Quadrise Fuels International PLC (LON:QFI) has told investors it has now agreed in principle to the deployment of its MSAR alternative marine fuel trial equipment for a project managed by Valkor in Utah.
Valkor is a partner with AIM-quoted TomCo Energy PLC (LON:TOM) for the enhancement of a oil sands plant in Utah which will be retooled for a production trial. The project will incorporate Quadrise’s MSAR technology which can be used to treat heavy oil products to create a low-cost alternative fuel.
Quadrise said it has agreed to the MSAR deployment during Phase 1 of the project for a price of US$150,000 and it agrees to work in good faith with Valkor to finalise the process design and trial agreement.
It added that it has also agreed that any licence ultimately granted to Valkor will be limited to the deployment of MSAR technology in Utah in connection with the processing of sweet heavy or paraffinic crude oil, and will be capable of being assigned to Valkor group joint ventures in the future.
A conditional licence will only be finalised following satisfactory results of the Phase 1 testing, along with the agreement over Phase 2 commercial terms and the entry into binding agreements.
"We look forward to continuing our discussions with Valkor and to progressing the trial in Utah with Valkor and their partners, including TomCo, to demonstrate the effectiveness of our technology in enabling the sweet heavy or paraffinic oil deposits there, and the subsequent commercial development," Mike Kirk, Quadrise chairman said in a statement.
TomCo share trading suspended
Meanwhile, in a separate statement, TomCo said trading in its shares are suspended on AIM and noted that it is in talks with its broker regarding the status of the share placing it announced yesterday.
It comes after Quadrise on Wednesday issued a clarification statement to say it had not, at that time, agreed to licence Valkor to use MSAR for hydrocarbons produced from oil sands in Utah or for any other purpose – though it acknowledged that evaluation work was underway which may lead to the granting of a conditional licence.
Quadrise added then that it had not had any direct discussion with TomCo or any of Valkor's partners in Utah to date.
In today's statement, TomCo noted that Valkor does now have a binding memorandum of understanding with Quadrise, setting out steps to put a licence in place for MSAR, but Valkor does not, however, have the ability to grant such a licence to the Greenfield joint venture vehicle at the current time.
Detailed in Wednesday’s statement, TomCo and Valkor were set to use Greenfield Energy – with each respectively owning 50% of the company – to pursue the Utah project. It was agreed between the partners that TomCo would fund Greenfield and Valkor would, via Greenfield, use a licence agreement for MSAR.
TomCo at the same time agreed to raise £1.5mln of new capital via a share placing, selling 375mln shares - which would be 136% of its current share capital - at a price of 0.4p per share.
Today, TomCo said “the company confirms that it is in discussion with the Company's broker regarding the status of the placing and will provide a further update to shareholders as soon as possible and confirms that, in the meantime, the ordinary shares will remain suspended from trading on AIM.”
Tomco shares were suspended prior to this morning’s announcement, at 2.52p.m. on June 17, 2020, as it sought clarification over Valkor’s agreements with Quadrise.
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