8th May 2014 10:04
LONDON (Alliance News) - New World Oil & Gas Thursday said it has moved a step closer to completing its deal with Niel Petroleum SA, whereby Niel Petroleum plans to invest USD25 million in New World.
The company said Kuwaiti businessman Muaaz Alfahaid, representing Al Maram Trading & Contracting Ltd, will acquire a 20% stake in Niel Petroleum for USD20 million, with the proceeds used for the final subscription payment to New World. Earlier this year, Niel Petroleum made an initial USD4.8 million payment to New World.
In September, Niel Petroleum agreed to invest USD25 million in New World, taking a 75% stake in the oil and gas explorer which operates in Belize and Denmark. Niel Petroleum planned to buy 2.19 billion shares in New World for USD25 million, while also providing a USD25 million debt facility. However, the deal was beset by delays meaning New World was left waiting for a transfer of funds.
New World Oil & Gas said Thursday that is has also signed a deal whereby it will take a 49% equity interest, with 60% economic benefits from net revenues, in Alfahaid's Kuwait-based business, which has the right to participate in drilling and oil production in the country.
"The signing of this framework agreement with Alfahaid should set the stage for New World to become an active player in the Middle East petroleum sector," Chief Executive William Kelleher said in a statement.
"The completion of the Niel subscription will provide adequate financial resources to promptly begin operations in Kuwait and participate in upcoming projects. We feel that this development could be a 'company-maker' and achieve our stated goal of becoming a successful exploration and production company," he added.
New World expects the new arrangements announced Thursday to be completed by the end of July.
New World Oil & Gas was quoted at 0.75 pence Thursday, up 0.20 pence or 36% making it one of the biggest gainers on AIM.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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