First Day of Dealings on AIM

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

11 May 2011

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

First Day of Dealings on AIM

New World Oil and Gas Plc, a company focussed on acquiring interests in oil and gas assets, is today being admitted to trading on AIM (the 'Admission'). The Company has raised £3 million before expenses by way of a placing of 60,000,000 new Ordinary Shares at 5 pence per share (the 'Placing'), giving it a market capitalisation of approximately £3.8 million on Admission. The money raised will be used to identify and acquire exploration or development projects in the oil and gas sector with an initial focus on Central America and Eastern Canada. Shore Capital Stockbrokers Limited ('SCS') is Broker to the Company and Beaumont Cornish Limited is the Company's Nominated Adviser.

Warrants being issued to investors in the Placing will be in certified form and will be despatched within the next 14 days.

Overview

·; Listed on AIM having raised £3 million before expenses

·; Incorporated to take advantage of the Director's belief that there is increasing global pressure to exploit new oil and gas reserves

·; Defined investment strategy focussed on acquiring interests in oil and gas companies that are, in the opinion of the Directors, underperforming, undeveloped and/or undervalued, according to stringent investment criteria

·; Exploration, development and pre-production projects currently being evaluated, which the Directors believe will provide value uplift through development as well as cashflow

·; Focus on early cashflow from assets acquired - pipeline of projects and potential investments - assessing various projects in South and Central America and Eastern Canada

·; Highly experienced board with over 70 years of combined experience in the overseas oil and gas industry and in evaluating acquisition and investment prospects within that industry

New World CEO William Kelleher said, "The Directors believe that New World offers a fantastic opportunity to participate in potentially lucrative exploration and production projects in the oil and gas sector. Having successfully raised £3 million from new investors upon our admission to trading on AIM, we believe that New World is now well placed to carry out its strategy to acquire oil and gas projects where we believe there to be a number of significant opportunities.

"The Directors have already assessed a number of projects in Belize, with a particular focus on the extension of the productive Peten Basin, which the Directors believe to be a prolific oil and gas region with extensive volumes of proven oil and gas reserves. Other projects currently undergoing evaluation include assets in South America, Eastern Canada and Europe.

"Our board has a track record of delivering value to shareholders with certain Directors having been involved in various quoted and private oil and gas companies worldwide. I believe New World is in a strong position to take advantage of the rising global energy needs through the acquisition and development of assets, which are, in the opinion of the Directors, under-performing, undeveloped or undervalued, based upon stringent investment criteria, with a view to building a significant oil and gas exploration and production company. I look forward to updating shareholders on our progress in due course."

Further information on the Company (including a copy of the Company's AIM Admission Document) as required under AIM Rule 26 is available at: www.nwoilgas.com

Further Information

Introduction

New World Oil and Gas was incorporated in 2010 to make investments in the oil and gas sector.

The Directors have between them many years of experience in the overseas oil and gas industry and extensive experience in evaluating acquisition and investment prospects within that industry, both quoted and unquoted.

The Directors will seek to identify investments which are, in the opinion of the Directors, under-performing, undeveloped and/or undervalued, and where the Directors believe that their expertise and experience can be deployed to facilitate growth or unlock value.

The Directors intend initially to focus on Central America and Eastern Canada where the Directors believe that a number of opportunities exist to acquire interests in suitable projects. Whilst it is likely that the investments will be made in exploration or development stage undertakings, the Directors may decide that the Company should invest in producing assets.

The Directors believe that there appears to be an increasing global pressure to identify new reserves and resources, and this pressure, taken together with an assessment of the current and longer term macroeconomic environment, leads them to believe that this is the right time to set up a new corporate vehicle focused on investments in the oil and gas sector.

The Directors believe that the Company will offer investors an exciting opportunity to participate in the opportunities in the oil and gas sector.

Investing Policy

The proposed investments to be made by the Company may be either quoted or unquoted; made by direct acquisition or through farm-ins; may be in companies, partnerships, joint ventures; or direct interests in oil and gas projects. It is not intended to invest or trade in physical commodities except where such physical commodities form part of a producing asset. The Company's equity interest in a proposed investment may range from a minority position to 100 per cent. ownership.

