REG - TomCo Energy PLC - Interim Results
30/06/2023 07:00
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RNS Number : 4553E TomCo Energy PLC 30 June 2023
30 June 2023
TomCo Energy plc
("TomCo", the "Company" or the "Group")
Unaudited interim results for the six-month period ended 31 March 2023
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 2023.
Chairman's Statement
Operational
The Company's primary focus remains on its wholly owned subsidiary, Greenfield
Energy LLC ("Greenfield"), and its plans to pursue the construction of two oil
sands separation plants, capable of processing at least 6,000 tonnes per day
of oil sands at a suitable site held by Tar Sands Holdings II LLC ("TSHII") in
Utah, USA, as well as potentially exploiting other opportunities available to
it.
Post the reporting period end, the Company has continued to seek to secure the
requisite funding package for Greenfield's development, with the primary
scenario involving the potential disposal of a majority stake in Greenfield to
a partner in return for, inter alia, certain upfront cash consideration, a
continuing equity participation for TomCo in Greenfield without the
requirement for further capital contributions from the Company, and the
provision of a sizeable funding package to Greenfield. While taking longer
than hoped, discussions remain ongoing and, based on conversations to date,
the Board remains optimistic that suitable funding arrangements can be
successfully concluded during the remainder of 2023 despite the current
challenging global macroeconomic environment. Following recent agreement
with the vendor of TSHII, the deadline for Greenfield to potentially exercise
its option over the remaining 90% ownership and membership rights and
interests (the "Membership Interests") in TSHII has recently been extended to
31 December 2023.
Permitting for the planned in-situ oil recovery/production wells at TSHII is
ongoing. Labour shortages at the relevant US permitting authority along with a
general increase in the number of permit applications being made has resulted
in significant delays. It is currently hoped that the Company's first
production well permit will be secured in Q3 2023.
Funding activities
Since the Company's financial year end on 30 September 2022, the previously
announced unsecured Convertible Loan facility of £750,000 principal amount,
drawn down in two equal tranches in September and October 2022, was converted
in full together with accrued interest thereon into a total of 232,140,577 new
ordinary shares at an average price of approximately 0.34 pence per share.
( )A total of 105,000,000 two year warrants exercisable at a price of 0.75
pence per share were issued to the Convertible Loan subscribers and the
Company's broker in connection with the facility and remain outstanding. The
proceeds from the facility were utilised, inter alia, to repay a proportion of
the outstanding unsecured loan previously advanced to Greenfield by Valkor Oil
& Gas LLC (the "Valkor Loan"). The principal amount outstanding in respect
of the Valkor Loan is currently approximately £0.47 million which is
repayable on completion of a suitable funding transaction for Greenfield.
On 30 November 2022, the Company raised gross proceeds of £0.925 million via
the placing of 264,285,714 new ordinary shares at a price of 0.35 pence per
share. 15,857,143 two year warrants exercisable at a price of 0.35 pence per
share were issued to the Company's broker in connection with the placing and
remain outstanding. An initial £250,000 tranche of an additional committed
Convertible Loan facility of up to £1m was drawn down in April 2023 (of which
£225,000 principal amount has since been converted to date), however, the
remainder of such facility was subsequently cancelled and materially replaced
by way of a £500,000 gross placing and subscription in June 2023 at a price
of 0.08 pence per share. This funding was secured in order to, inter alia,
further progress Greenfield's short-term plans and preparations in relation to
the TSHII site.
The net proceeds are also being utilised to cover the Company's expenses in
relation to an ongoing exercise seeking to secure potential funding of up to
US$200 million for Greenfield. Whilst there can be no certainty that such
funding negotiations and proposed arrangements will be satisfactorily
concluded, nor as to the precise terms of any such funding package, such
non-equity financing, if secured, would enable Greenfield to acquire the
remaining 90% of the Membership Interests in TSHII and cover the currently
estimated construction costs of an initial 6,000 tonnes per day oil sands
separation plant and the requisite associated supporting infrastructure to
enable the future mining of oil bearing sands at the TSHII site.
Summary
Our continued focus is on progressing our plans for Greenfield and unlocking
the significant potential that we see in the TSHII site and planned extraction
methodology.
Greenfield is engaged in ongoing discussions regarding possible funding
options to potentially achieve the ultimate acquisition of 100% of the TSHII
Membership Interests, as well as the proposed drilling of several oil
production wells and the future construction of the planned initial 6,000
tonnes per day separation plant, whilst progressing other preparatory work.
Whilst there can be no certainty that the Company and Greenfield can secure
the requisite funding and further well permitting required, I am optimistic,
based on discussions with potential funders to date, that the requisite
funding package to implement our plans can be secured during the remainder of
2023 and thank all of our stakeholders for their continued patience and
support.
These continue to be very exciting times for TomCo as we look to realise
Greenfield's significant long- term potential.
