Final Results

New World Oil and Gas Plc / Index: AIM / Epic: NEW / Sector: Oil & Gas

21 May 2012

New World Oil and Gas Plc ('New World' or 'the Company')

Final Audited Results

and

Adoption of Long Term Incentive Plan

FINAL AUDITED RESULTS

New World Oil and Gas Plc, a company focussed on making investments in the oil and gas sector, announces its final audited results for the year ended 31 December 2011.

Highlights

·; Exceeded objectives set out in AIM admission document by investing in and progressing two highly prospective oil and gas projects within months of listing and recently completing a third in proven hydrocarbon regions

·; Blue Creek Project in Belize with aggregated unrisked prospective P50 resources of 294 million barrels of oil ('MMbbls') with an estimated gross combined P50 unrisked NPV10 of US$7.1 billion

·; Two Projects in Denmark - one with estimated P50 gross resources unrisked recoverable volume of 1.4 trillion cubic feet of gas ('TCF') and 97 MMbbls

·; Data room established with RPS Energy following receipt of interest from within the sector to Farm-in to New World's projects

·; Highly experienced management and exploration team leading development and unlocking value across portfolio

Chairman's Statement

The year under review has been one of outstanding progress for your Company at both an operational and a corporate level. Twelve months ago, New World was an unquoted Company screening multiple oil and gas investment opportunities across the globe. A year later, the Company is listed on AIM and has been named operator, through its subsidiaries, of three highly prospective oil and gas licences in proven hydrocarbon regions.

It is important to note that the year did not just involve identifying and investing in projects. Once each project was secured, we immediately embarked upon a thorough and comprehensive exploration programme to identify and quantify their potential in terms of both resource and value. This exploration programme, combined with our Q1 2012 fundraising, provides us with the option of drilling a first well in 2012 on our most advanced project, Blue Creek, located in the productive Petén Basin in North West Belize. Here we have identified five prospects, two of which are drill ready and have aggregated unrisked prospective P50 gross resources of 294MMbbls, with an estimated combined P50 unrisked NPV10 of US$7.1 billion. 

New World was incorporated in April 2010, a time of positive long-term oil price fundamentals, underpinned by favourable supply/demand dynamics. The Directors recognised that there was an opportunity to create substantial value by utilising their collective experience to identify, acquire and operate world class oil and gas assets that satisfied the following criteria: primarily mid-to-late stage exploration and exploitation projects that are underperforming, undeveloped and/or undervalued. During the 12 months leading up to our listing on AIM in May 2011, we reviewed and screened some 70 projects worldwide. We narrowed down our search to projects in basins with significant, proven oil and gas reserves, located in politically stable countries, close to major markets to minimize transportation costs and where our production could command world prices. Additionally, the Company only considered assets where we would be named as operator with the ability to earn a majority working interest. All of the investments made during the year satisfied these criteria and we are very pleased with our progress over the period, having exceeded the objectives set out in our Admission Document by securing three exciting projects in such a short period of time. 

We are delighted with the progress made at our flagship project, Blue Creek in North West Belize, and we have fast-tracked its development, following the highly positive results of the seismic acquired to date. We are currently in the process of acquiring additional seismic. We feel that the potential of Blue Creek may be significant, in that it lies in close proximity to and displays structural similarity to the recently discovered and producing Spanish Lookout and Never Delay Fields, each with reported reserves of approximately 25MMbbls.

Additionally we have completed the first phase of seismic acquisition on our second project, the Danica Jutland Licences in Denmark, to better define hydrocarbon resources and upside value potential. We expect to announce an updated Competent Person's Report ('CPR') from RPS Energy in H2 2012. The Danica Jutland Licences cover 1.015 million acres, and contain two identified Triassic leads and eight Zechstein leads.

RPS Energy has indicated that the planned acquisition of seismic and the identification of robust structures could result in a probability of geologic success of 1 in 8 for the Zechstein leads and 1 in 5 for the Triassic leads. Needless to say, we are also very excited by this project and look forward to updating shareholders on our progress as we continue the de-risking process.

Towards the end of 2011, we identified a third project in Denmark. The Danica Resources Project included the Als prospect, described as close to drillable by RPS Energy, with estimated P50 gross resources unrisked recoverable volume of 1.4 TCF of recoverable gas, 97 MMbbls of recoverable oil, potentially reservoired in two independent intervals (one most likely oil and one most likely gas) that can reasonably be tested by a single well trajectory, with a gross potential value of US$2.4 billion. A Farm-Out Agreement has been signed, naming a subsidiary of New World as operator. Upon the completion of a mutually agreed seismic and drilling programme, the Company will have the opportunity of earning into an 80% participating interest.

