New World Oil and Gas announce that Blue Creek Exploration and the Company have agreed to amend the terms of the Farm-Out Agreement entered into between them on 15 June 2011, through the signing of an amendment agreement entered into between New World and BCE on 26 January 2012. Subject to standard regulatory approval, the Amendment will lead to New World being assigned a higher working interest in the Blue Creek Project, Belize, following completion of the seismic programme.
The BCE FOA relates to the 420 sq km Blue Creek Project in the Petén Basin in Northwest Belize with current estimated gross P50 volumetrics of 294MMbbl and a combined Expected Monetary Value (EMV10) of $1.51bn. New World is the operator of the Project and currently has a 12.5% working interest with the option to raise this to 100% upon the completion of a staged work in programme. The Company has completed phase one and two of a planned three phase 2-D seismic acquisition programme, with a total of 139.15 line kilometres acquired to date at a cost of US$2,125,000.
Key elements of the Amendment
As a result of today's amendment agreement, upon the acquisition and submission for processing of an additional 61 km lines of 2-D seismic by Q2 2012 at an estimated cost of US$858,000 BCE shall transfer a further 10% working interest in the Blue Creek PSA to New World. As such, once the seismic acquisition programme has been completed, under the Amendment, the Company will have acquired a 35% working interest in the Blue Creek PSA as opposed to the 25% working interest envisaged under the previous BCE FOA.
Amended terms of the Farm-in Programme are as follows:
- Upon the acquisition of 45 line km of 2-D seismic data over the Project BCE assigns 12.5% of its rights under the PSA to the Company's wholly-owned subsidiary New World Oil and Gas (Belize) Ltd ('NW Belize') (assigned)
- Upon the acquisition of an additional 125 line km of 2-D seismic data over the Project, BCE must transfer and assign a further 12.5% of its rights under the PSA to NW Belize (completed, yet to be assigned)
- Upon the acquisition of an additional 61 line km of 2-D seismic data over the Project, BCE must transfer and assign a further 10% of its rights under the PSA to NW Belize
- Upon the drilling and completion of the first well through the Jurassic, BCE must transfer and assign a further 32.5% of its rights under the PSA to NW Belize
- Upon the drilling and completion of the second well through the Jurassic, BCE must transfer and assign the remaining 32.5% of its rights under the PSA to NW Belize
New World CEO William Kelleher said, 'We are delighted with the amendment to the FOA, as it delivers New World an additional 10% working interest in the Blue Creek PSA in return for additional seismic work that will be applied towards further high-grading our prospects. As a result, before we elect whether to proceed to the drilling phase, we will have earned a 35% interest in the highly prospective Blue Creek Project.
'We are also highly encouraged by the decision of our seismic contractor to accept New World shares in payment for the major portion of the extra 61 line kilometres of 2-D seismic, a vote of confidence in Blue Creek's prospectivity. The Company expects this new seismic work to be completed by the end of Q1 2012 and following processing and interpretation, we expect to update the Blue Creek Competent Person's Report.'
The information contained in this announcement has been reviewed and approved by William Kelleher, who is a competent person as defined under the AIM rules for oil and mining companies, on behalf of New World. Mr. Kelleher has 32 years of relevant experience in the oil industry and has been a member of the Society of Petroleum Engineers for 28 years.
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