www.nwoilgas.com
New World Oil and Gas plc ('New World') is an AIM-listed investment company focused on investing in and operating oil and gas assets. The Company's initial focus is in Central America, in particular the Peten Basin, where this prospective formation straddles the Belize and Guatemalan borders, and in Eastern Canada.
New World Oil and Gas to acquire new Danish licence after ‘encouraging’ report
New World Oil and Gas (LON:NEW) is ready to conclude a definitive deal to acquire a stake in the Danica Resources Licence 1/08 following a new competent person's report on the project.
The firm signed an initial letter of intent for the potential acquisition earlier this month. The area spans both onshore and offshore acreage on the northern flank of the productive South Permian Basin in Southern Denmark.
The new report provides significant evidence pointing to the presence of a working hydrocarbon system, chief executive William Kelleher told investors.
"We are highly encouraged by the results of this CPR, which confirms the essential findings of the Petroleum Engineer's report issued on 12 January 2012,” Kelleher said.
“Based on these results, we will immediately proceed to negotiate and finalise the definitive transaction agreements, in the form of a Farm-Out Agreement, as well as an amendment to the underlying Joint Operating Agreement naming New World's Danish subsidiaries as parties and operator.”
The report confirmed that the under-explored area is on trend with several producing oil and gas fields. The report also says there is potential for the licence area to contain reefal build-ups. Such targets are likely to provide excellent reservoirs, should exploration wells prove successful.
The firm’s partner Danica Resources has already identified 22 leads in the area. And one prospect has also been identified. It is called the Als prospect.
Danica believes the Als prospect could share similar properties to producing fields in Germany and Poland. It is thought to contain two reservoir targets, the Zechstein and Rotliegendes.
The Zechstein target is estimated at 97 million barrels of oil (P50), which would give it a net present value of US$1.039 billion. Meanwhile the Rotliegendes target is estimated to have 1.4 trillion cubic feet of gas (P50) and a NPV of US$1.4 billion.
New World believes that both intervals on the Als prospect may be targeted from an onshore location, which means that it could be a 'drill-ready' prospect.
Through its arrangement with Danica, New World will have the option to earn an 80 per cent stake in the project. Initially it would earn a 12.5 per cent interest through the acquisition of 150 kilometres of 2D seismic data.
New World is now planning a 2D seismic programme. This will aim to find robust prospects in the licence area. It also hopes to reduce the Zechstein prospect's geological risk.
Permitting for this work programme is expected to start in April and subsequently New World hopes to have completed the 2D seismic data acquisition by September.
“We anticipate providing regular updates on our operations and results of the seismic interpretation as they become available,” Kelleher added.
"In the meantime, we continue to progress our other highly prospective projects including our Blue Creek project in Belize where we have already identified two prospects with a 1 in 5 probability of geologic success.
“At our Danica Jutland project we remain on course to commence a seismic programme in the second quarter 2012."
This is the group’s second project in Denmark alongside Danica Resources, following a deal for the Jutland project last year. That project covers 4,107 square kilometres in the Jutland on-shore area in South Western Denmark.
The firm’s other asset is the Blue Creek project in the Peten Basin in Belize. There a recent competent persons report assessed two prospects and estimated that they could potentially contain a combined 294 million barrels oil reserve. That would give the project a combined Expected Monetary Value (EMV) of US$1.53 billion in the event of a discovery.
New World may potentially bring in another partner to help take its projects forward. As such it set up a virtual data room earlier this month to give potential partners to the opportunity to evaluate the assets.
This action was taken after New World received a number of unsolicited approaches to participate in the Blue Creek and Danica Jutland projects.
New World said that access to the virtual data room will be limited to qualified interested parties. Additionally potential partners will be screened and they will be required to sign a confidentiality agreement.