In December 2011, in response to multiple approaches from oil and gas companies interested in potentially farming into our projects, we opened a virtual data room under the supervision of RPS Energy. Since year-end, several companies have reviewed our data and we look forward to updating the market on future outside participation in due course. Encouraged by this display of interest, the decision was taken to embark on a fundraising post-period end, to primarily solidify our funding options and also strengthen our position in negotiations with potential farm-in partners. I was delighted with the tremendous response we received from institutional investors. The US$13.4 million raised clearly indicates that they share our enthusiasm and have faith in our portfolio of assets and management.

Since inception, the Company's overall strategy has been designed to maximise the level of prospectivity in each acquired asset right up to the point of drilling whilst minimising shareholder dilution. As part of this strategy, we continually strive to keep corporate overheads and administrative expenses low, thereby retaining as much of our funds as possible for use in identifying and proving up reserves. Many of our geologic, geophysical and seismic contractors and advisors have aided us in these efforts by electing to take a large portion of their fees in New World shares, further displaying their confidence in our projects.

In addition to our acquired assets, we currently maintain a pipeline of potential projects, focusing on West and Central Africa and South East Asia where the Board has extensive experience and contacts. As the last twelve months have shown, our team has a proven track record in creating shareholder value. It is highly experienced in acquiring, exploring and developing oil and gas projects worldwide. Further, our technical team is world-class and, as a result, I am confident our combined skill sets will enable us to successfully achieve our objectives and our overall mission, to build a significant oil and gas company in the shortest time period possible. I am truly excited about the potential of New World and I expect us to make considerable progress in 2012.

As a mark of our progress since our AIM Admission we will be holding an investor presentation this summer in London where I look forward to updating shareholders and potential investors on our projects as well as holding a Q&A session. Further information regarding the event will be released in due course. To register your interest and to receive further updates, please contact [email protected].

Finally, I would like to thank my fellow Directors and our team and advisors for their hard work and dedication over the last twelve months. A remarkable amount has been achieved in a short period of time and I look forward to us working together in the year ahead, as we look to build on our impressive start as a publicly listed company. The Directors, our team, and I would also like to thank our shareholders for their active and unwavering support over the past year.

William Kelleher

Chairman

14 May 2012

Operations Report

The Blue Creek Project, Belize

Blue Creek is our flagship and most advanced project. It comprises 420 sq km of onshore prospective acreage in the proven and producing Petén Basin in North West Belize. The Board identified Central America as having significant opportunities as the area met our investment criteria, particularly the Petén Basin in Belize, located beneath the Yucatan Peninsula. To date, Pemex, the national oil company of Mexico, as well as other companies operating in Guatemala and Belize have booked world class volumes of proven oil reserves. Belize currently exports all its oil production to the Gulf Coast of the US and other Caribbean ports, with buyers currently paying WTI for Belizean oil. 

The project is made up of two oil concessions, Blue Creek and Blue Creek South, consolidated under a single Production Sharing Agreement ('PSA') with the Belizean government. Within 34 days of listing on AIM in May 2011, we completed a Farm-Out Agreement to acquire, based on various election points, up to a 100% participating interest in the PSA from Blue Creek Exploration Ltd. The Farm-Out Agreement calls for the completion of a staged earn-in programme consisting of acquiring 2-D seismic and the drilling of two wells through the Jurassic. Our partner, Blue Creek Exploration Ltd, will revert to a 5% overriding royalty interest upon our having earned the full 100% participating interest. One of our wholly owned subsidiaries in Belize has also been named as operator of the project and has now been assigned a 12.5% participating interest in the PSA as described below. 

By the end of 2011, we had acquired a total of 154 sq km of 2-D seismic, and received three Competent Person's Report updates from RPS Energy. This resulted in the re-classification of four initial leads into five prospects and one lead and a reduction of the geologic risk of such prospects from 1 in 12 to 1 in 5, a 60% reduction. On completing this work, the Company has also been assigned its first 12.5% participating interest in the PSA. We increased the number of phases of seismic from two to three, by increasing the seismic data density by 61 line km to a total 231km, and phase three of the programme is nearing completion. The purpose of the additional seismic was to further reduce the geological risk prior to drilling. This approach will help maximize our chances of making a discovery. 

