Operational Update

RNS Number : 6418Y

TomCo Energy PLC

05 March 2012

 



5 March 2012

TomCo Energy Plc

(''TomCo Energy'' or ''the Company'')

(AIM:TOM)

Operational Update

Further to the announcement made on 23 August 2011 TomCo Energy PLC, the AIM quoted company with oil shale assets in the State of Utah, USA, is pleased to report progress on a number of key contracts which were entered into to provide some of the baseline environmental and operational information necessary for a comprehensive development plan for the Holliday Block and the various permit applications.

Highlights

·     In December 2011 the Company received the Hatch Engineering FEL 2 (Pre-Feasibility Study) Report for Red Leaf Resources Inc ("Red Leaf"), a key component to proving the project economics at Pre-Feasibility level

·    Several Epic Engineering studies completed in preparation for production at the Holliday Block

·    SRK Consulting ("SRK") engaged in February 2012  to  report on TomCo's resource - results are expected in H2 of this year

·     Completion of early stage geological, infrastructure and water-use studies

Holliday Block

On 22^nd of September 2011 the Company entered into an Engineering Service Agreement with Rocky Mountain Power ("RMP") under which RMP is evaluating various alternative routes and options for the provision of high voltage line power to the Holliday Block site for the supply of electricity for oil production. On 30^th January 2012 the First Amendment to this Agreement was signed which detailed the costs and set out the timetable for the programme. This work continues.

In December 2011 the Company received the Hatch Engineering FEL 2 report produced for Red Leaf Resources Inc ("Red Leaf") under the terms of the Red Leaf "EcoShaleTM" License which details the engineering requirements for the development of the Holliday Block. The project economics from the FEL2 report remain in line with TomCo's admission document and the Board believes that it, along with the inclusion of Norwest's mining plan, should enable SRK to upgrade TomCo's JORC resource to "probable reserve" status, as it will prove the project economics at Pre-Feasibility Study level, as required under JORC.

As previously announced the Company has contracted Epic Engineering ("Epic") to undertake a number of studies to prepare the way for production at the Holliday Block and several of these have now been completed:

·    Roads and Access Study: the compilation of road status, usage and projected traffic loading, implied by the development of a 9500 bopd EcoShaleTM facility at Holliday Block and recommendations and costs of upgrades for consideration by the Uintah County authorities. This work has now been completed and sets out the recommendations and costs.

·    High Resolution Topographical Study of Holliday Block with a detailed ground survey, in order to further refine the geological model and assist with the upgrade of the resource assessments. This work has been completed and the results delivered to SRK for their work in reporting on the TomCo resource.

·    A boundary survey - involving a field survey and staking. This has been completed.

·    A Preliminary Environmental Study  involving a field study of drainage, seeps and springs to prepare for a "Waters of the US" study. This is in progress.

·    A Water Resources Inventory undertaken by Epic providing data on drainage patterns, storm water predictions, seeps, springs etc in the Holliday Block area and providing necessary baseline data required for environmental studies and future development permit applications, and also to determine additional water supply requirements for the planned TomCo development.  This is in progress.

On 29^th July 2011 the Company contracted Norwest Corporation ("Norwest") to conduct field mapping at the Holliday Block to map the mahogany zone outcrop and to develop a detailed and fully costed provisional Mine Plan for TomCo's Holliday Block development. Norwest has been working closely with Red Leaf on their Mine Plan for the nearby Seep Ridge EcoShaleTM project and bring this experience to bear directly on the Holliday Block Project.

The TomCo Mine Plan will be based on the detailed geological model that will be developed by SRK Consultants (SRK) from the Company's initial core-hole drilling programme completed in 2010 and will be the principal input into the development of Feasibility Economics for the Project.  This work is in progress.

Currently SRK are engaged to check the assays of the drill samples as part of the consideration of an upgrade of TomCo's JORC compliant indicated resource to measured resource, which involves updating the geological model with the new topographical survey data and the recalculation of the resource through incorporating check core assays and the detailed surface mapping of the Mahogany oil shale outcrop. These results are expected in H2 2012.

Sir Nicholas Bonsor, Chairman of TomCo, commented today,

"We are making good progress with the pre-development work with a significant number of studies completed and several more identified to complete our pre-development programme for the Holliday Block site.  We will continue to keep our shareholders up to date with both corporate and operational developments as we move towards our production targets."

For further information please visit www.tomcoenergy.com or contact:

TomCo Energy -                                                                               0207 660 070

Sir Nicolas Bonsor, Chairman

Numis -                                                                                              0207 260 1000

Alastair Stratton/Oliver Cardigan, Corporate Finance

James Black, Corporate Broking

Newgate Threadneedle -                                                           0207 653 9840

Richard Gotla/Terry Garrett

Notes to Editors:

TomCo Energy Plc owns oil shale leases covering approximately 3,000 acres in the Green River Shale Formation, Uintah County, Utah. The leases have been independently estimated by SRK Consultants Ltd to hold up to 230 million barrels of oil in 4 separate tracts. Around 123 million barrels of this resource lie on the main tract of Holliday Block lease, and have now been classified as an Indicated Resource under the JORC Code.

TomCo has entered into a License with Red Leaf Resources Inc (Red Leaf), which owns the EcoShale^TM In-Capsule Process (EcoShale), to use this unique and environmentally sensitive technology to extract oil from TomCo's leases. Red Leaf is planning an eventual 9,500 bopd commercial operation at their Seep Ridge site, which lies about 15 miles SW of TomCo's Holliday Block lease.

TomCo's strategy is to develop the Holliday Block lease as a similar follow-on project to Seep Ridge using the EcoShale^TM In-Capsule Process, with the same targeted production of 9,500 bopd.

Glossary:

bopd: barrels of oil per day

JORC Code: The mineral resource classification code devised by the Australasian Joint Ore Reserves Committee.

 

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