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TomCo Energy: Oil sands project moving forward

TomCo (LON:TOM) is an oil & gas exploration and production company which, operates in the Uinta basin in Utah. The company has announced a joint venture (JV) to unlock the potential for oil sands development within the area using an innovative new production technology.

The Uinta basin and adjacent formations hold some of North America’s largest deposits of oils sands. In December 2019 TomCo announced a project in conjunction with the global EPCI company Valkor LLC, to examine a scalable modular production plant that could be used to extract oil from the sands with cost efficiency and low environmental impact. The JV announced on June 19th aims to take this project to its next stages and to establish a production facility that could be operational before the end of 2021 in our view.

Fuel oil not crude

The process which is under development would produce a low sulphur fuel oil product that could be sold directly into the market place as bunker fuel for shipping, rather than being sold as a crude product to refineries. In this report, we examine how this improves the commercial dynamics of TomCo’s proposition. Among other things, the price of bunker fuel has not gone below $30/bbl at any point in the recent market turbulence.

Aside from the ready-for-market output product, the separation system has other unique advantages compared with existing oil sands separation technologies, including:

  • Limited environmental impact, with a modest water requirement, and no “dirty” sand to remediate at the end of the process
  • A scalable modular system with limited capex requirement

 

Quick facts: TomCo Energy plc

Price: 0.675 GBX

AIM:TOM
Market: AIM
Market Cap: £4.55 m
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TomCo Energy: Analyst highlights attractive economics of a new oil sands...

Proactive Research analyst Ed Stacey takes a look at TomCo (LON:TOM) following the news of a joint venture to help unlock the potential for oil sands development using an innovative new production technology. TomCo's an oil & gas exploration and production company which operates in the...

4 weeks ago

12 min read