TomCo Energy : Unaudited interim results for the six months ended 31 March 2020

30 June 2020

TomCo Energy plc

("TomCo" or the "Company" or the "Group")

Unaudited interim results for the six-month period ended 31 March 2020

TomCo Energy plc (AIM: TOM), the oil exploration and development company focused on using innovative technology to unlock unconventional hydrocarbon resources, announces its unaudited interim results for the six-month period ended 31 March 2020.

HIGHLIGHTS

• • Engagement with Valkor LLC ("Valkor") to produce a Pre-FEED study to demonstrate the economic viability of Petroteq Energy Inc's ("Petroteq") oil sands separation process.

• • Post period end, entered into a joint venture agreement with Valkor for the establishment of Greenfield Energy LLC ("Greenfield") to develop, subject to funding, the Petroteq test plant into a pre-commercial plant, to seek to verify the design for a commercial scale (10,000 bopd) plant.

• • Board re-organisation with Andrew Jones stepping down and Stephen West joining as Non-Executive Chairman.

John Potter, TomCo's Chief Executive Officer, said: "The establishment of the JV with Valkor to form Greenfield, post the period end, is a major step in us seeking to prove the commercial scale potential of Petroteq's oil sands separation process. Valkor has developed a detailed understanding of the process requirements and the Board is confident that, subject to funding, the upgrades to the Petroteq test plant and the resulting FEED will confirm our expectations that a commercial scale plant is financially viable."

Enquiries:

For further information, please visitwww.tomcoenergy.com or contact:

TomCo Energy plc	[phone]
John Potter (CEO)
Stephen West (Chairman)
Strand Hanson (Nominated Adviser)	[phone]
James Harris / Richard Tulloch / Jack Botros
Turner Pope (Broker)	[phone]
Andy Thacker / Zoe Alexander

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.

DIRECTORS' REPORT

Operational

With the continuing global disruption to travel from Covid-19, the Group's operations on its Holliday A Block, including in respect of TurboShale's RF technology, have been postponed for the rest of 2020. A decision on the next steps of the TurboShale technology development will be made towards the end of 2020.

The Company has continued to explore other opportunities for its oil shale leases within the Uinta Basin, Utah, (the "Leases") which resulted in the Company being introduced to Valkor LLC ("Valkor"), an international engineering, procurement, construction and installation and field operations company, with operations in the US, South America and Africa both on and offshore and the owner and operator of gas and oil fields in Trinidad, USA, Turkey and the Ukraine, in September 2019.

In December 2019, the Company entered into a memorandum of understanding ("MoU") with Valkor, alongside a placing to raise £925,000 (gross), to explore the potential to develop a joint venture ("JV") for the development of a commercial scale oil sands separation plant on one of the Company's existing leases using Petroteq Energy Inc's ("Petroteq") closed loop system for use in the recovery of oil from oil sands (the "Oil Sands Technology"). The Company believes that Valkor has a good understanding of the Oil Sands Technology, having assisted Petroteq with the design improvements for its closed loop system for use in the recovery of oil from oil sands.

Subsequent to entering into the MoU, the Company undertook a study of the potential to deploy the Oil Sands Technology at a suitable location across its Leases. The desktop study of the Leases determined that, while oil sands were present at depth, more suitable sites with near surface oil sands were identified in the vicinity of the Leases and these will be the focus of the parties going forward.

On 19 March 2020, the Company and Valkor announced that they had agreed to enter into a binding exclusivity agreement ("Exclusivity Agreement") to continue discussions regarding forming a JV to, inter alia, explore the potential to deploy the Oil Sands Technology at a suitable location. The parties also agreed to undertake a Pre-FEED study, to be undertaken by Valkor and verified by a third party, to demonstrate the economic viability of the Oil Sands Technology, with a gross budget of US$250,000 to be funded equally by the parties and if the results of the study were sufficiently favourable, the Company expected to form a JV with Valkor.

Following the period end and receipt of the draft Pre-FEED study, which provided sufficient comfort to the TomCo Board to form a JV, the Company was pleased to enter into a joint venture agreement with Valkor (the "JV Agreement") in June 2020, to establish Greenfield Energy LLC ("Greenfield"), that will seek to pursue the development of a plant utilising the Oil Sands Technology at a location yet to be determined in Utah, USA.

Under the terms of the JV Agreement, Greenfield will be equally owned by TomCo and Valkor, with the Company providing funding to Greenfield, subject to having such funds available and being satisfied as to the use of such funds, of up to US$1.5 million, to enable Greenfield to be able to complete, inter alia, the required upgrades to Petroteq's existing oil sands plant at Asphalt Ridge, Utah (the "POSP"), and to undertake the proposed test programme as detailed below, together with funding TomCo's contribution to the FEED. Pursuant to the JV Agreement, Valkor will provide, to Greenfield, the services for the completion of the pre-FEED and the FEED up to a value of US$375,000, along with their management and operating experience and any other information and other valuable resources owned by and/or controlled by Valkor. Accordingly, until such time as TomCo has secured sufficient funding to finance its contribution to Greenfield, Greenfield will not be in a position to materially advance operations at the POSP, which includes making the required upgrades and being able to undertake the proposed work programme, or complete the FEED.

Under the JV Agreement, Valkor has granted a licence to Greenfield, for the use on all future plants that are majority owned and operated by Greenfield in Utah, to its existing Intellectual Property ("IP") and knowhow for the processing of oil sands into heavy fuel oil. All modifications and improvements to the IP developed by Greenfield, including in relation to the upgrade of the POSP, will belong to Greenfield, which the Board of TomCo believes will allow Greenfield to develop its own oil sands plant, subject, inter alia, to identifying a suitable location. Greenfield will seek to identify and securesuitable locations in Utah for a commercial scale (up to 10,000 barrels of oil per day ("bopd")) oil sands plant.

