Tomco Energy Share Discussion Threads

[stuart little] 05/2/2022 20:35

If john had £100k skin in the game it wouldn't influence the lender one way or the other. The 5k plant project fundamentals either stack up or they don't. Director holdings in Tomco will not have any bearing on the lenders decision. Also Greenfield are raising the money, not Tomco. Small point but worth remembering. Plenty of Aim companies with directors with major holdings well under water. No guarantees.

[thrgef] 05/2/2022 19:23

I wouldn't be surprised if they had to give up a percentage of Greenfield in a JV as part of the funding package, unless the profit margins are that strong

[lopodop] 05/2/2022 19:11

RMART
Whether or not you take point, TD has rightly pointed to the issue of the directors' equity in TOM. It will not assist a fruitful negotiation - in fact this could wreck the whole project. This is not trashing but cautioning! Those that have met or have direct links to the BOD should have laboured this - it's too late, well almost - a late buy in by each director would certainly grease the cogs.

[rmart] 05/2/2022 18:28

lopodop, fenners66, thediddymen, ace ventura, wilson2

Anyone dropping in here please take note, the above posters have been trashing tomco for years. They will NEVER accept tomco is moving forward. Totally biased and a crazy daily deramping gang.

[lopodop] 05/2/2022 16:50

Well done TD for referring to the Directors'shareholdings OR RATHER THEIR RELUCTANCE to invest here. How on earth they have the guile to attempt a major deal closure without having already a stake in TOM.

SB must already be slightly bemused by this state of affairs. Any serious financier alone or in a syndicate would immediately laugh at a proposition where DIRECTORS own peanuts in the subject company. Don't forget you are talking about the US where they talk big and expect Directors to lead the way - BIG TIME!

And by the way don't say they have personal commitments getting in the way. Look at each of them and note where they are invested. Seriously it is a disgrace and is going to be a black mark which TOM most certainly does not need. PATHETIC is one adjective that comes to mind - are these BODS really serious?

[damac] 05/2/2022 16:33

As SL says, receiving the term sheet from the funder will definitely be RNS’d as it is a major step forward in securing the required finance.

The term sheet from the funder will propose the heads of terms that they are offering on the deal. Greenfield will then conduct due diligence on the offer (as mentioned in the last RNS) by having it looked over by their legal reps. There may be a bit off haggling back on forth on the terms offered , alternatively, Greenfield may be entirely satisfied by what is offered. Once both parties have agreed on the final heads of terms, the funder then draws up a contract based on the agreed terms.

So to answer your last part, I wouldn’t expect to see any actual detail on what the terms are until the binding contract is put to Greenfield and signed off.

[ducky fuzz] 05/2/2022 15:58

Hi Stewy .. Will they say "We have received a term sheet from our preferred lender"
or will they go into detail as to what the terms are? Giving us a lot of meat on the bone. DF

[stuart little] 05/2/2022 15:49

They will 100% announce it.

[ducky fuzz] 05/2/2022 15:23

If TOMco get the term sheet do they have to issue an RNS?

If so we should get an RNS the week after next. Although TOMco aren't very good on predicted dates.

Mid February is 14th Feb. DF

[rmart] 05/2/2022 13:57

lots of new posters on the tom thread at lse. Nice to see more and more people taking an interest.

[lopodop] 05/2/2022 13:21

DAMAC
Shouldn't important news be released via the front door?

[chadwick123] 05/2/2022 13:01

Not bad progress for a one man band, bringing Zac on board was a master stroke, but for me it’s the relationship with Mr Byle that’s making the difference, he wants this more than anyone, for obvious reasons, exciting times.

[ducky fuzz] 05/2/2022 13:01

Will the term sheet make any difference to our share price?

I have my doubts as to whether it will. There will be subject to and there can be no guarantee etc.

Of course the funding when it arrives will be positive. DF

[damac] 05/2/2022 12:45

I agree with Fishy in that for John to mention what he did re funding, it must have been cleared by the nomad as it is significant news and confirmation that Greenfield are at a very advanced stage with potential funders. We are now at business end of things, where project defining news could drop very soon.

