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TomCo Energy (LSE:TOM) is a top moving stock today, up more than 25% as investor confidence soars in shale oil processing.
The company owns leases covering around 3,000 acres of some of the best shale oil lands in Utah, estimated to hold as much as 230 million barrels of oil. This deposit is part of the greater Green River Formation, which is a region with oil holdings estimated up to 1.8 trillion barrels, 800 billion of which are said to be recoverable. TomCo bought a license in March 2010 to use technology developed by Red Leaf Resources called EcoShale to extract the oil most efficiently.
EcoShale Process
The EcoShale process involves heating the mined shale in an enclosed capsule, extracting two different types of shale oil products. This process is a much cleaner and more efficient way of extracting oil from shale and has allowed for an increase in shale extraction in the Green River region. The process requires no water, uses lower temperatures for operation, and allows for quick site reclamation after the shale has been extracted.
Strategic Advantages of Shale
The estimated potential reserves in the Green River Formation hold more than triple the proven reserves in Saudi Arabia. The political climate with reference to fossil fuels in America is also conducive to the expansion of shale oil extraction, as pressure is increasing to reduce dependence on foreign oil. These market conditions, in combination with TomCo‘s strategic holdings in Utah and their license to use EcoShale processing technology, have made this stock a popular buy. London Mining founder Christopher Brown’s company Kenglo made an investment and now owns 29.9% of the company. TomCo was also recently valued at 10p per share by Optiva Securities, who calculated a pre-tax net present value of $687 million at a 10% discount rate for TomCo’s Holliday oil shale project.
ADVFN Users Weigh In
The popular opinion is that TomCo has nowhere to go but up, with many ADVFN users taking to the blogs about their expectations. One user, rmart wrote today, “you search for years on AIM for an opportunity like this,” while devil20 claimed, “this chart is looking more n more like a stairway to heaven.” It would seem that the US shale industry is poised for a take-off, and TomCo is along for the ride, quickly becoming a long-term hold for many traders.
References
↑ TomCo Energy Oil Shale Assets
↑ About TomCo
↑ EcoShale In-Capsule Technology
↑ TomCo Energyy Oil Shale Assets
↑ Optiva Securities
↑ TomCo Energy – At the Vanguard of a US Oil Shale Industry?
