TomCo Energy PLC’s (LON:TOM) joint venture Greenfield Energy has entered a deal to acquire a site in Utah.
Greenfield has inked an agreement with Endeavour Capital Group LLC ("Endeavour") and Tar Sands Holdings II LLC for the potential acquisition of some 760 acres and non-producing assets in Utah’s Uintah County.
It intends to use the land for the mining of oil sands and the construction of a commercial-scale processing plant, based on the findings of the ongoing pilot operation at Petroteq’s oil sands plant (POSP) at Asphalt Ridge, also in Utah. TomCo highlighted that the selected site comprises infrastructure, plant and equipment, along with an existing large mine permit that could be used in the future by Greenfield.
"I am delighted that Greenfield has secured the right to acquire a suitable site for the potential construction, subject to funding, of its first commercial scale plant,” said TomCo chief executive John Potter. “In the meantime, the POSP continues to produce saleable oil and sand and we look forward to providing further updates in due course as matters progress."
Greenfield has paid a non-refundable deposit of US$200,000 to secure a 90 day due diligence period, and it will have an exclusive option for up to 120 days to acquire an initial 10% stake in the property for £2mln. It will then receive an option to acquire the other 90% for US$15.25mln before the end of 2021, or US$16.25mln in 2022.
TomCo noted that Greenfield will in parallel progress talks with potential funders to enable the transaction.
The operation in Utah is part of a project that’s being advanced by the Greenfield Energy LLC joint venture company, which comprises Valkor LLC and TomCo. The pilot utilises a plant owned by Petroteq Energy and includes technology licenced from Quadrise Fuels International.
Subject to the pilot results and the FEED, Greenfield will develop a new 10,000 bopd plant – comprising two 5,000 bopd trains – utilising design improvements and knowledge gained from the POSP pilot.