REG - TomCo Energy PLC - Results for the year ended 30 September 2021
01/04/2022 07:00
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RNS Number : 8669G TomCo Energy PLC 01 April 2022
1 April 2022
TOMCO ENERGY PLC
("TomCo" or the "Company" or, with its subsidiaries, the "Group")
Final Results for the year ended 30 September 2021
TomCo Energy plc (AIM: TOM), the US operating oil development group focused on
using innovative technology to unlock unconventional hydrocarbon resources,
announces its audited results for the year ended 30 September 2021.
The 2021 Annual Report and Financial Statements have been published and made
available on the Company's website at www.tomcoenergy.com
(http://www.tomcoenergy.com) .
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.
CHAIRMAN'S STATEMENT
I am pleased to be delivering my second Chairman's statement to the
shareholders of TomCo Energy plc, together with the Annual Report and
Financial Statements for the year ended 30 September 2021.
Operational Review
Greenfield Energy LLC
The primary focus for the Company during the year was on Greenfield Energy LLC
("Greenfield") and its plans to pursue the construction of an initial 5,000
barrels of oil per day ("bopd") production facility at the earliest
opportunity, as well as exploiting other opportunities available to it.
Whilst the shadow of Covid-19 still darkens the global economic picture,
though much less so than this time last year, we have managed to make
considerable progress during the financial year under review.
During the first half of the year, the focus of Greenfield was on the
third-party oil sands plant at Asphalt Ridge. This was enhanced and brought
into trial production, extracting oil from sands in a manner that we believe
could be scaled up to be commercially viable in large, purpose-built plants.
Importantly, the work undertaken by Greenfield in modifying, upgrading and
operating the test plant for a temporary lease period provided sufficient
information for a FEED (Front-End Engineering and Design) study to be
completed, together with a third-party verification exercise.
The completed FEED study and third-party report was received at the end of
July 2021. The FEED study outlined better economics for the proposed plant
than we had initially envisaged, and together with the third-party report
provided verification that the proposed technical approach is appropriate.
Further to an agreement reached with our former 50% joint venture partner,
Valkor LLC ("Valkor"), as announced on 26 August 2021, TomCo now owns 100% of
Greenfield, with full control, thereby affording TomCo's shareholders the
opportunity to fully benefit from Greenfield's significant potential, whilst
retaining Valkor as a valued stakeholder and future substantial shareholder in
the Company. The consideration for the acquisition only becomes payable upon
Greenfield receiving funds from, or drawing upon, a loan or credit facility in
connection with the construction of an oil sands processing facility as
specified in the FEED study, which I personally believe serves to demonstrate
Valkor's confidence in our plans and ability to deliver.
Prior to this, on 9 June 2021, we announced Greenfield's potential
acquisition of up to 100% of the ownership and membership rights and interests
in Tar Sands Holdings II LLC ("TSHII") (the "Membership Interests"). The
successful completion of the acquisition of an initial 10% of the Membership
Interests was announced post year end on 16 November 2021. Greenfield
retains an exclusive option, at its sole discretion, to acquire the remaining
90% of the Membership Interests for additional cash consideration up to 31
December 2022, as detailed in the 9 June 2021 announcement.
TSHII owns approximately 760 acres of land and certain non-producing assets
(the "Site") in Uintah County, Utah, USA. Subject to securing the requisite
funding, Greenfield plans to use the Site for the potential future mining of
oil sands and construction of a commercial scale processing plant. The Site
has existing infrastructure, plant and equipment, together with an existing
Large Mine Permit No. M0470032, that could facilitate any future development
by Greenfield.
Alongside the acquisition of the initial 10% of the Membership Interests, a
newly incorporated subsidiary of Greenfield was granted a lease over
approximately 320 acres of the 760-acre site owned by TSHII. The lease
provides Greenfield's subsidiary with the exclusive right to explore, drill,
and mine for, and extract, store, and remove oil, gas, hydrocarbons, and other
associated substances, together, inter alia, with the right to erect,
construct and use such plant and equipment and infrastructure as required.
Greenfield is in advanced discussions with potential off-takers of both oil
and sand from the TSHII site and it appears ideally suited for the future
construction, subject to funding, of Greenfield's first commercial scale
plant. Whilst there can be no certainty that Greenfield can secure the
required funding to complete the acquisition of 100% of the Membership
Interests, I remain optimistic, based on discussions with potential funders to
date, that acquisition of the remaining 90% can be completed at a cost of
$16.25 million and the required funding secured. If the funding is not
secured, our current business plan would be curtailed, but a viable project,
albeit a fraction of the size, would remain.
To assist Greenfield in progressing its plans for the TSHII site and
obtaining further funding to: (i) acquire the remaining 90% Membership
Interest in TSHII, (ii) drill a number of production wells on the Site and
(iii) pursue the future construction of an initial 5,000 bopd facility at the
earliest opportunity, the Company has engaged specialist oil and gas industry
advisers experienced in the structuring and securing of such financings.
They are currently exploring a number of potential funding options.
Additionally, Greenfield has commenced detailed engineering and design work
in connection with its future plans including engaging Stantec Inc, a global
design and delivery firm with extensive experience in the oil and gas and
mining sectors, on mine planning, and is working with Netherland Sewell &
Associates, global petroleum consultants, on a reserves report, together with
other preparatory work. This is in addition to the continuing detailed
engineering design and planning work being undertaken by Valkor.
TurboShale RF Technology
During the previous financial year, at the onset of the Covid-19 pandemic,
we took the decision to put the activities in relation to our TurboShale radio
frequency technology on hold in order to focus our resources on Greenfield.
This has remained the case throughout 2021 and, post the year end, we have
purchased the remaining 20% of our subsidiary holding the technology and are
considering how best to proceed with it during 2022.
Pending that decision, we have recognised an impairment provision against
all of the Turboshale and Oil Mining Company assets in these 2021 financial
statements.
Corporate
As expected, the year under review was a busy one for TomCo and one of
significant progress. During the year, we raised £3.5 million (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.
Following the financial year-end, the Company raised a further £1.25 million
(gross) in a placing of 250,000,000 new ordinary shares, at a price of 0.50
pence per share in January 2022.
In early November 2020, Stephen West and Alexander Benger stepped down from
the Board to focus on their other commitments elsewhere, I assumed the role of
Chairman, and we appointed two new non-executive directors, Richard Horsman
and Robert Kirchner. Robert subsequently resigned in June 2021 to focus on
his other commitments, but we were very fortunate in securing Louis Castro's
services as a non-executive director in April 2021. Louis has brought to
TomCo significant sector experience and governance expertise, including as a
former AIM Nominated Adviser.
Towards the end of January 2022, Richard Horsman left the Company to pursue
his other interests and we recruited as his successor an oil industry expert,
Zac Phillips, who had a good pre-existing knowledge of our business already
via his work as a consultant to Greenfield.
I am grateful to my colleagues for their excellent contribution and
particularly to John Potter for his outstanding work as our Chief Executive.
The Company's activities are continuing to evolve and we will look to add
further relevant expertise as appropriate going forward.
Outlook and Summary
The Board appreciates the strong continuing support of our shareholders as
we continue to progress our plans for Greenfield.
Greenfield is engaged in ongoing discussions regarding funding options to
potentially achieve the ultimate acquisition of 100% of the TSHII Membership
Interests, together with the proposed drilling of a number of production oil
wells and further construction of the planned first 5,000 barrels of oil per
day production plant, whilst progressing other preparatory work. Whilst
there can be no certainty that Greenfield can secure the requisite funding or
the further permitting required, I am optimistic, based on discussions with
potential funders to date, that the required funding to implement our plans
can ultimately be secured.
These are very exciting times for TomCo as we look to realise Greenfield's
significant potential.
Malcolm Groat
Chairman
31 March 2022
DIRECTORS' REPORT
The Directors submit their report and the financial statements of the Group
for the year ended 30 September 2021.
PRINCIPAL ACTIVITY
The principal activity of the Group is that of deploying technology on its oil
shale leases and other unconventional oil resources for future production.
RISK ASSESSMENT
The Group's oil and gas activities are subject to a range of financial and
operational risks which can significantly impact on its performance, with the
key risks for the year ended 30 September 2021 set out below.
Operational risk
During the financial year, the Company completed all the engineering due
diligence on the oil sands separation process and completed the third-party
verification and design for a 5,000 barrels of oil per day plant. Efforts have
now moved towards securing the requisite funding for plant design and
potential future construction. While some of the project risk has been reduced
by way of securing a suitable site that has an appropriate pre-existing
large mining permit, the site itself contains the remnants of a third-party
facility that has not been in operation for more than 10 years. As a result, a
detailed review of the historic plant has been arranged to make sure that
there are no potential liabilities.
Risks relating to environmental, health and safety and other regulatory
standards
The Group's future extraction activities are subject to various US federal and
state laws and regulations relating to the protection of the environment
including the obtaining of appropriate permits and approvals by relevant
environmental authorities. Such regulations typically cover a wide variety of
matters including, without limitation, prevention of waste, pollution and
protection of the environment, labour regulations and worker safety.
Furthermore, the future introduction or enactment of new laws, guidelines and
regulations could serve to limit or curtail the growth and development of the
Group's business or have an otherwise negative impact on its operations. The
Group ensures that it complies with the relevant laws and regulations in force
in the jurisdictions in which it operates.
Liquidity and interest rate risks
The Group is ultimately dependent on sources of equity and/or debt funding to
develop Greenfield and any other recovery technology and in turn the Group's
exploration assets and to meet its day-to-day capital commitments and
overheads. Cash forecasts identifying the liquidity requirements of the Group
are produced frequently and are reviewed regularly by management and the
Board. This strategy will continually be reviewed in light of developments
with existing projects and new project opportunities as they arise. For
further information regarding the Group's cash resources and future funding
requirements, refer to the 'Going Concern' section below.
Currency risk
Due to the limited income and expenses denominated in foreign currencies, it
was not considered cost effective to manage transactional currency exposure on
an active basis. However, as the financial statements are reported in
sterling, any movements in the exchange rate of foreign currencies against
sterling may affect the Group's statements of comprehensive income and
financial position. The Group holds some cash in US dollars to mitigate the
foreign exchange risk and keeps its currency profile under review.
COVID-19 risk
In 2021 while COVID-19 continues to have an adverse impact on the global
economy, oil prices were, absent the effects of the war in Ukraine, projected
to continue to recover during 2022 and beyond. The Group's continued activity
with respect to Greenfield is not currently expected to be significantly
affected by COVID-19.
Financial instruments
It was not considered an appropriate policy for the Group to enter into any
hedging activities or trade in any financial instruments. Further information
can be found in Note 22.
RESULTS AND DIVIDENDS
The statement of comprehensive income is set out on page 20. The Directors do
not propose the payment of a dividend (2020: £nil).
REVIEW OF THE KEY EVENTS DURING THE YEAR
TurboShale
There were no further developments in respect of our TurboShale technology
during the financial year. In the period since the end of the financial year,
the remaining 20% of TurboShale not owned by TomCo has been acquired and the
Board will review the next steps for TurboShale during H1 2022. In the
meantime, an impairment provision has been recognised against its assets.
Greenfield Energy LLC
Our joint venture company took over all operations at the Petroteq Oil Sands
Plant (POSP) in July 2020 and through January 2021 made the modifications
identified by Valkor to help improve the separation process. The start-up of
the plant occurred in January 2021 during which further additions were
identified as being required, with such upgrades being completed in March
2021. Between March and the end of June 2021 the process was assessed, and a
testing schedule completed. A third-party engineering company, Kahuna Ventures
LLC observed the plant operations and completed an assessment with their
report being submitted in July 2021. As a result of the testing programme and
Kahuna's independent report, Crosstrails Engineering LLC (a Valkor subsidiary)
was able to complete a Front-End Engineering and Design (FEED) study for a
5,000 barrels of oil per day production plant in August 2021.
