TomCo Energy - Crosby's Next Multibagger!

Edgein - 26 Dec'06 - 14:33 - 2491 of 2499


There seems to be a lot of confusion here over this listing. Skiboy10 suggested on the EME thread that I should have a look at these. NCS had about 150m shares in issue before this reversal and very little else. It is true that managment are using NCS as a cheap way of listing TomCo on AIM and why not, NCS holders should be celebrating that they have been able to get TomCo as an alternative to going bust. NCS will still exist under the new name, in addition to the 150m odd NCS shares there were 200m news shares issued to gain control and 50 odd million to raise cash for the enlarged group. Total of 400m odd shares and £10m market cap if the group trades at 2.5p. The managment have set their fair value on TomCo at £5m or 2.5p per share. It isn't really that safe to assume that the market will agree. Just because the TomCo had a value much greater than NCS it had to be considered under AIM rules as a reversal into NCS rather than a merger.

It may have speculative value if you think the managment of TomCo can bring in other small drillable or production assets that can be exploited in the short-term. £1m odd in cash isn't a lot to play with. Someone posted some nonsense that TomCo are going to be better off because they don't have to drill wells and can surface mine oil shale. The reason that oil shale isn't big business at the moment in Northern USA and Canada is the fact that the economics are so poor. It can cost up to $30 to extract oil from oil shale per barrel, when compared to light oil lifting costs in the north sea as low as $3-4/bbl on some new fields, you can clearly see the difference in economics of these finds. Oil shale will be long-term, way more long term than the average AIM private investor can handle.

It is likely that TomCo will have something to offer investors in terms of acquisition fairly quickly. If I were a TomCo holder I would want to see the first deal within 2-3 months of listing to show that the management have some sort of direction. Personally at this point I have no intention of becoming an NCS of TomCo holder until they are more advanced. At £10m (if they sustain 2.5p per share for the enlarged group I see better value elsewhere) e.g. A small canadian company on the TSX-V market cap C$12m (£6m) approximately C$6m in cash and drilling 3 wells early in the new year (400boepd undeveloped shut-in). There is also a list of other AIMers that represent better value. If Tomco get a good deal they may look cheap at £10m, but there is no such thing as easy money here as some are suggesting.

Regards,
Ed.