TomCo Energy plc (LON:TOM), the US operating oil development group focused on using innovative technology to unlock unconventional hydrocarbon resources, has announced that the Company’s wholly owned subsidiary, Greenfield Energy LLC has been awarded a 10 year marginal tax reduction, with a potential aggregate value of up to approximately US$76.3 million, in relation to its planned project activities on the Tar Sands Holdings II LLC site located in the Uinta Basin, Utah, United States. This post-performance corporate incentive is part of the Utah Legislature’s Economic Development Tax Increment Financing programme.
As previously announced, TomCo, via Greenfield, currently owns a 10% Membership Interest in TSHII with an exclusive option, at its sole discretion, to acquire the remaining 90% of the Membership Interests for certain additional cash consideration in the period up to 31 December 2022.
Under the EDTIF programme, Greenfield has entered into an agreement with the Governor’s Office of Economic Opportunity, such that in return for investing in, and creating new jobs in, the region, it may receive up to 50% of the additional state taxes it will pay over the 10-year life of the agreement in the form of a Utah Legislature-authorized Rural Economic Development Tax Increment Financing (REDTIF) tax credit. Each year that Greenfield meets the criteria in its contract with the state and new incremental state taxes have been receipted and verified, it will qualify for a portion of the total tax credit up to an aggregate amount over the 10 year period of approximately US$76.3 million.
Dan Hemmert, the Utah Office of Economic Opportunity’s Executive Director, commented: “We are excited to see Greenfield’s growth plans in the Uintah Basin. Energy Independence has never been more important to the nation, and we are proud to support this venture which will provide significant investment into rural Utah. We are also pleased to see the planned application of innovative processes, aggressive carbon sequestration, and efforts to be carbon neutral – from well to tailpipe.”
Commenting, John Potter, CEO of TomCo Energy, said: “The amount of local support we have received in advancing our project to date has been outstanding and I would like to thank everyone involved. We believe our proposed development project in Uintah County is based on an exceptional deposit with tremendous potential. We continue to make good progress with our plans for the TSHII site and continue to advance the previously announced due diligence exercise being undertaken by a potential financing party currently interested in backing our plans for Greenfield. We look forward to providing further updates in due course.”