[stuart little] 05/2/2022 12:44

Either way we now have knowledge of engagement with "a couple of funders". That's potentially very significant.

[the diddymen] 05/2/2022 12:40

I understood term sheet to be heads of terms. Once you have heads of terms that is the point at which the financier has fixed terms to evaluate. For TOM it is a step forward to have engaged, but the critical aspect will be the terms that TOM can extract. This could of course be a blunt 'no'.

[stuart little] 05/2/2022 12:19

Thank you for taking the time. To quote that the funders are within weeks of a term sheet is very bullish though. Tells me that in principle things are moving along with a funder, ie they have measured the risk and happy to quote! I'd also expect terms to have been broadly, even in detail, discussed early in the process. It's approaching an interesting crossroads! Risk could soon be cut.

[the diddymen] 05/2/2022 12:05

SL, as you will see Reichsmart's post above, I am negative on the project. That is not to say that it will not work, but in my view it is statistically at a very high risk of failure.

The first issue is alignment of interest and risk. One of my criticisms of TOM is that none of the directors have put their hands into their pockets and demonstrated their confidence in the various project that they have pursued. The current risk of failure sits wholely with shareholders, which is what share capital is about.

Whether the ultimate cost is $175m is irrelevant, it is significant and the risk takers are unsecured. If TOM fails to deliver the decision takers will be held personally responsible. Like most mortals they have mortgages to pay and if they fail it hurts. TOM will have to convince the risk takers, and the more organisations involved in the funding, the less chance it will happen.

The financing decision takers will be taking on 95% of the financial risk of failure and they are relying on the team. The team is one man (remember his history ) and then the partners. The financiers will be looking for alignment of interest in all parties; that there are many parties increases risk.

The financiers will also be looking at the technology. I have a bit of experience here and I can tell you that even with proven technologies, the risk of failing to perform as described is high. The quality of the FEED will be critcal here and shareholders can only speculate what that is. I would be putting significant provision in to overcome technical failure.

The above is a pretty basic analysis. You then have to overlay the project with the sector risk, particularly ESG, and market risk - political and economic.

You have to put yourself in the position of the financial executive who is going to sign off the project, and ask why this one is the lowest risk and gives best chance of return.

The quickest way to dersik the project would be to drill the dirty oil and generate a revenue stream, but as I have said before to work it will have been the quickest and easiest transition into the E&P sector ever!

XTR on the breakout now. It is a far simpler business model. To all intents and purposes they have proved the asset. Still a bit of work to substantiate the NPV, and then they have to flog it and Anglo American have the first right of refusal. I would hope that it will be done and dusted this year.

[ajj2003] 05/2/2022 12:03

You would also expect some built in leeway on those timings to allow for unseen circumstances. News may well therefore come sooner than we think although experience tends to err on the side of caution.

[saltydog2017] 05/2/2022 12:02

Fishyneck they'll be your Tom Tom drums I guess?

[rmart] 05/2/2022 11:49

good point FISHYNECK, If that is the case then it should be a very exciting month ahead.

[fishyneck] 05/2/2022 11:21

Having watched the interview again, for me the most significant piece of information is regarding the delivery of the term sheet within 2 weeks and the subsequent funding closure "by Easter". The timescale set by the funders not Tomco. (although experience tells us to allow for some slippage here). In my opinion, and from my experience of the AIM market, that fundamentally important piece of information would have to have been approved by Strands, the nomad. It wasn't an 'off the cuff comment', it was obviously planned. So for Strands to allow John to verbally update the market on timings, on what would be the biggest news in this companies history, they must have been shown evidence to back up the statement. Things are hotting up here...now where's my drum?

[canny lass] 05/2/2022 10:28

The two 18M late trades look like a 'top end' rollover to me and therefore are not buys.

[talais] 04/2/2022 18:08

We must have nearly flipped the placing shares

[talais] 04/2/2022 18:06

X2 18mil late buys