During the financial year, Netherland, Sewell & Associates, Inc (NSAI)
were engaged to produce a reserves report on the oil sands resource contained
within the Tar Sands Holdings II LLC acreage. Further to an agreement reached
with Valkor LLC ("Valkor"), as announced on 26 August 2021, TomCo now owns
100% of Greenfield, with full control, thereby affording TomCo's shareholders
the opportunity to fully benefit from Greenfield's significant potential,
whilst retaining Valkor as a valued stakeholder and future substantial
shareholder in the Company.
Financing
During the financial year, TomCo completed one equity fund raise involving the
issue of 777,777,777 new ordinary shares and 388,888,888 new warrants, raising
£3,500,000 (gross). The funds were deployed as a loan to Greenfield to assist
it in securing the Tar Sands Holdings II LLC entity that holds 760 acres of
land, with a pre-existing Large Mining Permit, Greenfield holds a multi-site
licence for deployment of the Oil Sands Technology, as well as for general
working capital purposes.
Following the end of the financial year, the Company undertook a further
placing of 250,000,000 new ordinary shares, raising £1,250,000 (gross). These
funds are to be used to cover the costs of drilling 3 exploration wells on the
TSHII site and the anticipated costs of the due diligence process in seeking
the requisite funding for a 5,000 barrel per day oil sand separation plant.
Additionally, the funds were used to complete the purchase of the remaining
20% of TurboShale, not previously owned by TomCo and to provide additional
working capital reserves for the group.
TomCo also secured a loan from Valkor Oil and Gas LLC of US$1,500,000 in order
to complete the purchase of 10% of Tar Sands Holdings II LLC. Such loan is
repayable by Greenfield through a number of potential options, or combination
of such options, at its sole election, such combination adding up to the
US$1.5 million principal amount of the loan, plus any applicable interest or
fees incurred. The repayment options include granting a share of potential net
production revenues to offset initially the principal amount and for a period
of five years thereafter from any oil well(s) planned to be drilled on a
defined lease area, but for which the requisite further funding and permits
have not yet been secured; and/or straight repayment of the principal amount
plus interest and fees amounting to 15% of the principal amount of the loan,
payable on the maturity date. In any event, unless a production share is
granted, or both parties agree an extension to the repayment date, a minimum
of US$1.5 million must be repaid on or before 30 May 2022. To the extent that
any part of the principal amount has not been paid by the scheduled maturity
date (which may be extended by mutual agreement of the parties) then interest
of 2% per month shall be applied to such unpaid amount from time to time until
it has been repaid in full.
Directors
The Directors who served on the Board during the year to 30 September 2021 and
to date were as follows:
Malcolm Groat
John Potter
Richard Horsman (appointed 1 November 2020; resigned 24 January 2022)
Robert Kirchner (appointed 1 November 2020; resigned 4 June 2021)
Louis Castro (appointed 19 April 2021)
Zac Phillips (appointed 24 January 2022)
Directors' interests in the ordinary shares of the Company, including family
interests, as at 30 September 2021 were as follows:
30 September 2021 30 September 2020 (or date of appointment)
Ordinary shares of nil par value Share warrants Share options Ordinary shares of nil par value Share warrants Share options
M. Groat 11,887 - 20,380,952 11,887 - 2,380,952
J. Potter 26,500 - 52,714,285 26,500 - 7,714,285
R. Horsman (resigned 24 January 2022) - - 7,500,000 - - -
R. Kirchner (resigned 4 June 2021) - - - - -
-
L. Castro - - 15,000,000 - - -
38,387 - 95,595,237 38,387 - 10,095,237
Details of the remuneration, share warrants and share options can be found in
the Remuneration Committee Report and Notes 7, 19 and 21 to the financial
statements.
Payments of payables
The Group's policy is to negotiate payment terms with its suppliers in all
sectors to ensure that they know the terms on which payment will take place
when the business is agreed and to abide by those terms of payment.
Going Concern
At 28 March 2022, the Group had cash of approximately £1.12 million, and a
loan due to Valkor of approximately £1.14 million ($1.5 million)
The Directors have prepared a cash flow forecast for the period to 30 June
2023. The forecast, which includes capital expenditure committed at the date
of this report, indicate that the Group needs to raise additional finance in
April 2023 in order to continue as a going concern. The cash flow forecast
assumes, amongst other things, the following:
· that either the Valkor loan of $1.5 million, which is due for
repayment by 30 May 2022, is extended by mutual agreement, which would lead to
an increase in financing costs, or is settled by the grant of a production
share over wells on land now occupied by the group under arrangements
concluded after the year-end;
· the payment which is due in respect of the TSHII option by 31
December 2022 of $16,250,000 requires sufficient additional funding to be
raised prior to December 2022 otherwise the option lapses. Should the option
lapse because 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 cash currently held by the Group is sufficient to fund ongoing overhead
costs for approximately 12 months, beyond which further funding will be
required.
The Group has a reasonable expectation that it can raise the required
additional funds based on a history of raising funds. However, there are
currently no binding agreements in place.
It is possible that rather than extend the term or grant a production share,
the Group would wish to refinance the Valkor loan by May 2022 and that
additional capital expenditure beyond that committed at the date of this
report will be necessary prior to April 2023 to maximise the opportunities
presented by, in particular, Greenfield. Any such refinance or additional
expenditure would be subject to funding, in whole or in part, via additional
debt or equity or a combination of both.
The Directors note that because of both the lingering effects of COVID-19 and
the war in Ukraine there remains considerable uncertainty concerning the
global economy and oil prices continue to be volatile, albeit reaching higher
levels of late, which may have implications in respect of securing additional
funding, either for the Group's day-to-day operations or additional capital
expenditure. These conditions represent a material uncertainty which may cast
significant doubt over the Group's ability to continue as a going concern.
Whilst acknowledging this material uncertainty, the Directors remain confident
of raising any additional funds required and therefore the Directors consider
it appropriate to prepare the financial statements on a going concern basis.
The financial statements do not include the adjustments that would result if
the Group was unable to continue as a going concern.
Going concern is also discussed at note 1.1 of the financial statements
Directors' responsibilities
The Directors are responsible for keeping proper accounting records that are
sufficient to show and explain the Group's transactions and disclose, with
reasonable accuracy at any time, the financial position of the Group and
enable them to ensure that financial statements may be prepared, in accordance
with the Isle of Man Companies Act 2006. They are also responsible for
safeguarding the assets of the Group and for taking steps for the prevention
and detection of fraud and other irregularities.
The Directors are required to prepare financial statements in accordance with
the rules of the London Stock Exchange for companies with securities trading
on the AIM market. In accordance with those rules, the Directors have elected
to prepare the Group's financial statements in accordance with International
Financial Reporting Standards (IFRSs), as issued by the International
Accounting Standards Board. The Directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of
the state of affairs of the Group and of the profit or loss of the Group for
that year. In preparing these financial statements, the Directors are
required to:
· consistently select and apply appropriate
accounting policies;
· present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and understandable
information;
· provide additional disclosures when compliance with the
specific requirements in IFRSs is insufficient to enable users to understand
the impact of particular transactions, other events and conditions on the
entity's financial position and financial performance; and
· state that the Group has complied with IFRS, subject to
any material departures disclosed and explained in the financial statements.
The Directors confirm that they have complied with these requirements, and,
having a reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future, have continued
to adopt the going concern basis in preparing the financial statements
Auditors
All the current Directors have taken all the steps that they ought to have
taken to make themselves aware of any information needed by the Company's
auditors for the purposes of their audit and to establish that the auditors
are aware of that information. The Directors are not aware of any relevant
audit information of which the auditors are unaware.
BDO LLP have expressed their willingness to continue in office and a
resolution to re-appoint them will be proposed at the annual general meeting.
By order of the Board
John Potter
CEO
31 March 2022
CORPORATE GOVERNANCE STATEMENT
As Chairman, I am pleased to present the Company's Governance Statement under
the QCA Corporate Governance Code (the "QCA Code"). Establishing effective
corporate governance structures that evolve with the business and protect
shareholder value is a key element of my role, together with the Board as a
whole. Set out below are details of the Company's governance framework
benchmarked against the QCA Code principles.
The Board of Directors of TomCo (the "Board") monitors the business affairs of
the Company and its subsidiaries on behalf of its shareholders. The Board
currently consists of the Chief Executive Officer and three Non-Executive
Directors. None of the Non-Executive Directors have previously held an
executive position with the Company. The Directors have responsibility for the
overall corporate governance of the Company and recognise the need for the
highest standards of behaviour and accountability. The Directors are committed
to the principles underlying best practice in corporate governance and have
adopted the QCA Code.
This statement explains, at a high level, how the QCA Code is applied by the
Company and how its application supports the Company's medium to long-term
success. Further information on the application of the QCA Code can be found
on the Company's website at https://tomcoenergy.com/investors/governance/.
The Board is responsible for the stewardship of the Company through
consultation with the management of the Company. Management represents the
Executive Director. Any responsibility that is not delegated to management or
to the committees of the Board remains with the Board, subject to the powers
of shareholder meetings. The frequency of Board meetings, as well as the
nature of agenda items, varies depending on the state of the Company's affairs
and in light of opportunities or risks which the Company faces. Members of the
Board are in frequent contact with one another, and meetings of the Board are
held as deemed necessary.
Statement of compliance with the QCA Code
Throughout the year ended 30 September 2021, the Company has been in
compliance with the provisions set out in the QCA Code.
Application of the QCA Code principles
The Company has applied the principles set out in the QCA Code, by complying
with it as reported above. Further explanations of how the principles have
been applied is set out below.
Principle One - Business Model and Strategy
TomCo is an oil exploration and development company focused on using
innovative technology to unlock unconventional hydrocarbon resources,
initially in Utah, USA.
The Company, as a result of the success of the opportunity developed within
Greenfield Energy LLC, has shifted its primary focus onto developing the oil
sand separation process with the planned potential future development of a
5,000 barrels of oil per day plant.
Principle Two - Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communications and having
constructive dialogue with its shareholders. Shareholders and analysts have
the opportunity to discuss issues and provide feedback at meetings with the
Company and management.
All shareholders are encouraged to attend and participate in all shareholder
meetings called by the Company, in particular its Annual General Meeting
(AGM). Investors also have access to current information on the Company and
the Group through its website at: www.tomcoenergy.com.
Principle Three - Considering wider stakeholder and social responsibilities
The Board recognises that the long-term success of the Group is reliant upon
the efforts of the employees of the Group, its partners, consultants,
contractors, suppliers, regulators and other stakeholders. The Board have put
in place a range of processes and systems to ensure that there is close
oversight and contact with its key stakeholders.
The Group is subject to oversight by a number of different U.S. State and
other regulatory bodies, who directly or indirectly are involved with the
permitting and approval process of its oil and gas operations in Utah,
including those conducted by Greenfield. Additionally, given the nature of the
Group's business, including the activities of Greenfield there are other
parties who, whilst not having regulatory power, nonetheless have an interest
in seeing that the Group conducts its operations in a safe, environmentally
responsible, ethical and conscientious manner.
The Group makes all reasonable efforts, directly or through its advisers, to
engage in and maintain active dialogue with each of these governmental and
non-governmental bodies, to ensure that any issues faced by the Group,
including but not limited to regulations or proposed changes to regulations,
are well understood and ensuring to the fullest extent possible that the Group
is in compliance with all appropriate regulations, standards and specific
licensing obligations, including environmental, social and safety aspects, at
all times.
Principle Four - Risk Management
In addition to its other roles and responsibilities, the Board is responsible
for ensuring that procedures are in place and are being implemented
effectively to identify, evaluate and manage the significant risks faced by
the Group.
As a result of the process described above, a number of risks have been
identified. The principal risks and the manner in which the Company and its
Board seek to mitigate them are set out below. The Board reviews the principal
risks facing the business as part of its meetings through the year and changes
to those risks as the Company develops. Where risks change or new risks are
identified the Board implements risk management strategies as applicable.
