REG - TomCo Energy PLC - Interim Results
22/06/2021 07:00
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RNS Number : 6198C TomCo Energy PLC 22 June 2021
22 June 2021
TOMCO ENERGY PLC
("TomCo", the "Company" or the "Group")
Unaudited interim results for the six-month period ended 31 March 2021
TomCo Energy plc (AIM: TOM), the US operating oil development group focused on
using innovative technology to unlock unconventional hydrocarbon resources,
announces its unaudited interim results for the six-month period ended 31
March 2021.
CHAIRMAN'S STATEMENT
Operational
Our Greenfield joint venture with Valkor LLC has made progress despite the
COVID-19 pandemic. The oil sands plant at Asphalt Ridge developed by Petroteq
Energy Inc (the "POSP") and enhanced by Greenfield has now been brought into
sustained production, extracting oil from sands in a manner that we believe
could be scaled up to be commercially viable in large, purpose-built plants,
with a target of being capable of producing 10,000 barrels of oil per day.
In late May 2021, we received a draft of the Front-End Engineering and Design
("FEED") study that, whilst still being reviewed, is encouraging. Taken
together with the practical demonstration of the process via the POSP test
plant, such draft report has led Greenfield to most recently move ahead with
investigating the possibility of acquiring up to a 100 per cent. interest in a
large oil sands site in Utah via Tar Sands Holdings II LLC ("TSHII") believed
to be suitable for the construction of a potential initial commercial scale
plant. Alongside the potential acquisition, Greenfield is also in the early
stages of exploring possible financing opportunities for the potential
project.
We have continued to postpone operations in respect of TurboShale's RF
Technology, pending a return to normality after the COVID-19 pandemic abates.
Details of our progress during the reporting period, and more recently, is
outlined in the various regulatory announcements the Company has issued. We
will continue to provide regular updates as matters progress and believe that
Greenfield is well positioned to achieve its goals.
Board changes
At the time of our last fund-raising, in the autumn of 2020, Stephen West and
Alexander Benger stepped down from the Board to focus on commitments
elsewhere, I became Chairman, and we appointed two new non-executives, Richard
Horsman and Robb Kirchner. In the spring of 2021, Robb Kirchner left us to
pursue other opportunities, but I am delighted that we were able to attract
Louis Castro to join our Board. Louis is widely respected in our sector and
brings very valuable experience and judgment relevant to the Company's future
progression.
Funding
During the reporting period, we raised £3.5m (gross) via a placing in
November 2020, through the issue of 777,777,777 new ordinary shares at a price
of 0.45 pence per share, with the net proceeds being used to provide general
working capital and to fund Greenfield's development.
As at 21June 2021, TomCo had approximately £1,390,000 of cash reserves
available to it. The Board believes that the Group has sufficient funds to
cover its expected and normal outgoings for the next 12 months. However, we
anticipate needing to raise additional funds in the event a decision is made
to exercise our option to acquire the abovementioned site and commence work on
our first full-scale oil sands plant and related matters. The contractual
balance due if Greenfield was to assume full ownership of the site via TSHII
is up to approximately US$16 million (dependent on the timing of the option
exercise) and, at this stage, we envisage that Greenfield would require
funding in excess of US$110 million for the construction of the first plant,
the vast majority of which it would seek to finance by way of debt. Should
Greenfield proceed with the acquisition, TomCo will work closely with its
joint venture partner to explore the most appropriate financing solutions for
the requisite funding.
I would like to thank shareholders for their continued support and
encouragement through recent challenging times. We remain focused on meeting
the further challenges that lie ahead.
Malcolm Groat
Non-Executive Chairman
Enquiries:
TomCo Energy plc
Malcolm Groat (Chairman) / John Potter (CEO)
+44 (0)20 3823 3635
Strand Hanson Limited (Nominated Adviser)
James Harris / Matthew Chandler
+44 (0)20 7409 3494
Novum Securities Limited (Broker)
Jon Belliss / Colin Rowbury
+44 (0)20 7399 9402
IFC Advisory Limited (Financial PR)
Tim Metcalfe / Graham Herring
+44 (0)20 3934 6630
For further information, please visit www.tomcoenergy.com
(http://www.tomcoenergy.com) .
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018.