Finally, the third CPR completed in early December by RPS Energy identified 294 MMbbls of P50 gross unrisked prospective recoverable resources from just two of the four prospective reservoirs in dolomite sequences in the upper to middle Cretaceous. These two prospects, Prospect "A" and "B-Crest", are drill ready. The gross unrisked NPV10 for the 294 MMbbls P50 volumes is US$7.1 billion. These impressive numbers have resulted in a number of unsolicited approaches from investors and companies, including majors, wishing to take part in our project. We have responded by setting up a virtual data room under the supervision of RPS Energy.

Danica Jutland Project, Denmark

Our second project, Danica Jutland, is located onshore in the Jutland region of Western Denmark, and a Letter of Intent was announced 64 days after our admission to AIM in May 2011. The Project consists of two licences, 1/09 and 2/09, and covers just over 1.015 million acres of highly prospective territory in both the Zechstein carbonates and Triassic sandstone intervals.

The project is through Farm-Out Agreements between one of the Company's Danish subsidiaries and our partner, Danica Jutland ApS that holds an 80% participating interest in each licence. The Danish North Sea Fund ('NSF') holds the remaining 20% participating interest in each licence and is a full paying partner. The Farm-Out Agreements between Danica Jutland ApS and the Company's subsidiary in Denmark call for the completion of two phases of a 2-D and/or 3-D seismic acquisition programme, followed by drilling to the base of the Zechstein. The completion of this work will earn New World up to 80% participating interest and our partner, Danica Jutland ApS, will revert to a 5% overriding royalty interest. An amendment has been made to the Joint Operating Agreements between Danica Jutland ApS and NSF naming New World Operations ApS as operator of both licences.

A CPR has been completed for both licences and it identified eight leads in the Zechstein and two leads in the Triassic. Clearly, more seismic needs to be carried out on both the Zechstein and the Triassic leads, but we are highly encouraged that the probability of geologic success in the Triassic has been independently assessed as being relatively high based only on reprocessed existing seismic data. We have now completed the first phase of seismic operations and expect to report significant progress in the first half of 2012 with regards to further de-risking both the Triassic and the Zechstein, as well as reporting resources and indicative values in the Triassic. The completion of this first phase of the seismic acquisition programme will earn New World a 12.5% participating interest in the licences, which we expect to announce on formal approval from the Danish Government in due course

Danica Resources Project, Denmark

On 23 December 2011, the Company signed a Letter of Intent with Danica Resources ApS, in relation to a potential Farm-Out Agreement on their Licence 1/08, covering 1.67 million acres of highly prospective territory in the Baltic Region of Southeast Denmark. The Company requested RPS Energy, in its capacity as a Competent Person, to generate a Letter of Opinion on the block. Their report identified a seismic based prospect having close to drillable status, known as the "Als prospect" with gross estimated P50 resources of unrisked recoverable volume of 1.4 TCF of recoverable gas and 97 MMbbls of recoverable oil, potentially reservoired in two independent intervals (one most likely oil and one most likely gas) that can reasonably be tested by a single well trajectory. On a net basis attributable to the Company, this has a potential unrisked NPV10 P50 value of US$2.4 billion. Post period end, in April 2012, we announced the signing of a Farm-Out Agreement. Upon the completion of a staged seismic acquisition programme and the drilling of one well, we will have the opportunity of earning into a 80% interest in Licence 1/08.

Group Statement of Comprehensive Income for the year ended 31 December 2011

Group Statement of Financial Position as at 31 December 2011

Company Statement of Financial Position as at 31 December 2011

Group Statement of Cash Flows for the year ended 31 December 2011

Company Statement of Cash Flows for the year ended 31 December 2011

Statement of Changes in Equity for the year ended 31 December 2011 - Group and Company

Notes to the financial statements for the year ended 31 December 2011

On incorporation, the Company had an authorised share capital of £1,500,000 divided into 1,000,000,000 ordinary shares of £0.0015 each, of which 2 were issued, fully paid, to the subscribers to the memorandum of association of the Company.

On 15 April 2010, one subscriber share was transferred to Hydrocarbon Technologies Limited and one subscriber share was transferred to Peter Sztyk (Peter Sztyk then transferred the subscriber share to The Black Sea and Caspian Trust on 4 May 2010), and the number of shares issued and fully paid was increased from 2 ordinary shares to 37,500,000 ordinary shares by the issue of a further 37,499,998 ordinary shares to the founder Shareholders at a price of £0.004 per share so that their shareholdings comprised 23,000,000 ordinary shares held by The Black Sea and Caspian Trust, 11,500,000 ordinary shares held by Hydrocarbon Technologies Limited and 3,000,000 ordinary shares held by Simon King.