Risk Comment Mitigation
Operational risks See Directors' Report. The group's operations are limited currently, pending completion of the
detailed review of the potential site for the 5,000 barrels of oil per day
plant. The directors are in discussions with a number of potential funders
concerning securing funding for the potential plant.
As is common with projects of this nature the Company has mitigated the
potential risk around a new design by utilising existing technology and by
commissioning a detailed FEED study which has been successfully reviewed by a
reputable third party.
Environmental, health and safety and other regulatory standards See Directors' Report. The Company has engaged leading advisers to assist it in securing relevant
permits or licences to operate.
The Company maintains ongoing oversight of health and safety and environmental
compliance.
Liquidity risk See Directors' Report including 'Going Concern' section. The Company maintains a detailed cashflow forecast and carefully monitors
expenditure and may seek to raise additional funding as required and as
referred to in Note 1.1.
Currency risk See Directors' Report. The Company aims to manage currency exposures by holding funds in the
applicable currency to match anticipated expenditure.
The Board considers that an internal audit function is not necessary or
practical due to the size of the Group and the close day to day control
exercised by the Executive Director. However, the Board will continue to
monitor the need for an internal audit function. The Executive Director has
established appropriate reporting and control mechanisms to ensure the
effectiveness of the Group's control systems for the size of the business and
its activities. The Board obtains regular updates on risks from the Executive
Director, which allows it to monitor the effectiveness of risk management and
through its regular engagement and review of reporting on areas such as the
status of the Company's projects, budgets, results and cash flow position of
the Company it considers the effectiveness of controls on an ongoing basis.
Principle Five - A Well-Functioning Board of Directors
The Board currently comprises the Chief Executive, John Potter, and three
independent Non-Executive Directors, Malcolm Groat, Louis Castro and Zac
Phillips.
Biographies for each of the current Directors are set out on the Company's
website. Executive and Non-Executive Directors are subject to re-election
usually at the Company's Annual General Meeting, at intervals of no more than
three years.
The Board meets on a regular basis, typically at least once a month.
The Board is responsible for formulating, reviewing and approving the Group's
strategy, budgets and corporate actions. As such, the Company has established
separate Audit and Remuneration Committees.
The Audit Committee comprises Louis Castro (Chairman,), Malcolm Groat and Zac
Phillips. The Audit Committee meets at least twice a year to consider the
integrity of the financial statements of the Company, including its annual and
interim accounts; the effectiveness of the Company's internal controls and
risk management systems; auditor reports; and terms of appointment and
remuneration for the auditor.
The Company's Remuneration Committee comprises Louis Castro (Chairman,),
Malcolm Groat and Zac Phillips. The Remuneration Committee meets from time to
time, but not less than once a year, to review and determine, amongst other
matters, the remuneration of Executives on the Board and any share incentive
plans of the Company.
The QCA Code recommends that the Chairman must have adequate separation from
the day-to-day business to be able to make independent decisions. Malcolm
Groat is the Company's Non-Executive Chairman and the Board believe that he
has adequate separation from the day-to-day business of the Company to be able
to make independent decisions. As the Board is comprised of only four members,
one of whom is Executive and three of whom are independent Non-Executive
Directors, including the Chairman, the Board does not believe it is currently
necessary to appoint a senior independent director.
The Chief Executive is a full-time employee of the Company. Whilst each of the
Non-Executive Directors are considered to be part time, they are expected to
provide as much time to the Company as is required. The attendance record of
the Directors at Board and committee meetings held during the year ended 30
September 2021 was as follows:
Main Board Audit Remuneration
Committee Committee
Meetings held
Attendance:
Malcolm Groat 14 2 2
John Potter 14 - -
Richard Horsman (appointed 1 November 2020; resigned 24 January 2022) 14 2 1
Robert Kirchner (appointed 1 November 2020; resigned 4 June 2021) 4 1 1
Louis Castro (appointed 19 April 2021) 10 1 2
Principle Six - Appropriate Skills and Experience of the Directors
The Board believes that the current balance of skills held by the Board as a
whole, reflects a very broad range of commercial and professional skills
across geographies and industries and each of the Directors has previous
experience of public markets.
The Board believes that the Directors are well suited to the Company's
fundamental objective of enhancing and preserving long-term shareholder value
and ensuring that the Group conducts its business in an ethical and safe
manner. The Board is considered to be of a sufficient number to provide more
than adequate experience and perspective to its decision-making process and,
given the size and nature of the Group, the Board does not consider at this
time that it is appropriate to increase the size of the Board or amend its
composition.
As the Board is not currently anticipating any change to its size or
composition, it has not yet implemented a written policy regarding the
identification and nomination of female directors. In the event that one of
the existing members of the Board stands down from their current position, the
Company will, at that time, give further consideration to the specific
selection of a female member of the Board and the adoption of a formal policy
relating to the positive appointment of additional female members of the Board
for future opportunities.
The Board is responsible for: (a) ensuring that all new Directors receive a
comprehensive orientation, that they fully understand the role of the Board
and its committees, as well as the contribution individual directors are
expected to make (including the commitment of time and resources that the
Company expects from its directors) and that they understand the nature and
operation of the Group's business; and (b) providing continuing education
opportunities for all directors, so that individuals may maintain or enhance
their skills and abilities as directors, as well as to ensure that their
knowledge and understanding of the Group's business remains current.
Given the size of the Company and the in-depth experience of its Directors,
the Board has not deemed it necessary to develop a formal process of
orientation for new Directors but encourages all its Directors to visit the
Group's operations to ensure familiarity and proper understanding.
Skills & Experience of Board Members
Malcolm Groat
Malcolm is a Chartered Accountant and has a wide range of experience in
corporate life, with roles as Chairman, Non-Executive Director, Chairman of
Audit Committees, CEO, COO and CFO for a number of public companies. He is an
adviser on compliance and governance, strategy and operational improvement,
and managing the risks of rapid change.
John Potter
John is an accomplished Chief Executive and project manager with many years'
experience working within the energy sector. John brings a wide range of
skills, knowledge and industry connections. His proficiencies in understanding
and identifying best technologies in projects and his proven abilities in
developing relationships with stakeholders, including operators, politicians,
financiers, technology providers and regulators, are well proven and have
brought great value to the companies he has previously worked with.
Louis Castro
Louis is a graduate engineer and PwC Chartered Accountant who has spent his
career in the City in investment banking and capital markets, advising growth
companies on a wide range of matters including fund-raising and M&A. He
served as an AIM Nomad for many years before becoming CFO of a listed oil
company. In recent years, Louis has become Executive Chairman of Orosur Mining
Inc. which is quoted on both the TSXV and on AIM, and he is also a
non-executive director on Tekcapital plc; Predator Oil & Gas plc; and
Stanley Gibbons plc.
Zac Phillips
Zac has over 25 years' experience in oil and gas finance, having worked for
BP, Chevron, Merrill Lynch and ING Barings. He was previously CFO for Dubai
World's oil and gas business (DB Petroleum) with responsibility for risk
management and authoring of investment proposals. He has a degree in Chemical
Engineering and a PhD in Chemical Engineering from Bath University.
Principle Seven - Evaluation of Board Performance
The Board has determined that it shall be responsible for assessing the
effectiveness and contributions of the Board as a whole and its committees
(which currently comprise the Audit Committee and the Remuneration Committee).
The small size of the Board allows for open discussion. The Chairman has
regular dialogue with the Chief Executive whereby the Board's role and
effectiveness can be considered.
No formal assessments have been prepared in the year. However, the Board
assesses its effectiveness on an ongoing basis. The Board will keep this
matter under review and especially if either the size of the Board or the
number of committees increases, which in turn may require a more formalised
assessment and evaluation process to be established to ensure continued
effectiveness.
Principle Eight - Corporate Culture
The Board recognises that their decisions regarding strategy and risk will
impact the corporate culture of the Group as a whole and that this will impact
the performance of the Group. The Board is very aware that the tone and
culture set by the Board will greatly impact all aspects of the Group. The
corporate governance arrangements that the Board has adopted are designed to
ensure that the Group delivers long-term value to its shareholders and that
shareholders have the opportunity to express their views and expectations for
the Company in a manner that encourages open dialogue with the Board.
A large part of the Group's activities is centred upon what needs to be an
open and respectful dialogue with partners, suppliers, consultants and other
stakeholders. Therefore, the importance of sound ethical values and behaviour
is crucial to the ability of the Group to successfully achieve its corporate
objectives.
The Directors consider that, at present, the Group has an open culture
facilitating comprehensive dialogue and feedback and enabling positive and
constructive challenge.
Principle Nine - Maintenance of Governance Structures and Processes
Ultimate authority for all aspects of the Group's activities rests with the
Board, with the responsibilities of the Executive Director arising as a
consequence of delegation by the Board.
The Board has adopted appropriate delegations of authority which set out
matters which are reserved to the Board. The Chairman is responsible for the
effectiveness of the Board and compliance with the QCA Code, while management
of the Group's business and primary contact with shareholders has been
delegated by the Board to the Chief Executive Officer.
Non-Executive Directors
The Board evaluates its performance and composition on a regular basis and
will make adjustments as and when indicated. When assessing the independence
of each Non-Executive Director, length of service is one of the
considerations. The Board will, when assessing new appointments in the future,
consider the need to balance the experience and knowledge that each
independent director has of the Group and its operations, with the need to
ensure that independent directors can also bring new perspectives to the
business.
In accordance with the Isle of Man Companies Act 2006, the Board complies
with: a duty to act within their powers; a duty to promote the success of the
Company; a duty to exercise independent judgement; a duty to exercise
reasonable care, skill and diligence; a duty to avoid conflicts of interest; a
duty not to accept benefits from third parties and a duty to declare any
interest in a proposed transaction or arrangement.
Principle Ten - Shareholder Communication
The Board is accountable to the Company's shareholders and, as such, it is
important for the Board to appreciate the aspirations of the shareholders and
equally that the shareholders understand how the actions of the Board and
short-term financial performance relate to the achievement of the Group's
longer-term goals.
The Board reports to the Company's shareholders on its stewardship of the
Group through the publication of interim and final financial results. The
Company announces significant developments which are disseminated via various
outlets including, before anywhere else, RNS. In addition, the Company
maintains a website (www.tomcoenergy.com) on which RNS announcements, press
releases, corporate presentations and the Report and Financial Statements are
available to view.
Enquiries from individual shareholders on matters relating to the business of
the Group are welcomed. Shareholders and other interested parties can
subscribe to receive notification of news updates and other documents from the
Company via email.
The Annual General Meeting, and other meetings of shareholders that may be
called by the Company from time to time, provide an opportunity for
communication with all shareholders and the Board encourages shareholders to
attend and welcomes their participation. The Board is committed to maintaining
good communication and having constructive dialogue with its shareholders. The
Company has close ongoing relationships with its private shareholders.
Malcolm Groat
Non-Executive Chairman
31 March 2022
AUDIT COMMITTEE REPORT
Overview
The Committee met twice during the year to consider the full year 2020
accounts and interim 2021 accounts. It has also met after the year end to
consider the full year 2021 accounts.
In April 2021, Louis Castro was appointed Chairman of the Committee by the
Board. Following the departure of Robert Kirchner in June 2021, the other
Committee members during the year under review have been Malcolm Groat and
Richard Horsman. From February 2022, the Committee comprises Louis Castro, Zac
Phillips and Malcolm Groat.
Financial Reporting
The Committee monitored the integrity of the interim and annual financial
statements and reviewed the significant financial reporting issues and
accounting policies and disclosures in the financial reports. The external
auditor attended the Committee meeting as part of the full year accounts
approval process. The process included the consideration of reports from the
external auditor identifying the primary areas of accounting judgements and
key audit risks identified as being significant to the full year audited
accounts.
Audit Committee Effectiveness
The Board considers the effectiveness of the Committee on a regular basis but
not as part of a formal process.
External Audit
The Committee is responsible for managing the relationship with the Company's
external auditor, BDO LLP.