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 / Florence Chandler
+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, as amended by virtue of the Market
Abuse (Amendment) (EU Exit) Regulations 2019.
Condensed consolidated statement of comprehensive income
For the six-month period ended 31 March 2023
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 31 March 30 September
2023 2022 2022
Note £'000 £'000 £'000
Other income 86 23 73
Cost of sales - - -
Gross profit/(loss) 86 23 73
Administrative expenses (555) (753) (1,519)
Foreign exchange (losses)/gains (699) 116 990
Operating loss 3 (1,168) (614) (456)
Finance costs (277) (64) (234)
Loss on ordinary activities before taxation (1,445) (678) (690)
Taxation - - -
Loss from continuing operations (1,445) (678) (690)
Loss for the period/year attributable to:
Equity shareholders of the parent (1,445) (678) (690)
(1,445) (678) (690)
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
Other comprehensive income for the year attributable to:
Equity shareholders of the parent 3 (1) 26
Non-controlling interests - (11) (11)
Other comprehensive income 15
3 (12)
Total comprehensive loss attributable to:
Equity shareholders of the parent (1,442) (679) (664)
Non-controlling interests - (11) (11)
(1,442) (690) (675)
Loss per share attributable to the equity shareholders of the parent
Basic & Diluted Loss per share (pence) 4 (0.07) (0.04) (0.04)
Condensed consolidated statement of financial position
As at 31 March 2023
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended 30 September
31 March 31 March
2023 2022 2022
Note £'000 £'000 £'000
Assets
Non-current assets
Intangible assets 5 4,594 3,989 5,033
Property, plant and equipment - - -
Investments at FVTPL 1,619 1,523 1,830
Other receivables 39 26 23
6,252 5,538 6,886
Current assets
Trade and other receivables 116 115 101
Cash and cash equivalents 132 1,124 206
248 1,239 307
Total Assets 6,500 6,777 7,193
Liabilities
Current liabilities
Loans (607) (1,208) (1,144)
Convertible loan-debt element - - (148)
Convertible loan-derivative liability - - (143)
Trade and other payables (130) (384) (346)
(737) (1,592) (1,781)
Net current liabilities (489) (353) (1,474)
Total liabilities (737) (1,592) (1,781)
Total Net Assets 5,763 5,185 5,412
Shareholders' equity
Share capital - - -
Share premium 34,148 32,527 32,527
Warrant reserve 8 338 2,145 1,374
Translation reserve (196) (231) (199)
Retained deficit (28,527) (29,256) (28,290)
Equity attributable to owners of the parent 5,763 5,185 5,412
Total Equity 5,763 5,185 5,412
The above financial information was approved and authorised for issue by the
Board of Directors on 29 June 2023 and was signed on its behalf by:
J
Potter
Director
Condensed consolidated statement of changes in equity
For the six months ended 31 March 2023
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 2021 (audited) - 31,142 2,579 (225) (28,688) 4,808 (443) 4,365
Loss for the period - - - - (678) (678) - (678)
Comprehensive loss for the period - - - (1) - (1) (11) (12)
Total comprehensive loss for the period - - - (1) (678) (679) (11) (690)
Issue of shares (net of costs) - 1,385 - - - 1,385 - 1,385
Purchase of non-controlling interest - - - (5) (460) (465) 454 (11)
Exercise of warrants - - (140) - - - -
140
Expiry of warrants - - (294) - 294 - - -
Share-based payment charge - - - - 136 136 - 136
At 31 March 2022 (unaudited) - 32,527 2,145 (231) (29,256) 5,185 - 5,185
Loss for the period - - - - (12) (12) - (12)
Comprehensive income for the period - - - 27 - 27 - 27
Total comprehensive income for the period - - - 27 (12) 15 - 15
Transfer 5 (5) - - -
Issue of finance 165 - - 165 - 165
Expiry of warrants - - (936) - 936 - - -
Share based payment charge - 47 47
- - - - 47
At 30 September 2022 (audited) - 32,527 1,374 (199) (28,290) 5,412 - 5,412
Loss for the period - - - - (1,445) (1,445) - (1,445)
Comprehensive income for the period - - - 3 - 3 - 3
Total comprehensive loss for the period - - - 3 (1,445) (1,442) - (1,442)
Issue of shares (net of costs) - 1,621 32 - - 1,653 - 1,653
Issue of finance - - 140 - - 140 - 140
Expiry of warrants - - (1,208) - 1,208 - - -
At 31 March 2023 (unaudited) - 34,148 338 (196) (28,527) 5,763 - 5,763
The following describes the nature and purpose of each reserve within owners'
equity:
Reserve Description 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 2023
Unaudited Unaudited Audited
Six months ended 31 March 2023 Six months ended 31 March 2022 Year ended