On 17 November 2010, the number of shares issued and fully paid was increased from 37,500,000 ordinary shares to 38,100,000 ordinary shares by the issue of a further 600,000 ordinary shares to Stephen Polakoff.

On 6 April 2011 the founder shareholders capitalised a further £22,600 of expenses in total in respect of their holdings of 37,500,000 ordinary shares.

Between 26 April and 4 May 2011:

(a) the share capital was converted to no par value and consolidated on the basis of 28 Ordinary Shares for every 100 existing ordinary shares;

(b) the Company converted loans of US$ 310,000 (at an agreed conversion rate of US $1/£0.625, giving loans of £193,750) into 3,875,000 new Ordinary Shares at a price of 5p per share; and

(c) entered into agreements to issue a total of 18,600,000 Warrants to subscribe for Ordinary Shares at 5p per share with an expiry date of 11 May 2016.

resulting in an authorised share capital divided into 280,000,000 Ordinary Shares of no par value, of which 14,543,000 were in issue, plus a total of 18,600,000 Warrants.

On Admission to AIM on 11 May 2011 the Company:

(a) issued 60,000,000 Ordinary Shares for cash at £0.05 per share;

(b) issued 660,000 Ordinary Shares to advisers at £0.05 per share; and

(c) issued 74,543,000 Warrants to subscribe for Ordinary Shares at 10p per share with an expiry date of 11 May 2014.

On 27 May 2011: issued 525,000 ordinary shares at 5p per share in settlement of professional fees.

On 28 June 2011:

(a) issued 943,841 ordinary shares at 6.5p per share in agreed partial payment of historical costs in relation to the Blue Creek Project, Belize;

(b) issued 641,815 ordinary shares at 6.5p per share and 455,840 ordinary shares at 6.75p per share as agreed part payment of services provided by consultants on the seismic programme in relation to the Blue Creek Concession, Belize; and

(c) issued 250,000 ordinary shares at 5p per share together with 250,000 warrants to subscribe for shares at 10p per share expiring on 28 June 2014 for consultancy services further to the Agreement with First Meadows Limited to source oil and gas projects.

On 6 July 2011 issued 50,000,000 ordinary shares for cash at 6p in a Placing to raise £3 million before expenses together with 3,000,000 warrants to subscribe for shares at 6p per share expiring on 6 July 2016 as part of the fees under the Placing arrangements.

On 6 July 2011 issued 148,423 ordinary shares at 6.7375p in settlement of professional fees.

In the period from 30 September 2011 to 30 December 2011 issued 4,121,950 ordinary shares at an average price of 6.1p per share in settlement of professional fees and other transactional obligations entered into over the preceding six months.

13 Outstanding warrants

As at 31 December 2011 the number of outstanding warrants were:-

- 18,600,000 warrants exercisable at 5p with an expiry date of 11 May 2016;

- 74,543,000 warrants exercisable at 10p with an expiry date of 11 May 2014;

- 250,000 warrants exercisable at 10p with an expiry date of 28 June 2014;

- 3,000,000 warrants exercisable at 6p with an expiry date of 6 July 2016.

LONG TERM INCENTIVE PLAN ("LTIP")

Based upon the recommendation of the Company's Remuneration Committee, the Company's Board of Directors has approved the adoption of a LTIP with a commencement date of 15 May 2012 which provides for a share allocation to certain management after a period of three years' duration to be triggered by the date of announcement of the Company's 2014 annual financial results equal to 15% of the increase in shareholder value over an initial value of 8p (being the price of the most recent placing in March 2012), above a hurdle rate of 5% per annum, as adjusted for any further capital raisings or distributions. William Kelleher, Georges Sztyk and Peter Sztyk (through their service companies) shall each have a 30% participation in the LTIP and Stephen Polakoff shall have a 10% participation in the LTIP. The adoption of the LTIP is a related party transaction under the AIM Rules and the Company's independent Non-executive Directors, Fred Hodder, and Chris Einchcomb, having taken third party advice from an independent remuneration and incentive consultancy and having consulted with the Company's Nominated Adviser, consider that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

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For further information please visit www.nwoilgas.com or contact:

Glossary:

"bn" means Billion

"EMV" means Expected Monetary Value

"EMV(10)" means Expected Monetary Value using an annual discount on cashflow of 10% per annum

"km" means kilometres

"MMbbls" means millions of barrels (oil)

"NPV10" means Net Present Value using an annual discount on cashflow of 10% per annum

"P50" means a 50% probability of quantities recovered equalling or exceeding the estimate

"sqkm" means square kilometre

"TCF" means trillion cubic feet

"WTI" means West Texas Intermediate