The objectivity and independence of the external auditor is safeguarded by
reviewing the auditor's formal declarations, monitoring relationships between
key audit staff and the Group and reviewing the non-audit fees payable to the
auditor. Non-audit services are not performed by the auditor. During the year,
audit fees of £34,337 (2020: £33,500) were paid to BDO LLP.
Internal Audit
The Committee considered the requirement for an internal audit function. The
Committee considered the size of the Group, its current activities and the
close involvement of senior management. Following the Committee's review, it
did not deem it necessary to operate an internal audit function during the
year.
Louis Castro
Chairman, Audit Committee
31 March 2022
REMUNERATION COMMITTEE REPORT
This report is on the activities of the remuneration committee for the
financial year ended 30 September 2021.
The Remuneration Committee meets from time to time, but not less than once a
year, to review and determine, amongst other matters, the remuneration of the
Executive(s) on the Board and any share incentive plans of the Company. At
the end of the year, the Remuneration Committee comprised Louis Castro
(Chairman), Richard Horsman and Malcolm Groat. From February 2022, the
Committee comprises Louis Castro, Zac Phillips and Malcolm Groat.
The Group has no employees other than the Directors; whose emoluments comprise
fees paid for services. The amounts for their services are detailed below:
Salaries Severance pay Salaries Severance pay
2021 2021 2020 2020
£'000 £'000 £'000 £'000
M Groat 38 - 20 -
J Potter 139 - 91 -
R Horsman (appointed 1 November 2020; resigned 24 January 2022) 30 - - -
R Kirchner (appointed 1 November 2020; resigned 4 June 2021) 15 30 - --
L Castro (appointed 19 April 2021) 19 - -
S West (resigned 30 September 2020) - 27 -
A Benger (resigned 30 September 2020) - 20 -
A Jones (resigned 16 March 2020) - 100 150
As detailed in Note 21, the Company has in place a share option scheme for its
Directors.
The Committee met twice during the year in conjunction with Board meetings to
review salaries and to issue share options as set out in Note 21.
Louis Castro
Chairman, Remuneration Committee
31 March 2022
Independent auditor's report to the members of TomCo Energy plc
Opinion on the financial statements
In our opinion the financial statements:
• give a true and fair view of the state of the Group's affairs as
at 30 September 2021 and of its loss for the year then ended; and
• have been properly prepared in accordance with IFRSs as issued by
the IASB.
•
We have audited the financial statements of TomCo Energy Plc (the 'Parent
Company') and its subsidiaries (the 'Group') for the year ended 30 September
2021 which comprise the consolidated statement of comprehensive income, the
consolidated statement of financial position, the consolidated statement of
changes in equity and the consolidated statements of cash flows and notes to
the financial statements, including a summary of significant accounting
policies.
The financial reporting framework that has been applied in the preparation of
the financial statements is applicable law and International Financial
Reporting Standards (IFRSs) as issued by the International Accounting
Standards Board (IASB).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in accordance with
the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC's Ethical Standard as applied to
listed entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Material uncertainty related to going concern
We draw attention to note 1.1 to the financial statements concerning the
Group's ability to continue as a going concern. As stated in note 1.1 the
Group has forecasted that it will need to repay or extend the existing debt by
May 2022 and raise additional finance by March 2023. In respect of this there
are currently no binding agreements in place.
As stated in note 1,1 these events or conditions, along with the other matters
set out in note 1.1 indicate that a material uncertainty exists that may cast
significant doubt on the Group's ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the Directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate.
Because of the judgements made by the Directors, and the significance of this
area, we have determined going concern to be a key audit matter. As described
in note 1.1 the Directors expect to be able to either repay or extend the
existing debt and raise additional financing. However, the ability of the
Group to achieve this is not fully within the Directors' control.
Our evaluation of the Directors' assessment of the Group's ability to continue
to adopt the going concern basis of accounting and in response to the key
audit matter included:
· Reviewing the latest cash flow forecasts for the group, which
covered the period to June 2023. Our work included assessing the forecast cash
outflows again historical data and publicly stated plans for the future
development of business.
· Testing the mathematical accuracy of the model.
· Verifying the receipt of the proceeds of the equity placing post
the year end.
· Sensitising the scenario by inflating the overheads.
· Challenging directors on their ability to raise further financing
with the references to the previous fund raises and considering the future
impact this could have on further fundraises.
· Reviewing the terms of the $1.5m loan agreement.
· Reviewing the disclosures in note 1.1 to ensure they provide
appropriate and sufficient information related to the going concern position
of the Group.
Our responsibilities and the responsibilities of the Directors with respect to
going concern are described in the relevant sections of this report.
Overview
Coverage All areas were subject to full scope audit
2021 2020
Carrying value of Intangible assets a a
Accounting treatment of the investment in Greenfield Energy LLC a a
Key audit matters Going Concern a a
Materiality Group financial statements as a whole
£78,000 (2020: £160,000) based on 1.5% (2020: 1.5%) of total assets
Materiality
Group financial statements as a whole
£78,000 (2020: £160,000) based on 1.5% (2020: 1.5%) of total assets
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its
environment, including the Group's system of internal control, and assessing
the risks of material misstatement in the financial statements. We also
addressed the risk of management override of internal controls, including
assessing whether there was evidence of bias by the Directors that may have
represented a risk of material misstatement.
Our group audit scope focused on the group's principle operating locations,
being the United Kingdom and USA. We determined there to be three significant
components, TomCo Energy Plc, Greenfield Energy LLC and Turboshale Inc.
There were no insignificant components.
The group audit team carried out a full scope audit on all entities and
performed all the work necessary to issue the group audit opinion including
undertaking all of the audit work on the key audit matters and other risk
areas.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit, and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter
described in the material uncertainty related to going concern section of our
report, we have determined the matters below to be the key audit matters to be
communicated in our report.
Key audit matter How the scope of our audit addressed the key audit matter
Carrying value of Intangible assets (note 9) and relevant notes within Group's The Group has recognised significant intangible assets, related to expenditure We reviewed Directors' assessment which concluded that the Greenfield project
accounting policies (note 1.9) and estimates and judgements (note 1.1) on researching and developing the design and operation of a pilot plant is in the development phase, and therefore the costs relating to the
acquired in the year and through the acquisition of the remaining 50% of development are capitalised within Greenfield, and in doing so our work
Greenfield Energy LLC. The Directors are required to assess these intangible included:
assets for indicators of impairment at each reporting date.
· Corroborating the basis for Directors' conclusions to supporting
The assessment of whether or not there are any indicators of impairment is evidence such as the FEED study which supported Directors' conclusion that the
described in the Group's accounting policies and includes making estimates and project is commercially viable.
judgments.
We have assessed Directors' review of whether there are any indicators of
The subjectivity of these estimates and judgements along with the material impairment and our procedures included the following:
carrying value of the assets and disclosure thereof in the financial
statements make this a key audit matter. · Making specific enquires of Directors, reviewing market
announcements and reviewing Board minutes to establish whether there was any
evidence that the Group did not plan to proceed with the future use of the
intangible assets.
· Reviewing the impairment assessment prepared by Directors and
making enquiries of Directors to understand the impact of current market on
the future of the project and challenging Directors on whether these factors
are indicators of impairment.
We also evaluated the adequacy of the disclosures provided within the
financial statements in relation to the impairment assessment against the
requirements of the accounting standards.
Key observations:
Based on the work performed we have no matters to communicate in respect of
Directors' assessment of the carrying value of the group's intangible assets
Accounting treatment of the investment in Greenfield Energy LLC (note 11) and The Group acquired the remaining 50% shareholding in Greenfield during the We have assessed Directors' judgements regarding the determination whether the
related estimates and judgements (note 1.1) year. As disclosed in this note this did not satisfy the criteria for a acquisition of remaining 50% of Greenfield represented an asset acquisition.
business combination under IFRS 3 and therefore was accounted as an asset
acquisition. Our audit procedures included reviewing the acquisition Agreement and
Directors' representations against the requirements of IFRS3 "Business
Combinations" and challenging Directors' on the key terms to determine whether
these are indicative of asset acquisition or a business combination.
The determination of whether or not this acquisition represents a business or
asset acquisition requires judgement.
We also evaluated the adequacy of Directors' estimation of the fair value of
the net assets acquired by auditing the assets and liabilities as at the
Further judgement is required on identification of assets purchased and the acquisition date.
valuation of the cost of the purchase.
We have assessed the appropriateness of using the equity method for valuation
The consideration for the acquisition is the issue of 592.8 million shares. of the existing 50% holding in Greenfield prior to acquisition made in the
The issue of the shares is contingent upon the Company receiving funds from, year.
or drawing down on, a loan or credit facility granted for construction of an
oil sands processing facility by August 2024.
We have reviewed Directors' methodology of estimation of the contingent
consideration and challenged the Directors on the appropriateness of valuation
The judgments involved in making these assessments and the disclosures within of the consideration based on historic cost of assets or probability of the
the financial statements made this a key audit matter. contingent shares to be issued.
We also evaluated the adequacy of the disclosures provided within the
financial statements in relation to the transaction against the requirements
of the accounting standards.
Key observations:
Based on the work performed we have no matters to communicate in respect of
Director's assessment of investment or the share of the loss recognised in the
group financial statements.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit,
and in evaluating the effect of misstatements. We consider materiality to be
the magnitude by which misstatements, including omissions, could influence the
economic decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability that any
misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified
misstatements, and the particular circumstances of their occurrence, when
evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the
financial statements as a whole and performance materiality as follows:
Group financial statements
2021 2020
£m £m
Materiality £78,000 £160,000
Basis for determining materiality 1.5% of total assets 1.5% of total assets
Rationale for the benchmark applied We considered total assets to be the most significant determinant of the
Group's financial performance by users of the financial statements.
Performance materiality £54,000 £120,000
Basis for determining performance materiality 70% of the above materiality level given the slightly increased volume of 75% of the above materiality level
errors in prior year audit
given the historical low volume of errors
Component materiality
We set materiality for each component of the Group based on a percentage of
between 50% and 95% of Group materiality dependent on the size and our
assessment of the risk of material misstatement of that component. Component
materiality ranged from £39,000 to £74,000 (2020: £80,000 to £144,000). In
the audit of each component, we further applied performance materiality levels
of 70% of the component materiality to our testing to ensure that the risk of
errors exceeding component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual
audit differences in excess of £1,500 (2020: £3,200). We also agreed to
report differences below this threshold that, in our view, warranted reporting
on qualitative grounds.
Other information
The directors are responsible for the other information. The other information
comprises the information included in the annual report and financial
statements other than the financial statements and our auditor's report
thereon. Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Responsibilities of Directors
As explained more fully in the Directors' responsibilities, the Directors are
responsible for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such internal control
as the Directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the Directors are responsible for
assessing the Group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the Directors either intend to liquidate the Group or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including
fraud
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
Based on our understanding of the Group and industry, we considered those laws
and regulations that have a direct impact on the preparation of the financial
statements such as Companies Act 2006 and income tax. The Group are also
subject to many other laws and regulations where the consequences of
non-compliance could have a material effect on amounts or disclosures in the
financial statements, for instance through the imposition of fines or
litigation. We identified the following areas as those most likely to have
such an effect: anti-bribery, employment law and certain aspects of relevant
applicable legislation.
We evaluated management's incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override of
controls), and determined that the principal risks were related to posting
inappropriate journal entries to revenue, management bias in accounting
estimates and the adoption of inappropriate accounting policies.
Audit procedures performed by the Group engagement team included:
o inspecting correspondence with regulators, tax authorities and lawyers;
o discussions with management including consideration of known or suspected
instances of non-compliance with laws and regulation and fraud;
o Communicating risks of fraud and non-compliance with the engagement team
o inspecting legal and professional fees for indications of non-compliance
with laws and regulations;
o considering management's controls designed to prevent and detect
irregularities;
o identifying and testing journals, in particular journal entries posted
with unusual account combinations, postings by unusual users or with unusual
descriptions; and
o challenging assumptions and judgements made by management in their
critical accounting estimates as mentioned in Key audit matters.