30 September
2022
Note £'000 £'000 £'000
Cash flows from operating activities
Loss after tax (1,445) (678) (690)
Finance costs 276 64 234
Amortisation of intangible fixed assets - - -
Share-based payment charge - 136 194
Unrealised foreign exchange losses/(gains) 700 (121) (1,039)
(Increase)/decrease in trade and other receivables (9) (11) 24
(Decrease)/increase in trade and other payables (213) 49 5
Cash used in operations (691) (561) (1,272)
Interest received/(paid) (54) - (153)
Net cash outflows from operating activities (745) (561) (1,425)
Cash flows from investing activities
Investment in intangibles 5 (146) (411) (637)
Purchase of investments at FVTPL 6 - (1,115) (1,171)
Purchase of non-controlling interest - (11) (11)
Net cash used in investing activities (146) (1,537) (1,819)
Cash flows from financing activities
Issue of share capital 925 1,460 1,460
Costs of share issue (61) (75) (75)
Settlement of options - - (10)
Loan finance (422) 1,111 973
Convertible loans 375 - 375
Net cash generated from financing activities 817 2,496 2,723
Net (decrease)/increase in cash and cash equivalents (74) 398 (521)
Cash and cash equivalents at beginning of financial period 206 726 726
Foreign currency translation differences - - 1
Cash and cash equivalents at end of financial period 132 1,124 206
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
1. Accounting Policies
Basis of Preparation
The unaudited condensed consolidated interim financial information of TomCo
Energy plc ("TomCo" or the "Company") for the six months ended 31 March 2023,
comprises 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 consolidated 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 2023.
There were no new standards, interpretations and amendments to published
standards effective in the reporting period which had a significant impact on
the Group.
Going concern
As at 29 June 2023, the Group had cash reserves of approximately £415k, and
an outstanding loan due to Valkor Oil & Gas LLC of approximately £0.47
million (approximately US$0.6 million) which is repayable on completion of a
suitable funding transaction for Greenfield.
The Directors have prepared a cash flow forecast for the period to 30 June
2024. The forecast, which includes capital expenditure committed at the date
of this interim report, indicates that the Group will need to raise additional
finance in order to continue as a going concern. In particular, the payment
which is due by Greenfield in respect of the potential exercise of the option
over the remaining 90% Membership Interests in TSHII by 31 December 2023 of
US$17,250,000, requires sufficient additional funding to be raised prior to
December 2023, otherwise such option will lapse. Should the option lapse
because sufficient funding cannot be secured, then the Group's current
business plan would be curtailed but, in the Board's view, the Group would
remain a going concern subject to the occurrence of other currently unforeseen
events.
The Directors note that because of both the lingering economic effects of the
COVID-19 pandemic and the ongoing war in Ukraine there remains considerable
uncertainty in respect of the global economy and oil prices continue to be
volatile, which may have implications with regards to obtaining additional
funding, either for the Group's day-to-day operations or additional capital
expenditure/development activities.
The cash reserves currently held by the Group are insufficient to fund ongoing
overhead costs for the next 12 months. However, based on a history of
successfully raising additional funds when needed, the Directors have a
reasonable expectation that the Group will be able to raise the required
additional funds as necessary.
The above conditions represent a material uncertainty which may cast
significant doubt over the Group's ability to continue as a going concern such
that it may be unable to realise its assets and discharge its liabilities in
the normal course of business. Whilst acknowledging this material uncertainty,
the Directors remain confident of raising additional funds as and when
required such that the Directors consider it appropriate to prepare the
unaudited condensed consolidated interim financial information on a going
concern basis. The unaudited condensed consolidated interim financial
statements do not include the adjustments that would result if the Group was
unable to continue as a going concern.
