 and 3 Blocks (ML 49570) in the Uinta Basin, Utah, USA
Glossary
1C resources | the low estimate of Contingent Resources |
1U resources | the low estimate of Prospective Resources |
2C resources | the best or mid estimate of Contingent Resources |
2U resources | the best or mid estimate of Prospective Resources |
3C resources | the high estimate of Contingent Resources |
3U resources | the high estimate of Prospective Resources |
AAPG | American Association of Petroleum Geologists |
best (or mid) estimate or P50 | Reflects a volume estimate that, assuming the accumulation is developed, there is a 50% probability that the quantities actually recovered will equal or exceed the estimate. |
Contingent Resources | Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies. Contingent Resources may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality. Contingent Resources are further categorized in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterized by their economic status. |
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high estimate or P10 | Reflects a volume estimate that, assuming the accumulation is developed, there is a 10% probability that the quantities actually recovered will equal or exceed the estimate. |
low estimate or P90 | Reflects a volume estimate that, assuming the accumulation is developed, there is a 90% probability that the quantities actually recovered will equal or exceed the estimate |
MM bbl | million barrels |
Prospective Resources | Prospective Resources are those quantities of petroleum that are estimated to be potentially recoverable from undiscovered accumulations. These estimates are derived from volumetric estimates for the reservoir size, estimates of the reservoir characteristics (porosity, permeability, oil saturation). The basis of these estimates would be available geological and geophysical data, and the data from any existing wells in the given area. |
Risk Factor | "Risk Factor" for Contingent Resources means the estimated chance, or probability, that the volumes will be commercially extracted. "Risk Factor" for Prospective Resources means the estimated chance, or probability, of geological success, i.e. of finding moveable hydrocarbons. |
SPE | Society of Petroleum Engineers |
Qualified Person's Statement
The 2018 Resource Estimate has been prepared by Dr Bruce Alan McConachie, who is a member of the Australasian Institute of Mining and Metallurgy (AusIMM), AAPG, the Petroleum Exploration Society and SPE. Dr McConachie, an Associate Principal Consultant of SRK, is a geologist with extensive experience in economic resource evaluation and exploration and is deemed to be a qualified person as defined in the AIM Note for Mining and Oil & Gas Companies dated June 2009.
Enquiries:
TomCo Energy plc
Andrew Jones (Chairman) / John Potter (CEO) +44 (0)20 3823 3635
Strand Hanson Limited (Nominated Adviser)
James Harris / Richard Tulloch / James Dance +44 (0)20 7409 3494
Turner Pope (Broker)
Andy Thacker +44 (0)20 3621 4120
For further information, please visit www.tomcoenergy.com
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014.