Last week, the stock took a pounding, down as much as 45% as investors reacted to the news the Blue Creek 2A ST well in Belize had been plugged and abandoned due to insufficient quantities of moveable hydrocarbons.
In a conference call with investors today, chief executive Bill Kelleher stressed that the well confirmed his belief of an active hydrocarbon system, while live oil shows were measured in the Y3 and Hillbank formations.
“Although we are disappointed with the results we have confirmed that there is a working hydrocarbon system in Blue Creek and the West Gallon Jug licence blocks,” said Kelleher.
The chief executive had said that it is only a matter of time before the company locates a trap of significant size in north-west Belize, which he believes is the key element for success there.
“Trap development and timing of trap formation relative to the timing of oil migration remains an open issue and will remain an open issue until we drill the well,” he told investors today.
“We’re very, very excited about this location [Belize] as it offers another solution to trapping oil. If everything works out, this could lead to a sizeable accumulation.
“Belize has taught us very much and we’re very excited about moving closer to resolving the existence of traps and making an oil discovery there.
“There is tremendous exposure to upside and with us earning in to 100% working interest, it brings us one step closer to adding material value to the company for our shareholders.”
Seymour Pierce analyst Sam Wahab said that the institutions that bought into New World did so primarily to gain exposure to the Danish assets and for them Belize represents additional upside.
Kelleher underlined this by saying that any one of the three Danish prospects could prove to be a “company-maker”.
He confirmed that a 75-kilometre 3D seismic survey has been completed on Danica Jutland 109 that will give the company a better understanding of what is under the surface. The quality of the data looks “extremely high” at this point, according to Kelleher.
The interpretation of this data will be completed in the second quarter of this year.
Kelleher added that several companies have expressed an interest in teaming up with New World on its Danish licences.
One company in particular has shown a keen interest in all the Danish licences, he said. The name of the company was not revealed but Kelleher said it was a “well-funded, experienced and confident oil and gas group”.
The group has indicated that should it decide to become New World’s partner there, it would like to participate up to a level of 20%.