Condensed consolidated statement of comprehensive income
For the six-month period ended 31 March 2021
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 31 March 30 September
2021 2020 2020
Notes £'000 £'000 £'000
Revenue - - -
Cost of sales - - -
Gross profit/(loss) - - -
Administrative expenses (738) (377) (1,031)
Operating loss 3 (738) (377) (1,031)
Finance income/(costs) - 1 1
Share of loss of joint venture (39) - (40)
Loss on ordinary activities before taxation (777) (376) (1,070)
Taxation - - -
Loss for the period (777) (376) (1,070)
Loss for the period/year attributable to:
Equity shareholders of the parent (739) (355) (1,028)
Non-controlling interests (38) (21) (42)
(777) (376) (1,070)
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations (585) (107) 350
Other comprehensive income for the year attributable to:
Equity shareholders of the parent (598) (108) (356)
Non-controlling interests 13 1 6
Other comprehensive income (107) (350)
(585)
Total comprehensive loss attributable to:
Equity shareholders of the parent (1,337) (463) (1,384)
Non-controlling interests (25) (20) (36)
(1,362) (483) (1,420)
Loss per share attributable to the equity shareholders of the parent
Basic & Diluted Loss per share (pence) 4 (0.06) (0.16) (0.30)
Condensed consolidated statement of financial position
As at 31 March 2021
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended 30 September
31 March 31 March
2021 2020 2020
Note £'000 £'000 £'000
Assets
Non-current assets
Intangible assets 5 8,192 9,221 8,834
Property, plant and equipment 382 425 411
Investment in joint venture 6 1,859 - 1,224
Other receivables 24 27 26
10,457 9,673 10,495
Current assets
Trade and other receivables 138 92 118
Cash and cash equivalents 2,250 751 334
2,388 843 452
Total Assets 12,845 10,516 10,947
Liabilities
Current liabilities
Trade and other payables (228) (353) (215)
(228) (353) (215)
Net current assets 2,160 490 237
Total liabilities (228) (353) (215)
Total Net Assets 12,617 10,163 10,732
Shareholders' equity
Share capital - - -
Share premium 7 30,271 28,784 29,222
Warrant reserve 8 3,466 354 1,288
Translation reserve (316) 530 282
Retained deficit (20,606) (19,348) (19,887)
Equity attributable to owners of the parent 12,815 10,320 10,905
Non-controlling interests (198) (157) (173)
Total Equity 12,617 10,163 10,732
The financial information was approved and authorised for issue by the Board
of Directors on 21June 2021 and was signed on its behalf by:
J
Potter
Director
Condensed consolidated statement of changes in equity
For the six months ended 31 March 2021
Note Share Share Warrant Translation Retained Total Non-controlling Total
capital premium reserve reserve deficit interest equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 30 September 2019 (audited) - 28,247 65 638 (19,012) 9,938 (137) 9,801
Loss for the period - - - - (355) (355) (21) (376)
Comprehensive loss for the period - - - (108) - (108) 1 (107)
Total comprehensive loss for the period - - - (108) (355) (463) (20) (483)
Issue of shares (net of costs) - 537 327 - - 864 - 864
Expiry of warrants - - (42) - 42 - - -
Share based payment credit - 4 - (23) (19) - (19)
At 31 March 2020 (unaudited) - 28,784 354 530 (19,348) 10,320 (157) 10,163
Loss for the period - - - - (673) (673) (21) (694)
Comprehensive loss for the period - - - (248) - (248) 5 (243)
Total comprehensive loss for the period - - - (248) (673) (921) (16) (937)
Issue of shares (net of costs) - 329 1,050 - - 1,379 - 1,379
Exercise of warrants - 109 (114) - 114 109 - 109
Expiry of warrants - - (1) - 1 - - -
Share based payment charge - 19 18
- - (1) - 18
At 30 September 2020 (audited) - 29,222 1,288 282 (19,887) 10,905 (173) 10,732
Loss for the period - - - - (739) (739) (38) (777)
Comprehensive loss for the period - - - (598) - (598) 13 (585)
Total comprehensive loss for the period - - - (598) (739) (1,337) (25) (1,362)
Issue of shares (net of costs) - 1,049 2,178 - - 3,227 - 3,227
Share-based payment credit - - - - 20 20 - 20
At 31 March 2021 (unaudited) - 30,271 3,466 (316) (20,606) 12,815 (198) 12,617
The following describes the nature and purpose of each reserve within owners'
equity:
Reserve Descriptions and purpose
Share capital Amount subscribed for share capital at nominal value, together with transfers
to share premium upon redenomination of the shares to nil par value.
