TomCo holds a 100% interest in two oil shale leases, comprising five blocks covering 2,919 acres in Uintah County, Utah. Independent natural resources consultants SRK Consultants Ltd has declared a surface mineable JORC compliant Measured Resource of 126 million barrels on the main tract of our Holliday Block lease.

Introduction to oil shale

Oil shale is a general term used to describe those rocks, generally shales, rich enough in organic matter, kerogen, to yield synthetic petroleum products, shale oil and shale oil gas products following heating at temperatures of the order of 385-500°C and in the absence of air, a chemical process termed pyrolysis.

Oil shale deposits are generally considered to be sedimentary in origin and to have formed as a result of the deposition of organic matter in anaerobic conditions in lakes and lagoons and the burial of this accumulated material accompanied by normal diagenetic processes. The compaction of these beds, the removal of water, and the increased temperatures and pressures, the material is subjected to then converts the organic matter to kerogen. These are fundamentally the same processes that are considered to have formed oil deposits, but in the case of oil shale deposits, the depth of burial, and consequently the pressures and temperatures the material has been subjected to, have been less and the process has therefore not been so complete.

Overview of the oil shale industry in the United States

While appraisal of global oil shale is still in its infancy an estimated 2.8 trillion barrels of oil is contained in oil shale worldwide, by far the largest known deposit in the world is the 1.5 trillion barrels of oil Green River Formation in the United States, which occurs in a sparsely populated area covering parts of Colorado, Utah and Wyoming. To put Green River Formation into perspective, worldwide proved oil reserves at the end of 2011 was 1.7 trillion barrels of oil, so bringing it into commercial production would almost double worldwide oil reserves. Accordingly, the Green River Formation has the potential of returning the United States to being a net exporter of oil for the first time since World War II.

Green River formation

The Green River Formation, Utah

Global in-place oil shale reserves

Global in-place oil shale resources

The development of US unconventional resource began in the mid-1800s when natural gas was produced from fractured shales, and oil shale production followed in Colorado in 1917. The fluctuation in commodity prices since the 1970s and the advancement of technology to unlock unconventional resource have been the chief drivers that have dictated the most effective way oil shale can be exploited. A number of the major oil companies, including Total, regard oil shale as a significant component of the future energy mix and they have continued to fund research projects focused principally on the Green River Formation.

In recent years, there has been a shift away from dry gas production and towards liquid-rich shale gas projects as the United States seeks greater energy security for the medium to long term. The commercialisation of the country’s considerable oil shale resource has in turn seen unmatched levels of investment and political attention to license and develop these crucial assets.

An oil shale deposit with economic potential is one that can be recovered using mining or in-situ recovery techniques and with sufficient oil yield. Oil shale deposits that are generally considered economic at current oil prices are close enough to the surface to be mined (open-pit or shallow underground) or extracted using in-situ methods, and have oil yields greater than 40 litres/ton.