In respect of the POSP, Valkor has entered into an agreement with Petroteq (the "Work Order"), for Valkor to take over the management and operations of the POSP. Pursuant to the JV Agreement, the Work Order will be assigned to Greenfield, and Valkor, as part of its contribution to Greenfield, will undertake the works described in the Work Order, and Greenfield will, subject to funding being provided by TomCo, undertake certain upgrades to the POSP and run associated tests to demonstrate the POSP's commerciality.

In addition, Valkor has entered into a new lease, effective from 1 July 2020, for a primary term of 12 months, with the landlord of the POSP site, which will allow Valkor access to the land to be able to operate the POSP to undertake the necessary upgrades and tests as well as to mine for feedstock for the POSP. Pursuant to the lease, in addition to a monthly rent, the landlord will be entitled to certain royalty payments in respect of any commercial produce from the POSP and/or associated operations. Valkor has granted Greenfield the right to occupy the site to complete the upgrade works and operations of the POSP proposed under the Work Order.

The proposed upgrade to the POSP will, subject to agreement being reached with Quadrise Fuels International plc ("Quadrise"), include a commercial trial of Quadrise's MSAR® Technology at the POSP.

Quadrise has confirmed that it has agreed in principle with Valkor to the deployment of MSAR® trial equipment for the commercial trial at the POSP for a price of up to US$150,000, which has been taken into account in Greenfield's budget for the proposed work programme. Quadrise has confirmed that it will continue to work in good faith to finalise the process design and a trial agreement for commercial trial with Valkor, including the terms of the scope and timing of the trial.

In parallel with the commercial trial, Quadrise and Valkor continue to cooperate in good faith to agree the commercial terms of a conditional MSAR® licence and commercial supply agreement for the production of MSAR® fuel in respect of the development of a commercial MSAR® plant of up to 10,000 bopd. Quadrise has agreed with Valkor that any licence ultimately granted to Valkor under the terms of their memorandum of understanding, will be limited to the deployment of the MSAR® Technology in Utah, USA, in connection with the processing of sweet heavy or paraffinic crude oil and will be capable of being assigned to Valkor group joint ventures, including Greenfield, in the future.

A conditional licence will only be finalised upon and following, inter alia, satisfactory results of the commercial trial, the agreement between the parties as to commercial terms for the development of a commercial MSAR® plant of up to 10,000 bopd and the entry of binding agreements.

The Company announced a £1.5 million placing alongside the JV Agreement, which was subsequently terminated as announced on 19 June 2020. As set out above, in order to advance Greenfield and the planned upgrade and works programme at the POSP, TomCo will need to raise further funds.

Board changes

Andrew Jones stepped down as Executive Chairman in March 2020 to pursue other opportunities and I was pleased to step into the role of Non-Executive Chairman. On behalf of the Board, I would like to thank Andrew for his hard work as Executive Chairman over the last five years and the integral role he played in the development of the Company and wish him all the best with his future endeavours.

Following my appointment as a Non-executive Director in February 2020, I subsequently became Non-executive Chairman following Andrew stepping down.

Funding

During the period we raised £925,000 (gross) via a placing in December 2019, through the issue of 142,307,692 new ordinary shares at a price of 0.65 pence per share, with the net proceeds being used to provide general working capital and to undertake the engineering studies in respect of theoil sands opportunity.

As at 29 June 2020, TomCo had approximately £340,000 of cash available to it. Prior to the cost of any works to be undertaken under the JV Agreement and associated upgrades to the POSP, which are yet to be agreed, the Board believes the Group has sufficient funds through to the end of 2020, when it will need to raise further funding in order to meet its liabilities and commitments as they fall due as well as to provide additional working capital for the Group.

The Company continues to require further funding in order to fund, inter alia, its contribution of US$1.5 million to Greenfield pursuant to the JV Agreement. Until such funds have been secured, Greenfield will not be in a position to materially advance operations at the POSP, which includes making the required upgrades and being able to undertake the proposed work programme.

We thank shareholders for their continued support, and we look forward to keeping shareholders updated on progress as we work towards securing funds to be able to advance the upgrades to the POSP and associated tests pursuant to the JV Agreement and Work Order.

Stephen West

Non-Executive Chairman

Condensed consolidated statement of comprehensive income For the six-month period ended 31 March 2020

Revenue Cost of sales Gross profit/(loss)

Administrative expenses Operating loss

Finance income/(costs)

Loss on ordinary activities before taxation Taxation

Loss from continuing operations

Unaudited

Six months

ended

31 March

2020

NotesUnaudited Six months ended 31 March

£'000

Audited

Year ended 30 September

2019 £'000

2019 £'000

3

- - -

(377)

- - - (519)

- - - (778)

(377)

(519) (778)

1 (376)

(5) (4)

(524)

(782)

-

(376)

- (524)

- (782)

Loss for the period/year attributable to: Equity shareholders of the parent Non-controlling interests

Items that may be reclassified subsequently to profit or loss

Exchange differences on translation of foreign operations

Items that will not be reclassified subsequently to profit or loss Fair value gain on non-derivative equity instrument

Other comprehensive income for the year attributable to:

Equity shareholders of the parent

Non-controlling interests

(355) (21)

(376)

(107)

-

(108)

1

(459) (749)

(65) (33)

(524)

(782)

(24) 408

2 2

(22)

-417 (7)

Other comprehensive income

(107)

(22) 410

Total comprehensive loss attributable to: Equity shareholders of the parent Non-controlling interests

Loss per share attributable to the equity shareholders of the parent

Basic & Diluted Loss per share (pence)

(463) (20)

(483)

(481) (332)

(65) (40)

(546)

4

(0.16)

(0.56)

(372)

(0.73)