Our audit procedures were designed to respond to risks of material
misstatement in the financial statements, recognising that the risk of not
detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery, misrepresentations or through collusion.
There are inherent limitations in the audit procedures performed and the
further removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less likely we are
to become aware of it.
A further description of our responsibilities is available on the Financial
Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities
(http://insite.bdo.co.uk/sites/audit/Documents/www.frc.org.uk/auditorsresponsibilities)
. This description forms part of our auditor's report.
Use of our report
This report is made solely to the Parent Company's Members, as a body, in
accordance with our engagement letter dated 31 March 2022. Our audit work has
been undertaken so that we might state to the Parent Company's Members those
matters we are required to state to them in an auditor's report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Parent Company and the Parent
Company's Members as a body, for our audit work, for this report, or for the
opinions we have formed.
BDO LLP
Chartered Accountants
London, UK
31 March 2022
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
Consolidated Statement of Comprehensive Income
for the financial year ended 30 September 2021
2021 2020
Note £'000 £'000 £'000 £'000
Revenue 2 - -
Cost of sales 2 - -
Gross loss - -
Administrative expenses 2 (1,528) (1,031)
Impairment losses 3 (8,679) -
Operating loss 5 (10,207) (1,031)
Finance income/(costs) 4 - 1
Share of loss of joint venture 11 (84) (40)
Loss on ordinary activities before taxation (10,291) (1,070)
Taxation 6 - -
Loss for the year attributable to: (10,291) (1,070)
Equity shareholders of the parent (10,017) (1,028)
Non-controlling interests 20 (274) (42)
(10,291) (1,070)
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations (503) (350)
Other comprehensive income for the year attributable to:
Equity shareholders of the parent (507) (356)
Non-controlling interests 20 4 6
Other comprehensive income (503) (350)
Total comprehensive loss attributable to:
Equity shareholders of the parent (10,524) (1,384)
Non-controlling interests 20 (270) (36)
Total comprehensive loss (10,794) (1,420)
2021 2020
Pence Pence
Loss per share attributable to the equity shareholders of the parent per share per share
Basic & diluted loss per share 8 (0.76) (0.30)
The Notes form part of these financial statements.
Consolidated Statement of Financial Position
as at 30 September 2021
Group Group
2021 2020
Note £'000 £'000
Assets
Non-current assets
Intangible assets 9 3,947 8,834
Property, plant and equipment 10 - 411
Investment in joint venture 11 - 1,224
Other receivables 12 25 26
3,972 10,495
Current assets
Trade and other receivables 12 104 118
Other financial assets 13 371 -
Cash and cash equivalents 14 726 334
1,201 452
TOTAL ASSETS 5,173 10,947
Liabilities
Current liabilities
Trade and other payables 15 (808) (215)
(808) (215)
Net current assets 393 237
TOTAL LIABILITIES (808) (215)
Total net assets 4,365 10,732
Shareholders' equity
Share capital 17 - -
Share premium 18 31,142 29,222
Warrant reserve 19 2,579 1,288
Translation reserve (225) 282
Retained deficit (28,688) (19,887)
Equity attributable to owners of the parent 4,808 10,905
Non-controlling interests 20 (443) (173)
Total equity 4,365 10,732
The financial statements were approved and authorised for issue by the Board
of Directors on 31 March 2022.
The Notes form part of these financial statements.
John Potter Malcolm Groat
Director
Director
Consolidated Statement of Changes in Equity
for the financial year ended 30 September 2021
Group
Equity attributable to equity holders of the parent Total Equity
Non-controlling interest
Note Share capital Share premium Warrant reserve Translation reserve Retained Deficit Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 October 2019 - 28,247 65 638 (19,012) 9,938 (137) 9,801
Loss for the year - - - - (1,028) (1,028) (42) (1,070)
Comprehensive income for the year - - - (356) - (356) 6 (350)
Total comprehensive loss for the year - - - (356) (1,028) (1,384) (36) (1,420)
Issue of shares (net of costs) 17, 18 - 866 1,377 - - 2,243 - 2,243
Exercise of warrants 19 - 109 (114) - 114 109 - 109
Expiry of warrants 19 - - (43) - 43 - - -
Share-based payment charge 21 - - 3 - (4) (1) - (1)
At 30 September 2020 - 29,222 1,288 282 (19,887) 10,905 (173) 10,732
Loss for the year - - - - (10,017) (10,017) (274) (10,291)
Comprehensive income for the year - - - (507) - (507) 4 (503)
Total comprehensive loss for the year - - - (225) (10,017) (10,524) (270) (10,794)
Issue of shares (net of costs) 17,18 - 1,920 1,306 - - 3,226 - 3,226
Expiry of warrants 19 - - (15) - 15 - - -
Share-based payment arrangements 21 - - - - 1,201 1,201 - 1,201
At 30 September 2021 - 31,142 2,579 (225) (28,688) 4,808 (443) 4,365
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 Group.
Translation reserve Gains and losses on the
translation of foreign operations.
Retained deficit Cumulative net gains and
losses recognised in the consolidated statement of comprehensive income less
transfers to retained deficit on expiry.
Non-controlling interest Non-controlling interest share of losses of
TurboShale Inc., together with adjustments associated with the initial
recognition of, and changes in, the non-controlling interest. Refer to Note
20.
The Notes form part of these financial statements.
Consolidated Statement of Cash Flows
for the financial year ended 30 September 2021
Note Group Group
2021 2020
£'000 £'000
Cash flows from operating activities
Loss after tax 2 (10,291) (1,070)
Adjustments for:
Finance costs 4 - (1)
Amortisation 6 6
Impairment losses 8,679 -
Share based payment charge/(credit) 135 (1)
Unrealised foreign exchange losses 67 81
Share of loss of joint venture 84 40
Decrease/(Increase) in trade and other receivables 22 (21)
Increase/(decrease) in trade and other payables 63 (384)
Cash used in operations (1,235) (1,350)
Interest received/(paid) - 1
Net cash outflow from operating activities (1,235) (1,349)
Cash flows from investing activities
Investment in intangibles 9 (2) (29)
Purchase of financial assets 11 (219) -
Investment in joint venture (1,502) (1,279)
Cash acquired on acquisition of control of joint venture 11 124 -
Net cash used in investing activities (1,599) (1,308)
Cash flows from financing activities
Issue of equity instruments 17,18 3,500 2,535
Costs of share issue (274) (182)
Net cash generated from financing activities 3,226 2,353
Net increase/(decrease) in cash and cash equivalents 392 (304)
Cash and cash equivalents at beginning of financial year 334 639
Foreign currency translation differences - (1)
Cash and cash equivalents at end of financial year 726 334
The Notes form part of these financial statements.
Notes to the financial statements
for the financial year ended 30 September 2021
1. Accounting policies
The principal accounting policies adopted in the preparation of these
financial statements are set out below. These policies have been consistently
applied to all years presented, unless otherwise stated.
1.1 Basis of preparation and going concern
The Group's financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board and International Financial Reporting
Interpretations Committee ("IFRIC") interpretations and with those parts of
the Isle of Man Companies Act 2006 applicable to companies reporting under
IFRS. The financial statements have been prepared under the historic cost
convention.
The preparation of financial statements in conformity with IFRS requires the
use of estimates and assumptions. Although these estimates are based on
management's best knowledge of the amount, event or actions, actual results
ultimately may differ from those estimates. Details of the Group's significant
accounting judgments are set out in these financial statements and include:
Judgements
- Purchase of remaining interest in Greenfield Energy LLC
("Greenfield")
On acquisition of the remaining 50% of Greenfield not already owned by the
Group, the Directors were required to assess whether the acquisition was of a
business, as defined by IFRS 3, or a group of assets. They determined that, as
Greenfield had, at the date of acquisition, neither outputs, namely goods or
services to customers, nor an organised workforce, or access to such a
workforce, the IFRS 3 definition of a business combination was not met.
Therefore, the Directors concluded that the acquisition represented an asset
purchase to be accounted for at cost.
Further judgement was then required concerning:
i. the identification of assets purchased; and
ii. measurement of accumulated cost of the purchase,
including the accumulated cost of the Group's initial holding in Greenfield up
to the date of acquisition of the remaining 50% interest; and the cost of the
remaining 50%, which is principally determined by reference to the directors'
estimate of the probability of those events occurring that would trigger the
issue of equity consideration under the agreement to purchase the remaining
interest.
- Impairment indicator assessment on intangible assets and property,
plant and equipment used in exploration and evaluation activities
The Directors consider that impairment indicators existed at 30 September 2021
concerning its tangible and intangible assets employed in exploration and
evaluation activities in relation to oil shale. Having carried out a
subsequent impairment review the directors have decided to impair these assets
in full at 30 September 2021.
- Internally generated development assets
Greenfield has incurred expenditure on researching and developing the design
and operation of a pilot plant and processes that is not of a scale
economically feasible for commercial production. Judgement is required In
determining what constitutes research expenditure, to be expensed in profit
and loss, and what constitutes development expenditure that meets the criteria
set out in IAS 38, which must be capitalised. Qualifying expenditure is
capitalised from the point at which Greenfield's board are satisfied as to the
technical feasibility of the production processes. The board have deemed that
this was achieved when the preliminary results of the Pre-Feed study were
released, which indicated the use of the Oil Sands Technology was likely to be
economically viable. Judgements on these matters affect the Group's share of
Greenfield's net assets and profits that are recognised under the equity
method up to the point that the remaining 50% of Greenfield was acquired and
the cost of intangible assets thereafter.
- Joint arrangements
Prior to the acquisition of the remaining 50% of Greenfield, judgement was
required In assessing whether the Group was party to a joint arrangement under
IFRS 11. The Group considered whether decisions about relevant activities of
the investee entity required the unanimous consent of the investors ("joint
control"). Having established the existence of joint control, judgement was
required to establish whether the structure of the arrangement, the
contractual terms or other facts and circumstances give the parties to the
arrangement rights to the assets and obligations for the liabilities of the
investee entity. In those circumstances, the entity is a joint operation.
Having evaluated the matter, the Group determined that the parties to the
arrangement did not have rights to the assets and obligations of the investee
entity and therefore the joint arrangement was a joint venture prior to the
acquisition of control of Greenfield.
Estimates
- Share based payments
Estimates were required in determining the fair value of share options and
warrants granted in the year including future share price volatility and the
instrument life. Volatility is estimated using TomCo's historic share prices
for a period of time that matches the exercise period of the warrant or
option. This assumes that historic share price volatility is the best estimate
of future volatility. The Black-Scholes model is used for valuing both options
and warrants. Estimates are also made of the likely time of exercise of the
options or warrants.
In measuring the value of equity consideration for the purchase of the
remaining 50% of Greenfield, the Directors have applied IFRS 2. Where goods or
services are provided by persons other than employees, the value of the
share-based payment is determined by reference to the fair value of the assets
acquired. Because of the unique nature of the principal asset acquired, namely
the pilot plant processes developed by Greenfield, the directors have
determined that cost is the best estimate of fair value at acquisition.
The Group has consistently applied all applicable accounting standards.
Going concern
At 28 March 2022, the Group had cash of approximately £1.12 million, and a
loan due to Valkor of approximately £1.14 million ($1.5 million).
The Directors have prepared a cash flow forecast for the period to 30 June
2023. The forecast, which includes capital expenditure committed at the date
of this report, indicates that the Group needs to raise additional finance in
order to continue as a going concern. The cash flow forecast assumes, amongst
other things, the following:
• that either the Valkor loan of $1.5 million, which is due for repayment by
30 May 2022, is extended by mutual agreement, which would lead to an increase
in financing costs, or is settled by the grant of a production share over
wells on land now occupied by the group under arrangements concluded after the
year-end.
• the payment which is due in respect of the TSHII option by 31 December
2022 of $16,250,000 requires sufficient additional funding to be raised prior
to December 2022 otherwise the option lapses. Should the option lapse because
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 cash currently held by the Group is sufficient to fund ongoing overhead
costs for approximately 12 months, beyond which further funding will be
required.
