New World Oil and Gas Plc letter of intent signed for second oil and gas concession in Denmark
Thursday, January 12, 2012
- New World Oil and Gas has signed a non-binding Letter of Intent granting the Company a 90-day exclusivity period in which to undertake due diligence and complete a Competent Person's Report ('CPR').
- This Licence is in addition to the Danica Jutland Project that includes Licences No. 1/09 and 2/09.
New World Oil and Gas Plc, a company focussed on making investments in the oil and gas sector, has signed a non-binding Letter of Intent ('the LOI') with Danica Resources ApS, granting the Company a 90-day exclusivity period in which to undertake due diligence and complete a Competent Person's Report ('CPR') on a 6,400 sq km oil and gas concession, Licence No. 1/08 (the 'Licence'), located in the productive Western Baltic region of the South Permian Basin of Denmark. This Licence is in addition to the Danica Jutland Project that includes Licences No. 1/09 and 2/09.
- Licence No. 1/08, located onshore/offshore on the northern flank of the productive South Permian Basin in Southern Denmark
- Letter of Opinion from Mark Roach, Independent Petroleum Engineer, evaluates the general prospectivity of the acreage and specifically the Als prospect located in the far west of the Licence, which has two targets:
- Zechstein - Probability of Geologic Success rated to be 1 in 8
- Rotliegendes - Probability of Geologic Success rated to be 1 in 9
- Mark Roach reports the following recoverable volumetric ranges for the Als prospect:
- Zechstein: P50: 97 MM bbls
- Rotliegendes: P50: 1.401 TCF
- Mark Roach reports the following indicative success case Net Present Value (NPV10):
- Zechstein: P50 US$1.039 billion
- Rotleigendes: P50 US$1.401 billion
- Mark Roach reports the Als Prospect is drillable from an onshore location on the coast of Als itself and has two main targets at a depth of 3200m with additional potential in the Triassic
- RPS Energy has been engaged to undertake a CPR to be completed by the end of January 2012
- Upon completion of the CPR and subject to the satisfactory completion of due diligence, it is intended that definitive transaction documents will be agreed in the form of a Farm-out and Joint Operating Agreement which will include:
- New World named first as Operator, and then on the Licence for the concession
- A staged investment in 2-D seismic, initially of US$1.2 million net to the Company which includes a $500,000 payment in cash/shares to the Farmor
- Increases the Company's exposure to the South Permian Basin to 10,507 sq km, an increase of 61%
New World CEO William Kelleher said, 'We are delighted to have been granted the exclusive opportunity to add this highly prospective licence to our growing portfolio of projects. As was the case with the Danica Jutland Project, our first two licences in Denmark, we are fortunate to be dealing with many of the same individuals who are also closely involved in our project in Belize where our Competent Person recently identified two prospects with a combined P50 estimate of 294MMbbl and an Expected Monetary Value of $1.53bn. This group of entrepreneurs, geoscientists and businessmen are highly skilled and have many years of industry experience and I look forward to further strengthening our relationship.
'Today's news is another example of New World delivering on its commitment to identify and secure quality projects that fit the Company's stated investment policy. Licence No. 1/08 meets all our investment criteria: a relatively under-explored concession in an already producing region, located in a stable and investor friendly country that is in close proximity to existing markets where oil and gas are in high demand and command a world oil price. This project will also serve as another attractive asset in our data room for possible participation by interested companies. While this Licence is tremendously exciting, management remain focussed on progressing all our projects to development and look forward to providing the market with further updates in due course.'
Any potential investment by the Company in this concession would be in accordance with its defined investing policy as set out in its Admission Document.
This article is for information and discussion purposes only and does not form a recommendation
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