TXO gains on Morgan Oil Marine contract wins

TXO advanced Friday after the Texan oil company announced two contract wins from a wholly-owned subsidiary of Grand Bahama Group (GBG).

TXO advanced Friday after the Texan oil company announced two contract wins from a wholly-owned subsidiary of Grand Bahama Group (GBG).

Shares rose 10% as TXO said GBG business Morgan Oil Marine struck two five-year deals with major shipping agents in the Caribbean nation - Freeport Ship Services and Elnet Maritime Agency.

The contracts give Morgan exclusive rights to collect and reprocess used lubricating oils, heavy fuel oil washings, contaminated fuels, tank residues, sludges, emulsions, oil interceptors and ships effluent from the agents' ship owning customers.

TXO, which owns just under 24% of GBG, will be in a position to start collecting the used oils and ships slops once the newly commissioned one million gallon Barge Martha becomes operational on January 21st.

The recovered oil will then be offloaded and stored securely, pending completion of the hydrocarbon recovery plant (HRP), which will be funded by revenues generated from the collection charges and the sale of new lubricants.

Used oils will be reprocessed and sold as reprocessed fuel oil once the HRP is complete.

Tim Baldwin, Chairman of TXO, said: "We are delighted with the progress of GBG and are in the process of negotiating a new and revised investment and option agreement, so that we may invest further monies and increase our equity holding.

"GBG helps balance our portfolio of assets as we consider it a low risk, sustainable and cash generative business. These two contracts are an early indication of what we can expect and should help to provide TXO shareholders with an excellent return on their investment."

RD

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