TomCo Energy Share Price Rallied 18.2% on a £100K Capital Raise

The TomCo Energy Plc (LON: TOM) share price rallied 18.2% after announcing that it had raised gross proceeds of £100,000 through a subscription for 125,000,000 new ordinary shares priced at a premium of 0.08p each. The rally higher was expected, given that the participating investors paid a premium to acquire the new shares.

The Subscription Shares will constitute approximately 3.9% of the Company's expanded issued share capital. The Subscription price represents a notable premium of around 45.5% compared to the mid-market closing price on AIM, which was 0.055 pence per Ordinary Share on October 12, 2023, the latest practicable business day before today’s announcement.

The purpose behind the Subscription is to secure additional funds essential for covering the anticipated expenses associated with the Company's efforts to advance the plans for its wholly owned subsidiary, Greenfield Energy LLC, concerning the Tar Sands Holdings II LLC (TSHII) site situated in the Uinta Basin, Utah, United States.

As previously disclosed, Greenfield holds a 10% Membership Interest in TSHII and has an exclusive option, at its sole discretion, to acquire the remaining 90% of the Membership Interest for an additional cash consideration of US$17.25 million, valid until December 31, 2023, alongside a matching right, as detailed in the June 6, 2023, announcement.

The Company is actively exploring various avenues, as outlined in its August 17, 2023 announcement, to secure a potential funding package for Greenfield. The funding package aims to empower Greenfield to eventually exercise the Option and pursue its previously revealed broader development plans.

Given the challenging economic environment, the funding process is taking longer than anticipated. However, the Company is engaged in ongoing discussions, and the Board remains hopeful that an appropriate transaction can be successfully concluded in the fourth quarter of 2023. 

However, it is crucial to note that there is no certainty regarding the successful conclusion of a suitable funding proposal for Greenfield, nor are the precise terms or structure of any such funding package or financing arrangement confirmed at this stage. Further updates will be provided as necessary.

TomCo Energy (TOM) share price. 

The TomCo Energy share price rallied 18.18% to trade at 0.065p, from Thursday’s closing price of 0.055p.