2. Financial reporting period
The unaudited condensed consolidated interim financial information
incorporates comparative figures for the unaudited six-month interim period to
31 March 2022, and the audited financial year ended 30 September 2022. The
six-month financial information to 31 March 2023 is neither audited nor
reviewed. The Directors consider the unaudited condensed consolidated interim
financial information for the period to be a fair representation of 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 2022 Annual Report and Financial Statements. The comparatives for the full
year ended 30 September 2022 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
2023 2022 2022
£'000 £'000 £'000
The following items have been charged in arriving at operating loss:
Directors' remuneration 232 234 362
Share-based payment charges - 136 183
Auditors' remuneration 21 22 40
Operating leases for land and buildings-short term assets - 12 26
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 period concerned. 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 2023 £'000 Pence
Basic and Diluted EPS
Losses attributable to ordinary shareholders from continuing operations (1,445) 2,140,894,581 (0.07)
Losses Weighted average number of shares Per share amount
Six months ended 31 March 2022 £'000 Pence
Basic and Diluted EPS
Losses attributable to ordinary shareholders from continuing operations (678) 1,573,769,286 (0.04)
Losses Weighted average number of shares Per share amount
Year ended 30 September 2022 £'000 Pence
Basic and Diluted EPS
Losses attributable to ordinary shareholders from continuing operations (690) 1,661,402,854 (0.04)
5. Intangible assets
Oil & Gas Exploration and development licences Oil & Gas Patents and patent applications Oil &Gas Development expenditure Total
£'000 £'000 £'000 £'000
Cost, net of impairment and amortisation
At 30 September 2021 (audited) - - 3,947 3,947
Additions 139 - 272 411
Adjustment to previously recognised asset - - (482) (482)
Translation differences and amortisation 3 - 110 113
At 31 March 2022 (unaudited) 142 - 3,847 3,989
Additions 65 - 161 226
Adjustment to previously recognised asset - - 346 346
Translation differences and amortisation 32 - 440 472
At 30 September 2022 (audited) 239 - 4,794 5,033
Additions 7 - 139 146
Translation differences and amortisation (28) - (557) (585)
At 31 March 2023 (unaudited) 218 - 4,376 4,594
Net book value
At 31 March 2023 (unaudited) 218 - 4,376 4,594
At 30 September 2022 (audited) 239 - 4,794 5,033
At 31 March 2022 (unaudited) 142 - 3,847 3,989
A wholly owned subsidiary of Greenfield, AC Oil LLC, entered into a 10-year
lease from 15 November 2021 to explore for oil, gas, hydrocarbons and all
associated substances over a 320-acre site in Uintah County, Utah, USA owned
by Tar Sands Holdings II LLC.
During the year ended 30 September 2022, creditors of £136,000 in respect of
additions to development expenditure in 2022 were waived.
6. Investment at FVTPL
£'000
At 31 March 2022 1,523
Additions 56
Other comprehensive income-translation differences 251
At 30 September 2022 (audited) 1,830
Other comprehensive income-translation differences (211)
At 31 March 2023 1,619
In November 2021, Greenfield completed the purchase of a 10% ownership
interest in TSHII. This investment is carried at cost. The Group had an option
to purchase the remaining 90% Membership Interests in TSHII by 30 April 2023
for US$16.25 million. An extension to 31 December 2023 was granted to the
Company post the reporting period end and the amount due on potential future
exercise has been increased to US$17.25 million. The option is recorded at its
cost of nil on the basis that there is no reliable fair value for this
instrument.
7. Share Capital
31 March 31 March 30 September
2023 2022 2022
unaudited Unaudited audited
Number of shares Number of shares Number of shares
Issued and fully paid
Number of ordinary shares of no par value 2,244,504,969 1,748,078,678 1,748,078,678
8. Warrants
31 March 31 March 30 September
2023 2022 2022
unaudited Unaudited Audited
Outstanding (number) 162,523,803 584,552,350 452,427,350
Exercisable (number) 162,523,803 584,552,350 452,427,350
Weighted average exercise price (pence) 0.67 0.9 0.88
9. Post reporting date events
a) On 6 June 2023, the Company announced that Greenfield's option to
potentially purchase the remaining 90% Membership Interests in TSHII had been
extended to 31 December 2023 with an increased exercise price of US$17.25m.
b) On 30 March 2023, the Company announced that it had obtained an
additional unsecured committed convertible loan facility of up to £1 million
via a convertible loan note instrument and associated subscription and put
option agreement of which an initial £250,000 tranche was subsequently drawn
down on 24 April 2023. A fixed interest coupon of 5% applied to each sum drawn
down. The conversion price per new ordinary share under the facility was
determined as the lower of: (i) 0.60 pence; and (ii) the volume-weighted
average price of an ordinary share during any five of the fifteen business
days prior to service or deemed service of a conversion notice, as selected by
the noteholder(s) concerned and sourced from Bloomberg L.P., discounted by
15%. By the period end, warrants over 41,666,667 new ordinary shares at an
exercise price of 0.60p per share had been issued to the convertible loan
subscribers in connection with the facility, exercisable over 3 years.
Warrants over a further 41,666,667 new ordinary were issued on similar terms
to the subscribers on drawdown of the initial tranche, together with warrants
over 10,000,000 new ordinary shares at an exercise price of 0.60p per share
exercisable over 2 years to the Company's broker. To date, £225k of the
initial tranche, together with accrued interest thereon, has been converted
into, in aggregate, 150,564,248 new ordinary shares at an average price of
approximately 0.157 pence per share.
c) On 14 June 2023, the Company announced that the abovementioned
convertible loan facility had been cancelled and the remaining principal
amount materially replaced by a fundraising involving the issue of, in
aggregate, 625,000,000 new ordinary shares at a price of 0.08p per share, to
raise £500,000 gross. Warrants over 30,000,000 new ordinary shares at an
exercise price of 0.08p per share exercisable over 2 years were issued to the
Company's broker in connection with such fundraising.
- ENDs -
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