The Group has a reasonable expectation that it can raise the required
additional funds based on a history of raising funds. However, there are
currently no binding agreements in place.
It is possible that rather than extend the term or grant a production share,
the Group would wish to refinance the Valkor loan by May 2022 and that
additional capital expenditure beyond that committed at the date of this
report will be necessary prior to April 2023 to maximise the opportunities
presented by, in particular, Greenfield. Any such refinance or additional
expenditure would be subject to funding, in whole or in part, via additional
debt or equity or a combination of both.
The Directors note that because of both the lingering effects of COVID-19 and
the war in Ukraine there remains considerable uncertainty concerning the
global economy and oil prices continue to be volatile, albeit reaching higher
levels of late, which may have implications in respect of additional funding,
either for the Group's day-to-day operations or additional capital
expenditure. These conditions represent a material uncertainty which may cast
significant doubt over the Group's ability to continue as a going concern.
Whilst acknowledging this material uncertainty, the Directors remain confident
of raising any additional funds required and therefore the Directors consider
it appropriate to prepare the financial statements on a going concern basis.
The financial statements do not include the adjustments that would result if
the Group was unable to continue as a going concern.
1.2 Future changes in accounting standards
The IFRS financial information has been drawn up on the basis of accounting
standards, interpretations and amendments effective at the beginning of the
accounting period.
There are currently no new or revised standards, amendments and
interpretations to existing standards that are not effective for the financial
year ended 30 September 2021 and have not been adopted early, which, when
effective, might have an impact upon the Group's financial statements.
1.3 Basis of consolidation
The Group accounts consolidate the accounts of the parent company, TomCo
Energy plc, and all of its subsidiary undertakings drawn up to 30 September
2021. All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
The acquisition of subsidiaries where the acquisition represents the purchase
of a business is accounted for on the purchase basis. A subsidiary is
consolidated where the Company has control over an investee. The Group
controls an investee if all three of the following elements are present: power
over the investee, exposure to variable returns from the investee, and the
ability of the investor to use its power to affect those variable returns.
Control is reassessed whenever facts and circumstances indicate that there may
be a change in any of these elements of control. On acquisition, all of the
subsidiary's assets and liabilities which existed at the date of acquisition
are recorded at their fair values reflecting their condition at the time. If,
after re-assessment, the Group's interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities exceeds the cost
of the business combination, the excess is recognised immediately in the
statement of comprehensive income.
Acquisitions of subsidiaries where the IFRS 3 definition of a business
combination are not met are accounted for as the purchase of relevant assets
less liabilities at cost. Where the acquisition is a stepped acquisition, cost
represents the accumulated cost, under the equity method, of the Group's
initial interest in the subsidiary plus cost of equity consideration measured
in accordance with IFRS 2. Identifiable assets acquired are stated at their
respective relative fair values.
Entities over which the Group had joint control were classified as joint
ventures and were accounted for using the equity method of accounting. On
initial recognition the investment in the joint venture was recognised at
cost. The carrying amount was increased or decreased to recognise the Group's
share of the profit or loss of the joint venture after the date of
acquisition. During the year, the Group acquired control of the remaining
unowned interest in it's joint venture. The accumulated cost on the equity
basis to the date of acquisition forms part of the total acquisition cost
referred to in the preceding paragraph.
1.4 Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision maker has been identified as the Board of Directors.
Based on an analysis of risks and returns, the Directors consider that the
Group has two principal business segments based on geographical location. The
loss before taxation arises principally within the UK and US. Net assets are
principally in the UK and the US.
1.5 Revenue
Revenue represents the Group's share of sales of oil during the year,
excluding sales tax and royalties. Income arises from the US and is recognised
when the oil is delivered to the customer. No revenue has arisen in the
current or prior year.
1.6 Finance income
Finance income is accounted for on an effective interest basis.
1.7 Property, plant and equipment
Property, plant and equipment employed in exploration and evaluation
activities are carried at cost. Following a review of the Group's activities,
these assets have been impaired in full as at 30 September 2021.
1.8 Intangible assets
Exploration and development licences
The Group applies the full cost method of accounting for oil and gas
operations. For evaluation properties, all mineral leases, permits,
acquisition costs, geological and geophysical costs and other direct costs of
exploration appraisal, renewals and development are capitalised as intangible
fixed assets in appropriate cost pools, with the exception of tangible assets,
which are classed as property, plant and equipment. Costs relating to
unevaluated properties are held outside the relevant cost pool and are not
amortised until such time as the related property has been fully appraised.
When a cost pool reaches an evaluated and bankable feasibility stage, the
assets are transferred from intangible to oil properties within property,
plant and equipment.
Development assets
Greenfield has incurred expenditure on researching and developing the design
and operation of a pilot plant and processes for oil sands extraction that is
not of a scale economically feasible for commercial production. Development
expenditure at acquisition is measured at cost. Development expenditure
incurred following the acquisition of Greenfield that meets the requirements
of IAS 38 for recognition as intangible assets are capitalised. All other
expenditure is expensed. No amortisation is charged on such assets until
commercial exploitation of the processes commences.
Technology licences
Amortisation is not charged on technology licences associated with oil and gas
assets until they are available for use.
Patents and patent applications
Patents and patent applications acquired in consideration for a combination of
cash and the issue of shares in subsidiary undertakings are recognised at fair
value, and amortised over their expected useful lives, which is 12 years being
the patent term.
1.9 Impairment
Exploration and development licences
Exploration and development assets are assessed for impairment when facts and
circumstances suggest that the carrying amount may exceed the recoverable
amount. In accordance with IFRS 6 the Group firstly considers the following
facts and circumstances in their assessment of whether the Group's exploration
and evaluation assets may be impaired, namely whether:
§ the period for which the Group has the right to explore in a specific
area has expired during the period or will expire in the near future, and is
not expected to be renewed;
§ substantive expenditure on further exploration for and evaluation of
mineral resources in a specific area is neither budgeted nor planned;
§ exploration for and evaluation of hydrocarbons in a specific area have not
led to the discovery of commercially viable quantities of hydrocarbons and the
Group has decided to discontinue such activities in the specific area; and
§ sufficient data exists to indicate that although a development in a
specific area is likely to proceed, the carrying amount of the exploration and
evaluation assets is unlikely to be recovered in full, either from successful
development or by sale.
The Directors have concluded that the above facts and circumstances applied in
respect of its oil shale exploration and evaluation activities, because at
present there is no programme in place or committed budget to continue
exploration in this area. Having conducted a review, they have therefore
determined to impair tangible and intangible assets employed in those
activities in full. Impairment losses are recognised in the income statement
and separately disclosed.
Research and development activities
The directors do not consider any impairment indicators exist with regard to
the Group's research and development activities with regard to oil sands
extraction. If any such facts or circumstances were noted, the Group would
perform an impairment test in accordance with the provisions of IAS 36.
Technology licences
The carrying amount of the Group's other intangible asset, its patents and
technology licences, is reviewed at each reporting date to determine whether
there is any indication of impairment. If such indication exists, the asset's
recoverable amount is estimated. An impairment loss is recognised whenever the
carrying amount of an asset exceeds its recoverable amount. Impairment losses
are recognised in the income statement.
1.10 Taxation
Taxation expense represents the sum of current tax and deferred tax.
Current tax is based on taxable profits for the financial period using tax
rates that have been enacted or substantively enacted by the reporting date.
Taxable profit differs from net profit as reported in the statement of
comprehensive income because it excludes items of income or expenses that are
taxable or deductible in other years and it further excludes items that are
never taxable or deductible.
Deferred tax is provided in full, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes. If deferred tax arises from
initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither
accounting nor taxable profit nor loss, it is not accounted for. Deferred tax
is determined using tax rates that have been enacted or substantively enacted
at the reporting date and that are expected to apply when the related deferred
income tax asset is realised, or the deferred tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that
future taxable profit will be available against which the temporary
differences can be utilised.
Deferred tax is provided on temporary differences arising on investments in
subsidiaries, except where the timing of the reversals of the temporary
differences is controlled by the Group and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred tax is charged or credited in the statement of comprehensive income,
except when it relates to items charged or credited directly to equity, in
which case the deferred tax is also dealt with in equity.
1.11 Foreign currencies
The accounts have been prepared in pounds sterling being the presentational
currency of the Group. The functional currency of the holding company is also
pounds sterling. The functional currency of the US subsidiaries is US dollars.
Assets and liabilities held in the Group or overseas subsidiaries in
currencies other than the functional currency are translated into the
functional currency at the rate of exchange ruling at the reporting date.
Transactions entered into by Group entities in a currency other than the
functional currency of the entity are recorded at the rates ruling when the
transactions occur. Exchange differences arising from the settlement of
monetary items are included in the statement of comprehensive income for that
period.
The assets and liabilities of subsidiaries and joint ventures with functional
currencies other than sterling are translated at balance sheet date rates of
exchange. Income and expense items are translated at the average rates of
exchange for the period. Exchange differences arising are recognised in other
comprehensive income (attributed to the parent equity holder and
non-controlling interests as appropriate).
1.12 Leases
The Group is party as lessee only to low value or short-term leases. Rentals
payable under such leases, net of lease incentives, are charged to the
statement of comprehensive income on a straight-line basis over the period of
the lease.
1.13 Debt instruments at amortised cost
These assets are non-derivative financial assets which are held in a business
model whose objective is to collect contractual cashflows and whose
contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal outstanding. They arise
principally through types of contractual monetary asset such as receivables.
They are initially recognised at fair value plus transaction costs that are
directly attributable to their acquisition or issue and are subsequently
carried at amortised cost using the effective interest rate method, less
provision for impairment. Impairment provisions are recognised based on
expected credit losses over the asset's life.
The Group's assets held at amortised cost comprise trade and other receivables
and cash and cash equivalents in the consolidated statement of financial
position.
1.14 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at the bank and
other short-term liquid investments with original maturities of three months
or less.
1.15 Trade payables
Trade payables are recognised at amortised cost. All of the trade payables are
non-interest bearing.
1.16 Share capital
Ordinary shares are classified as equity. Shares issued in the period are
recognised at the fair value of the consideration received.
1.17 Warrants
Warrants issued as part of financing transactions in which the holder receives
a fixed number of shares on exercise of the warrant are fair valued at the
date of grant and recorded within the warrant reserve. Fair value is measured
by the use of the Black-Scholes model.
On expiry or exercise, the fair value of warrants is credited to reserves as a
change in equity.
1.18 Non-controlling interests
Non-controlling interests in subsidiaries are identified separately from the
Group's equity therein. Those interests of non-controlling shareholders that
are present ownership interests entitling their holders to a proportionate
share of net assets upon liquidation may initially be measured at fair value
or at the non-controlling interests' proportionate share of the fair value of
the acquiree's identifiable net assets. The choice of measurement is made on
an acquisition-by-acquisition basis. Other non-controlling interests are
initially measured at fair value. Subsequent to acquisition, the carrying
amount of non-controlling interests is the amount of those interests at
initial recognition plus the non-controlling interests' share of subsequent
changes in equity. Total comprehensive income is attributed to non-controlling
interests even if this results in the non-controlling interests having a
deficit balance.
Changes in the Group's interests in subsidiaries that do not result in a loss
of control are accounted for as equity transactions. The carrying amount of
the Group's interests and the non-controlling interests are adjusted to
reflect the changes in their relative interests in the subsidiaries. Any
difference between the amount by which the non-controlling interests are
adjusted and the fair value of the consideration paid or received is
recognised directly in equity and attributed to the owners of the Group.
Details concerning non-wholly owned subsidiaries of the Group that have
material non-controlling interests are set out in note 18.
1.19 Share-based payments
Equity-settled share-based payments to directors are measured at the fair
value of the equity instruments at the grant date. Details regarding the
determination of the fair value of equity-settled share-based transactions is
set out in Note 18.