Share premium Amount subscribed for share capital in excess of nominal value, together with
transfers from share capital upon redenomination of the shares to nil par
value.
Warrant reserve Amounts credited to equity in respect of warrants to acquire ordinary shares
in the Company.
Translation reserve Amounts debited or credited to equity arising from translating the results of
subsidiary entities whose functional currency is not sterling.
Retained deficit Cumulative net gains and losses recognised in the consolidated statement of
comprehensive income.
Non-Controlling Interests Amounts attributable to the non-controlling interest in TurboShale Inc.
Condensed consolidated statement of cash flows
For the period ended 31 March 2021
Unaudited Unaudited Audited
Six months ended 31 March 2021 Six months ended 31 March 2020 Year ended
30 September
2020
Note £'000 £'000 £'000
Cash flows from operating activities
Loss after tax (777) (376) (1,070)
Finance (income)/costs - (1) (1)
Amortisation of intangible fixed assets 3 3 6
Share-based payment (credit)/charge 20 (19) (1)
Unrealised foreign exchange losses 172 - 81
Share of loss of joint venture 39 - 40
Decrease/(increase) in trade and other receivables (20) 5 (21)
(Decrease)/increase in trade and other payables 13 (239) (384)
Cash used in operations (550) (627) (1,350)
Interest received/(paid) - 1 (1)
Net cash outflows from operating activities (550) (626) (1,349)
Cash flows from investing activities
Investment in intangibles 5 - (124) (29)
Investment in joint venture 6 (761) - (1,279)
Net cash used in investing activities (761) (124) (1,308)
Cash flows from financing activities
Issue of share capital 3,500 864 2,535
Costs of share issue (273) - (182)
Net cash generated from financing activities 3,227 864 2,353
Net increase/(decrease) in cash and cash equivalents 1,916 114 (304)
Cash and cash equivalents at beginning of financial period 334 639 639
Foreign currency translation differences - (2) (1)
Cash and cash equivalents at end of financial period 2,250 751 334
UNAUDITED NOTES FORMING PART OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 31 March 2021
1. Accounting Policies
Basis of Preparation
The unaudited condensed consolidated interim financial statements of TomCo
Energy plc ("TomCo" or the "Company") for the six months ended 31 March 2021,
incorporates the financial information of the Company and its subsidiaries
(together referred to as the "Group").
The unaudited condensed interim financial information for the Group has been
prepared using the recognition and measurement requirements of International
Financial Reporting Standards (IFRS and IFRIC interpretations) issued by the
International Accounting Standards Board ("IASB") as adopted for use in the
EU, with the exception of IAS 34 Interim Financial Reporting that is not
mandatory for companies quoted on the AIM market of the London Stock Exchange.
The unaudited condensed interim financial information has been prepared
using the accounting policies which will be applied in the Group's statutory
financial information for the year ending 30 September 2021.
There were no new standards, interpretations and amendments to published
standards effective in the period which had a significant impact on the Group.
Going concern
For the six months ended 31 March 2021, the Group recorded a loss of
approximately £777,000 and had net cash outflows from operating and investing
activities of approximately £1,311,000. As at 21 June 2021, TomCo had
approximately £1,390,000 of cash available to it. Accordingly, the Board
believes that the Group has sufficient funds to cover its expected and normal
outgoings for the next 12 months and accordingly the unaudited condensed
consolidated interim financial statements have been prepared on the basis that
the entity is a going concern.
However, in the event a decision is made to exercise the Group's option to
acquire up to a 100% interest in Tar Sands Holdings II LLC ("TSHII") or any
additional unplanned expenditure is required in respect of Greenfield, then it
is anticipated that additional funds would need to be raised to ensure that
sufficient headroom is maintained for the Group's working capital
requirements.
Management has successfully raised funds in the past, but there is no
guarantee that adequate funds will be available when required going forwards.
Should the entity not be able to continue as a going concern, it may be
required to realise its assets and discharge its liabilities other than in the
ordinary course of business, and at amounts that differ from those stated in
the financial statements. This interim financial report does not include any
adjustments relating to the recoverability and classification of recorded
asset amounts or liabilities that might be necessary should the entity not
continue as a going concern.
2. Financial reporting period
The unaudited condensed interim financial information incorporates comparative
figures for the unaudited six-month interim period to 31 March 2020 and the
audited financial year ended 30 September 2020. The six-month financial
information to 31 March 2021 is neither audited nor reviewed. In the opinion
of the Directors the unaudited condensed interim financial information for the
period presents fairly the financial position, results from operations and
cash flows for the period in conformity with the generally accepted accounting
principles consistently applied.
The financial information contained in this unaudited interim report does not
constitute statutory accounts as defined by the Isle of Man Companies Act
2006. It does not include all disclosures that would otherwise be required
in a complete set of financial statements and should be read in conjunction
with the 2020 Annual Report and Financial Statements. The comparatives for
the full year ended 30 September 2020 are not the Group's full statutory
accounts for that year. The auditors' report on those accounts was
unqualified.
3. Operating Loss
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2021 2020 2020
£'000 £'000 £'000
The following items have been charged in arriving at operating loss:
Directors' remuneration 160 264 360
Share-based payment (credit)/charges for directors 20 (19) (1)
Auditors' remuneration 16 15 33
Operating leases for land and buildings-short term assets 4 19 52
Directors' remuneration for the period ended 31 March 2020 included £150,000
of compensation and ex gratia payments to Andrew Jones (former Executive
Chairman), which was settled post that period end. Of the credit to profit
and loss for share-based payments in 2020, approximately £35,000 arose from
the reversal of charges previously recognised for unvested options awarded to
Mr Jones that lapsed, and the replacement of the lapsed options with a similar
number of warrants exercisable on similar terms.
4. Loss per share
Basic loss per share is calculated by dividing the losses attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year. Reconciliations of the losses and weighted
average number of shares used in the calculations are set out below.
Losses Weighted average number of shares Per share amount
Six months ended 31 March 2021 £'000 Pence
Basic and Diluted EPS
Losses attributable to ordinary shareholders on continuing operations (739) 1,193,585,125 (0.06)
Losses Weighted average number of shares Per share amount
Six months ended 31 March 2020 £'000 Pence
Basic and Diluted EPS
Losses attributable to ordinary shareholders on continuing operations (355) 221,025,507 (0.16)
Losses Weighted average number of shares Per share amount
Year ended 30 September 2020 £'000 Pence
Basic and Diluted EPS
Losses attributable to ordinary shareholders on continuing operations (1,028) 339,346,801 (0.30)
5. Intangible assets
Oil & Gas Exploration and development licences Oil & Gas Patents and patent applications Total
£'000 £'000 £'000
Cost, net of impairment and amortisation
At 30 September 2019 (audited) 9,200 22 9,222
Additions 124 - 124
Translation differences and amortisation (122) (3) (125)
At 31 March 2020 (unaudited) 9,202 19 9,221
Additions (87) - (87)
Translation differences and amortisation (296) (4) (300)
At 30 September 2020 (audited) 8,819 15 8,834
Additions - - -
Translation differences and amortisation (638) (4) (642)
At 31 March 2021 (unaudited) 8,181 11 8,192
Net book value
At 31 March 2021 (unaudited) 8,181 11 8,192
At 30 September 2020 (audited) 8,819 15 8,834
At 31 March 2020 (unaudited) 9,202 19 9,221
The exploration and development licences comprise nine Utah oil shale leases
covering approximately 15,488 acres. In respect of leases ML 49570 and ML
49571, independent natural resources consultants SRK Consulting (Australasia)
Pty Ltd, part of the internationally recognised SRK Group, reported in March
2019 best estimate Contingent Resources (2C) of, in aggregate, 131.3 million
barrels ("MM bbl") of oil assessed under Petroleum Resources Management System
("PRMS") guidelines, plus a best estimate Prospective Resource (2U) of, in
aggregate, 442.8 MM bbl oil across the two leases. This included the
Holliday A Block, where two field tests have been undertaken to date, with 2C
Contingent Resources of 57.3 MM bbl of oil and 2U Prospective Resources of
84.7 MM bbl of oil. The Directors continue to consider the Holliday A Block
to be prospective and are seeking methods of extracting the shale oil through
development of TurboShale's RF technologies. The claim areas and the Group's
interest in them are:
Asset Per cent Licence Expiry Date Licence Area (Acres)
Interest Status
ML 49570 100 Prospect 31/12/2024 1,638.84
ML 49571 100 Prospect 31/12/2024 1,280.00
ML 48801 100 Prospect 01/10/2021 1,918.50
ML 48802 100 Prospect 01/10/2021 1,920.00
ML 48803 100 Prospect 01/10/2021 1,920.00
ML 48806 100 Prospect 01/12/2023 1,880.00
ML 49236 100 Prospect 01/12/2023 2,624.21
ML 49237 100 Prospect 01/12/2023 1,666.67
ML 50151 100 Prospect 30/11/2025 640.00
In performing an assessment of the carrying value of the exploration licences
at the reporting date, the Directors concluded that it was not appropriate to
book an impairment given the measured resource, the licence term and the
continued plans to explore and develop the licence areas, including the new
technologies which TurboShale is seeking to develop.