The fair value determined at the grant date is expensed on a straight-line
basis over the vesting period or periods, based on the Group's estimate of
equity instruments that will eventually vest. At each balance sheet date, the
Group revises its estimate of the number of equity instruments expected to
vest. The impact of the revision of the original estimates, if any, is
recognised in profit or loss such that the cumulative expenses reflects the
revised estimate, with a corresponding adjustment to equity reserves.
In respect of equity-settled arrangements within the scope of IFRS 2
representing contingent consideration for the acquisition of assets, the value
of the equity instruments is presumed to be equivalent to the fair value of
the assets acquired. In the case of assets acquired on the acquisition of
Greenfield, cost is deemed to be the best estimate of fair value.
2. Segmental reporting - Analysis by geographical segment
The loss before taxation arises within principally the UK and US. Net assets
are principally in the UK and US. Based on an analysis of risks and returns,
the Directors consider that the Group has two principal business segments
based on geography, with the UK primarily representing head office costs of
the Group. Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker. The chief
operating decision maker has been identified as the Board of Directors. The
Directors therefore consider that no further segmentation is appropriate.
United States United Kingdom Eliminations Total United States United Kingdom Eliminations Total
Year ended 30 September 2021 2021 2021 2021 2020 2020 2020 2020
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
External revenue - - - - - -
Inter-segment sales 88 (88) - 94 (94) -
Cost of sales - - - - - - - -
Gross profit/(loss) - 88 (88) - - 94 (94) -
Impairment (8,679) - - (8,679) - - -
Administrative expenses (414) (1,202) 88 (1,528) (241) (884) 94 (1,031)
Operating loss (9,093) (1,114) - (10,207) (241) (790) - (1,031)
Financial income - - - - - 1 - 1
Share of loss of joint venture (84) - - (84) (40) - - (40)
Loss before taxation (9,177) (1,114) - (10,291) (281) (789) - (1,070)
Non-Current assets:
- Exploration and development assets 3,947 - - 3,947 8,819 - - 8,819
- Other 25 - - 25 26 - - 26
- Property, plant and equipment - - - - 411 - - 411
- Patents - - - - 15 - - 15
- Investments in joint venture - - - - 1,224 - - 1,224
3,972 - - 3,972 10,495 - - 10,495
Current assets:
Trade and other receivables - 104 - 104 - 398 (280) 118
Other financial assets 371 - - 371
Cash and cash equivalents 15 711 - 726 4 330 334
Total assets 4,358 815 - 5,173 10,499 728 (280) 10,947
Current liabilities:
Trade and other payables (498) (310) - (808) (309) (186) 280 (215)
Total liabilities (498) (310) - (808) (309) (186) 280 (215)
3. Impairment losses
Impairment losses recognised during the year were as follows:
2021 2020
£'000 £'000
Oil shale exploration property, plant and equipment 386 -
Oil shale exploration intangible assets 8,293
Total impairment losses for the financial year 8,679 -
The impairments arose as a result of the reassessment by the Directors of the Group's future strategy and intentions for the commitment of future resources towards oil shale exploration and extraction activities and the absence of a committed budget or programme for such work.
4. Finance costs
2021 2020
£'000 £'000
Interest income - (1)
Total finance costs for the financial year - (1)
5. Operating loss
The following items have been charged in arriving at operating loss: 2021 2020
£'000 £'000
Auditors' remuneration: audit services 43 33
Rentals payable in respect of land and buildings 10 52
6. Taxation
There is no tax charge in the year due to the loss for the year.
Factors affecting the tax charge: 2021 2020
£'000 £'000
Loss on ordinary activities before tax (10,291) (1,070)
Loss on ordinary activities at standard rate of corporation tax (1,955) (203)
in the UK of 19% (2020: 19%)
Effects of:
Group share of joint venture losses 16 7
Losses carried forward 1,939 196
Tax charge for the financial year - -
7. Employees and Directors
The Group has one employee (2020-none) other than the Directors, whose
emoluments comprise fees paid for services. The amounts for their services are
detailed below:
Share-based payment expense
Share-based payment expense
Salaries Severance pay Salaries Severance pay
2021 2021 2021 2020 2020 2020
£'000 £'000 £'000 £'000 £'000 £'000
J Potter 139 - 74 91 - 20
M Groat 38 - 28 20 - 5
R Horsman (appointed 1 November 2020; resigned 24 January 2022) 30 - 10 - - --
L Castro (appointed 19 April 2021) 19 - 20 -- -
R Kirchner (appointed 1 November 2020; resigned 4 June 2021) 15 30 - - -
S West - - - 27 - 4
A Benger - - - 20 - 5
A Jones - - - 100 150 (35)
Total remuneration 241 30 132 258 150 (1)
Unvested share options granted to Mr Jones were outstanding on his
resignation, and this has resulted in a credit to profit and loss in 2020 in
respect of charges for share-based payment previously recognised in respect of
those options that have been forfeited.
8. 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
Financial year ended 30 September 2021 £'000 Pence
Basic and Diluted EPS
Losses attributable to ordinary shareholders on continuing operations (10,017) 1,323,206,884 (0.76)
Total losses attributable to ordinary shareholders (10,017) 1,323,206,884 (0.76)
Financial year ended 30 September 2020
Basic and Diluted EPS
Losses attributable to ordinary shareholders on continuing operations (1,028) 339,346,801 (0.30)
Total losses attributable to ordinary shareholders (1,028) 339,346,801 (0.30)
The warrants and share options which were issued or for which entitlement to
warrants was established in the current and prior years (Notes 17 and 18) are
anti-dilutive. As these instruments would be anti-dilutive a separate diluted
loss per share is not presented.
9. Intangible assets
Oil & Gas Oil & Gas Oil & Gas Oil & Gas
Exploration and evaluation expenditure Development expenditure Patents and patent applications Total
£'000 £'000 £'000 £'000
Cost
At 1 October 2019 9,200 1,314 34 10,548
Additions 29 - 29
Translation differences (410) - (1) (411)
At 30 September 2020 8,819 1,314 33 10,166
Additions 2 - - 2
Acquisition of subsidiary - 3,875 - 3,875
Translation differences (534) 72 (3) (465)
At 30 September 2021 8,287 5,261 30 13,578
Amortisation/Impairment
At 1 October 2019 - 1,314 12 1,326
Amortisation - - 6 6
At 30 September 2020 - 1,314 18 1,332
Amortisation - - 6 6
Impairment 8,287 - 6 8,293
At 30 September 2021 8,287 1,314 30 9,631
Net book value
At 30 September 2021 - 3,947 - 3,947
At 30 September 2020 8,819 - 15 8,834
At 30 September 2019 9,200 - 22 9,222
The assets acquired with Greenfield are described at note 1.8. The
exploration and development licences comprise nine Utah oil shale leases
covering approximately 15,488 acres. These assets have been impaired in full
on 30 September 2021 for the reasons given in note 1.9.The impairment value
represents the estimated value in use of the assets concerned, which is
estimated at nil. The discount rate is not relevant for the purposes of
computing the quantum of the impairment loss. The impairment relates to assets
in the US geographical reporting segment.
10. Property, plant and equipment
Exploration and evaluation equipment
Total
£'000
Cost at 30 September 2019 431
Translation differences (20)
At 30 September 2020 411
Translation differences (25)
At 30 September 2021 386
Impairment
Charge for year 386
At 30 September 2021 386
Net book value
At 30 September 2021 -
At 30 September 2020 411
At 30 September 2019 431
These assets have been impaired in full at 30 September 2021 for the reasons
given in note 1.9.The impairment value represents the estimated value in use
of the assets concerned, which is estimated at nil. The discount rate is not
relevant for the purposes of computing the quantum of the impairment loss. The
impairment relates to assets in the US geographical reporting segment.
11. Investment in joint venture
Carrying value under equity method £'000
At 1 October 2019 -
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 (84)
Other comprehensive income-translation differences (77)
1,063
Acquisition of controlling interest (1,063)
At 30 September 2021 -
At 30 September 2020 1,224
At 30 September 2019 -
During the year, the Group acquired the remaining 50% interest in Greenfield
not previously owned by it. The acquisition did not satisfy the criteria for a
business combination under IFRS 3, such that the acquisition has been
accounted for as an asset purchase. The consideration for the acquisition is
the issue to Valkor LLC, the Group's former joint venture partner, of 592.8
million new ordinary shares in TomCo. The issue of the shares is contingent
upon the Company receiving funds from, or drawing down on, a loan or credit
facility granted in connection with the proposed construction of an oil sands
processing facility by August 2024.
Details of the assets and liabilities acquired by the Group on the acquisition
of control of Greenfield are as follows:
Non-current assets £'000
Development asset 3,875
Intangible assets 3,875
Current assets
Receivables at amortised cost 6
Other financial assets 146
Bank balances and cash 124
276
Total assets 4,151
Trade and other payables (523)
Loans (1,502)
Net assets 2,126
Cost under equity method at date of acquisition 1,063
Consideration for acquisition of remaining interest-contingent equity 1,063
consideration
There is no quoted market price for the Group's investment in Greenfield. The
fair value of the net assets acquired was deemed to be their cost. The value
of the contingent consideration is deemed to be the fair value of the net
assets acquired, in accordance with IFRS 2.
Summarised financial information for Greenfield at and for the period from 1
October 2020 to 25 August 2021 (comparative information is given for the
period from May 2020 (its incorporation) to 30 September 2020), when it ceased
to be a joint venture and became a subsidiary, is as follows:
2021 2020
£'000 £'000
Revenue - -
Loss from continuing operations (168) (80)
Other comprehensive income (154) (30)
Total comprehensive loss (322) (110)
Group share of total comprehensive loss (50%) (161) (55)
Non-current assets 3,875 2,091
Current assets 276 507
Total assets 4,151 2,598
Trade and other payables (523) (150)
Loans (1502) -
Net assets 2,126 2,448
Group share of net assets (50%) 1,063 1,224
12. Trade and other receivables
Group Group
2021 2020
Current £'000 £'000
Other receivables 51 64
Prepayments and accrued income 53 54
104 118
Non-current
Other receivables 25 26
Total Receivables 129 144
As at 30 September 2021, there were no receivables considered past due (2020:
£Nil). The maximum exposure to credit risk at the reporting date is the fair
value of each class of receivable and cash and cash equivalents as disclosed
in Note 14.
All current receivable amounts are due within six months.
13. Other financial assets
Group Group
2021 2020
Current £'000 £'000
Deposit 371 -
Total 371 -
As at 30 September 2021, Greenfield had paid a deposit of US$500,000 against a
possible acquisition of a 10% interest in Tar Sands Holdings II LLC, a Utah
limited liability company for US$2 million, The sum paid is deductible against
the final consideration, which was paid after the end of the financial year.
In the Directors' opinion, the fair value of the deposit was equivalent to its
cost.
14. Cash and cash equivalents
Group Group
2021 2020
£'000 £'000
Cash at bank and in hand 726 334
The Group earns 0.05% (2020: 0.05%) interest on its cash deposits,
consequently the Group's exposure to interest rate volatility is not
considered material.
15. Trade and other payables
Group Group
2021 2020
Current £'000 £'000
Trade payables 160 28
Other payables 395 30
Accruals 253 157
808 215
All current amounts are payable within six months and the Directors consider
that the carrying values adequately represent the fair value of all payables.
16. Deferred tax
Unrecognised losses
The Group has tax losses in respect of excess management expenses of
approximately £12.7 million (2020: £10.8 million) available for offset
against future Company income. This gives rise to a potential deferred tax
asset at the reporting date of £2.9 million (2020: £2.0 million). No
deferred tax asset has been recognised in respect of the tax losses carried
forward as the recoverability of this benefit is dependent on the future
profitability of the Company, the timing of which cannot reasonably be
foreseen but the excess management expenses have no expiry date. In addition,
subsidiary entities have accumulated losses of approximately £9 million for
which no deferred tax asset is recorded given the uncertainty of future
profits.