The outcome of ongoing exploration, and therefore whether the carrying value
of the exploration licences will ultimately be recovered, is inherently
uncertain and is dependent upon successful development of a commercially
viable extraction technology. If additional funding to develop TurboShale's
RF Technology was not to be made available to the Group when required or
alternative commercially viable extraction technologies cannot be developed,
the carrying value of the intangible assets might need to be impaired.
The Group continues to renew the leases set out above as and when they expire
and has no reason to believe that the leases will not continue to be capable
of renewal in the future.
Further field tests of the TurboShale RF Technology were postponed because of
the COVID-19 pandemic. The Board plans to review the position in Q3 2021, but
currently intends to resume the testing programme when conditions permit.
6. Investment in joint venture
Carrying value under equity method £'000
At 31 March 2020 -
Cost 1,279
Share of loss of joint venture (40)
Other comprehensive income-translation differences (15)
At 30 September 2020 1,224
Share of loss of joint venture (39)
Other comprehensive income-translation differences (87)
At 31 March 2021 1,098
Loans £'000
At 31 March 2020 -
Cost -
At 30 September 2020 -
Loans made 761
At 31 March 2021 761
Total investment in joint venture at 31 March 2021 1,859
During the year ended 30 September 2020, the Group formed a joint venture,
Greenfield Energy LLC ("Greenfield"), with Valkor LLC ("Valkor"). Greenfield
is incorporated in Utah, USA. Its initial purpose is the development of a
plant utilising technology licensed or assigned to it by third parties for
Valkor to recover oil from oil sands in Utah, which is considered strategic to
the Group's activities. Both the Group and Valkor hold 50% ownership interests
in Greenfield.
There is no quoted market price for the Group's investment in Greenfield.
Loans made to Greenfield carry interest at 3% above the Bank of England's base
rate and are repayable after five years.
7. Share Capital
31 March 31 March 30 September
2021 2020 2020
unaudited Unaudited audited
Number of shares Number of shares Number of shares
Issued and fully paid
Number of ordinary shares of no par value 1,451,412,012 275,759,235 673,634,235
8. Warrants
31 March 31 March 30 September
2021 2020 2020
unaudited Unaudited Audited
Outstanding (number) 1,041,457,112 82,341,515 269,791,515
Exercisable (number) 1,041,457,112 82,341,515 269,791,515
Weighted average exercise price (pence) 1.0 1.5 1.0
9. Post balance sheet events
Greenfield entered into a membership interest purchase agreement in June 2021
with Endeavour Capital Group LLC ("Endeavour") and Tar Sands Holdings II LLC
("TSHII") with respect to the potential acquisition by Greenfield of up to
100% of the ownership and membership rights and interests in TSHII (the
"Membership Interests"). TSHII owns approximately 760 acres of land and
certain non-producing assets in Uintah County, Utah, USA.
Robert Kirchner resigned as a non-executive director on 4 June 2021. Louis
Castro joined the board as a non-executive director on 19 April 2021.
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