17. Share capital
Number of shares 2020
in issue £
Issued and fully paid at 1 October 2019 - shares of no par value 133,451,543 -
December 2019 - placing of new ordinary shares (note18) 142,307,692 -
July 2020 - placing of new ordinary shares (note 18) 375,000,000 -
July 2020 - exercise of warrants (notes 18 and 19) 22,875,000 -
At 30 September 2020 673,634,235 -
November 2020-placing of new ordinary shares (note 18) 777,777,777 -
At 30 September 2021 1,451,412,012
In July 2020 the Company issued 375 million shares and 187.5 million warrants
at a price of 0.4pence per share
There are 592.8 million contingent shares issuable (note 11).
18. Share premium
2021 2020
£'000 £'000
At 1 October 29,222 28,247
December 2019 - placing of new shares at 0.65 pence per share, net of costs - 864
July 2020 - placing of new shares at 0.4 pence, net of costs - 1,379
July 2020 - exercise of warrants (note 19) - 110
November 2020 - subscription of new shares at 0.45 pence per share, net of 3,226 -
costs
Issue of warrants to placees (note 19) (1,306) (1,223)
Issue of warrants as part of placing fees (note 19) - (155)
At 30 September 31,142 29,222
19. Warrants
At 30 September 2021, the following share warrants were outstanding in respect
of ordinary shares:
2021 2021 2020 2020
number Weighted average exercise price number Weighted average exercise price
Pence Pence
Outstanding at 1 October 269,791,515 1.0 967,429 4.4
Expired during the year (771,429) (3.5) (196,000) (8.2)
Granted during the year 435,555,554 0.85 291,895,086 1.0
Exercised during the year - - (22,875,000) 0.5
Outstanding at 30 September 704,575,640 0.88 269,791,515 1.0
Exercisable at 30 September 704,575,640 0.88 269,791,515 1.0
The inputs into the Black-Scholes model for calculating the estimated fair
value of warrants granted, at their grant date, were as follows:
2020
2021
Share price (pence) 0.45 0.64-0.65
Exercise price (pence) 0.45-0.9 0.4-1.5
Expected volatility 148% 171%
Risk-free rate 1% 1%
Expected period before exercise (years) 2 2
Expected volatility was determined by calculating the historical volatility of
the Company's share price. The expected life used in the model has been
adjusted, based on management's best estimate, for the effects of
non-transferability, exercise restrictions and behavioural considerations.
Issue of Warrants
3,610,520 warrants were issued during 2019 in connection with the placing of
new shares. The fair value of these warrants was assessed at £59,000. Of the
warrants issued during 2019, warrants over 2,839,091 ordinary shares were
exercised in 2019 and the remaining 771,429 expired in 2021.
291,895,086 warrants were issued during the year ended 30 September 2020 at
exercise prices ranging from 0.4p per share to 5.25p per share. 22,875,000 of
those warrants were exercised during that year at exercise prices ranging from
0.4p per share to 0.8p per share.
435,555,554 warrants were issued during the year ended 30 September 2021 at
exercise prices of between 0.45p and 0.9p per share.
Each warrant in issue is governed by the provisions of warrant instruments
representing the warrants which have been adopted by the Company. The rights
conferred by the warrants are transferable in whole or in part subject to and
in accordance with the transfer provisions set out in the Articles. The
warrants outstanding at 30 September 2021 had a weighted average exercise
price of 0.88p (2020: 1p) and a weighted average remaining contractual life of
0.95 years (2020: 1.59 years).
20. Non-controlling interests
Details of non-controlling interests are as follows:
Name of subsidiary Proportion of ownership interests and voting rights held by non-controlling Total comprehensive loss allocated to non-controlling interest Accumulated non-controlling interest
interests
2021 2020 2021 2020 2021 2020
% % £'000 £'000 £'000 £'000
TurboShale Inc. 20 20 (270) (36) (443) (173)
Summarised financial information for TurboShale Inc is as follows:
2021 2020
£'000 £'000
Revenue - -
Loss from continuing operations (185) (209)
Impairment losses (1,185) -
Other comprehensive income 17 31
Total comprehensive loss (1,353) (178)
Group share of total comprehensive loss (80%) (1,083) (142)
Non-current assets - 1,266
Current assets-bank balances and cash 2 4
Total assets 2 1,270
Trade and other payables (2,215) (2,130)
Net liabilities (2,213) (860)
21. Share-based payments
The Company implemented a share option scheme for its Directors during the
year ended 30 September 2018. Further issues of options took place in June
2020 and June 2021. Options are exercisable at a price equal to the quoted
market price of the Company's shares at the date of grant. The vesting period
is between six months and 1 year. If the options remain unexercised after a
period of ten years from the date of grant (5 years in the case of options
granted in June 2020) the options expire. Options are forfeited if the
director leaves the Company before the options vest.
Details of the share options issued during the year and outstanding at the
year-end are as follows:
2021 2021 2020 2020
number Weighted average number Weighted average
exercise price exercise price
Pence Pence
Outstanding at 1 October 17,365,078 1.50 5,142,855 5.25
Granted during the year 90,500,000 0.54 14,000,000 0.60
Lapsed during the year (2,000,000) 0.60 (1,777,777) 5.25
Outstanding at 30 September 105,865,078 0.70 17,365,078 1.50
Exercisable at 30 September 15,365,078 2,539,682
Details of the options held by each Director are provided in the Directors'
Report.
The inputs into the Black-Scholes model for calculating the estimated fair
value of options granted, at their grant date, were as follows:
2020
2021
Share price (pence) 0.54 0.6
Exercise price (pence) 0.54 0.6
Expected volatility 127-142% 150%
Risk-free rate 1% 1%
Expected period before exercise (years) 1.5 1.5
Expected volatility was determined by calculating the historical volatility of
the Company's share price. The expected life used in the model has been
adjusted, based on management's best estimate, for the effects of
non-transferability, exercise restrictions and behavioural considerations.
The fair value of each option granted during the year was estimated at 0.35
pence (2020: 0.35 pence) at the date of grant. The weighted average unexpired
life of the options at 30 September 2021 was 8.95 years (2020: 5.97 years).
The charge (2020: credit) recognised in profit or loss for 2021 was £135,000
(2020: £1,000).
Where equity instruments to be issued as consideration for the purchase of a
group of assets that does not constitute a business are within the scope of
IFRS 2, the value of the equity instruments is determined by reference to the
fair value of the net assets acquired. This is deemed to be cost at the date
of acquisition.
22. Financial instruments
The Group's financial instruments, other than its investments, comprise cash
and items arising directly from its operations such as other receivables, and
trade payables.
Management review the Group's exposure to currency risk, interest rate risk,
liquidity risk and credit risk on a regular basis and consider that through
this review they manage the exposure of the Group. No formal policies have
been put in place in order to hedge the Group's activities to the exposure to
currency risk or interest risk, however, this is constantly under review.
There is no material difference between the book value and fair value of the
Group and Company's cash and other financial assets.
Currency risk
The Group has overseas subsidiaries which operate in the United States and
include expenses, assets and liabilities denominated in US$. Foreign exchange
risk is inherent in the Group's activities and is accepted as such. The effect
of a 10% strengthening or weakening of the US dollar against sterling at the
reporting date on the dollar denominated balances would, all other variables
held constant, result in a gain or loss of approximately £6,000 (2020:
£1,000).
Interest rate risk
The Group and Company manage the interest rate risk associated with the
Group's cash assets by ensuring that interest rates are as favourable as
possible, whether this is through investment in floating or fixed interest
rate deposits, whilst managing the access the Group requires to the funds for
working capital purposes.
The Group's cash and cash equivalents are subject to interest rate exposure
due to changes in interest rates. Short-term receivables and payables are not
exposed to interest rate risk. The Group has no borrowings as at 30 September
2021.
A 1% increase or decrease in the floating rate attributable to the cash
balances held at the year-end would not result in a significant difference on
interest receivable.
Liquidity risk
At the year end the Group and Company had cash balances comprising the
following:
Group Group
2021 2020
Bank balances £'000 £'000
British Pounds 667 319
US Dollars 59 15
Total 726 334
All financial liabilities of the Group mature in less than 12 months: details
of the analysis of such liabilities is provided in Note 14.
Liquidity risk arises from the Group management of working capital. It is the
risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due. Refer to Note 1.1 for details of going concern.
The Group's policy is to ensure that it will always have sufficient cash to
allow it to meet its liabilities when they become due. To achieve this aim, it
seeks to maintain cash balances (or agreed facilities) to meet expected
requirements for a period of at least 90 days.
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or a
counter party to a financial instrument fails to meet its contractual
obligations. The Group is principally exposed to credit risk on cash and cash
equivalents with banks and financial institutions. For banks and financial
institutions, only independently rated parties with an acceptable rating are
utilised. There has been no significant change in credit risk since the
recognition of applicable assets and therefore no credit losses have been
recognised on financial assets.
Capital management policies
In managing its capital, the Group's primary objective is to maintain a
sufficient funding base to enable the Group to meet its working capital and
strategic investment needs. In making decisions to adjust its capital
structure to achieve these aims, through new share issues or debt, the Group
considers not only its short-term position but also its long-term operational
and strategic objectives.
23. Changes in liabilities arising from financing activities
The table below details changes in the Group's liabilities arising from
financing activities, including both cash and non-cash changes. Liabilities
arising from financing activities are those for which cash flows were, or
future cash flows will be, classified in the cash flow statement as cash flows
from financing activities:
1 October Financing cash flows Non-cash transactions 30 September
Group 2021 £'000 £'000 £'000 £'000
- - -
Loans -
Total - - - -
Group 2020
- - -
Loans -
Total - - - -
24. Related party disclosures
The Directors are Key Management and information in respect of key management
is provided in Note 6.
25. Ultimate controlling party
As at 30 September 2021 and 30 September 2020 there was no ultimate
controlling party.
26. Operating lease commitments
At 30 September 2021, the Group had no operating lease commitments (2020:
£nil).
27. Subsequent events
i. In November 2021, the Group completed the
acquisition of a 10% interest in Tar Sands Holdings II LLC at a cost of US$2
million, less amounts paid to 30 September 2021 of US$500,000. The completion
of the purchase was financed by a loan of US$1.5 million from Valkor Oil &
Gas LLC, its former joint venture partner in Greenfield. The terms of this
loan are summarised in the directors' report.
ii. A newly formed subsidiary of Greenfield entered
into an oil and mineral lease with Tar Sands II Holdings LLC over
approximately 320 acres of land in Uintah County Utah USA for a period of 10
years from 15 November 2021. The lease gives the Group exclusive rights to
explore, drill and mine for, and extract, store and remove oil, gas,
hydrocarbons and associated substances on the site. A royalty is payable equal
to 12% of the net return per barrel of product.
iii. In November 2021, warrants in respect of 46.6
million new ordinary shares were exercised for a total consideration of
£210,000.
iv. In January 2022, the Group raised £1.25 million
before costs in a placing of 250 million new ordinary shares at 0.5p per
share.
v. In January 2022, on retirement from the Board,
Richard Horsman waived 7.5 million options on receipt of a payment of £30,000
from the Company.
vi. In January 2022, the Group entered into a services
agreement with Heavy Sweet Oil LLC to assist it with permitting and government
relations in respect of their planned drilling programme adjacent to the D
Tract of the Tar Sands Holdings II LLC ("TSHII") site in the Uinta Basin,
Utah, United States. Heavy Sweet Oil agreed to pay TomCo US$10,000 per month
for its services, with the agreement backdated to start from 1 January 2022.
vii. In March 2022, Greenfield entered into a Memorandum
of Understanding ("MoU") with Vivakor Inc. ("Vivakor'') covering, inter alia,
the proposed development by Vivakor of an enhanced oil sands processing plant
on the Tar Sands Holdings II LLC ("TSHII") site located in the Uinta Basin,
Utah, United States and the provision of professional services by
Greenfield. In addition, Vivakor entered into a lease with TSHII covering
approximately three acres of the TSHII site to accommodate its planned
operations, which includes the future supply of oil sands by TSHII.
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