The Directors intend initially to focus on Central America and Eastern Canada where the Directors believe that a number of opportunities exist to acquire interests in suitable projects. A particular consideration will be to identify investments which are, in the opinion of the Directors, under-performing, undeveloped and/or undervalued, and where the Directors believe that their expertise and experience can be deployed to facilitate growth or unlock inherent value. The Directors will conduct initial due diligence appraisals of potential projects and, where they believe further investigation is warranted, intend to appoint appropriately qualified persons to assist. The Directors believe they have a broad range of contacts through which they are aware of various opportunities which may prove suitable, although at this point only preliminary due diligence has been undertaken. The Directors believe their expertise will enable them to determine quickly which opportunities could be viable and to progress quickly to formal due diligence.

The Company proposes to carry out a comprehensive and thorough project review process in which all material aspects of a potential project will be subject to rigorous due diligence, as appropriate.

It is likely that a substantial portion of the Company's financial resources will be invested in a small number of propositions or in just one investment which may be deemed to be a reverse takeover under the AIM Rules. Where this is the case, the Directors intend to mitigate risk by appropriate due diligence and transaction analysis. Any transaction constituting a reverse takeover under the AIM Rules will also require Shareholder approval. The Directors have not, however, excluded the possibility of building a broad portfolio of assets.

Investments in early stage and exploration assets are expected to be mainly in the form of equity, with debt being raised later to fund the development of such assets. Investments in later stage assets are more likely to include an element of debt to equity gearing. Where the Company builds a portfolio of related assets it is possible that there may be cross holdings between such assets.

The Company intends to be an involved and active investor. Accordingly, where necessary, the Company may seek participation in the management or board of directors of an entity in which the Company invests with a view to improving the performance and use of its assets in such ways as should result in an upward re-rating of the value of those assets.

Given the time frame the Directors believe is required to fully maximise the value of an exploration project or early stage development assets, it is expected that the investment will be held for the medium to long term, although short term disposal of assets cannot be ruled out in exceptional circumstances.

The Company intends to deliver shareholder returns principally through capital growth rather than capital distribution via dividends, although it may become appropriate to distribute funds to Shareholders once the investment portfolio matures and production revenues are established. In the first few years the Company will seek to ensure that its investments move the value chain from exploration to development and production and to turn around underperforming, undeveloped and/or undervalued assets. If successful, the increase in value should be reflected by an increase in the Company's share price.

The Directors believe that the Investing Policy of the Company can substantially be implemented within eighteen months of Admission. If this is not the case, the Company will seek the consent of its Shareholders for its Investing Policy or any changes thereto at its annual general meeting immediately following and on an annual basis thereafter until such time that its Investing Policy has substantially been implemented. If it appears unlikely that the Company's Investing Policy can be implemented at any time, the Directors may consider returning remaining funds to the Shareholders.

Given the nature of the Company's Investing Policy, the Company does not intend to make regular periodic disclosures or calculations of net asset value.

The Directors consider that as investments are made, and new promising investment opportunities arise, further funding of the Company will be required.

Background to identification of potential projects

Since incorporation (on 15 April 2010), the founding Directors of the Company have been actively engaged in identifying potential projects. This activity has involved travel to meet with potential partners, and has not only seen assessments of projects in Central America and Eastern Canada, where the Company initially intends to focus, but also, and for consideration in the longer term, in Europe, South America and the Middle East. 

A number of preliminary due diligence exercises have been undertaken to qualify individual prospects for further consideration, including consultation with professional advisors. The pipeline of possible projects developed by the Company is a direct result of these efforts.

All possible projects are subject to specific screening criteria. Such projects should be located in regions with prolific oil and gas basins with extensive volumes of proven oil and gas reserves, which the Directors believe will have a high potential of success, at low geologic relative risk, in making new oil and gas discoveries. In addition, projects are mainly to be considered where there are large amounts of seismic data available which show direct hydrocarbons indicators; such available data can be either historic or current, and, as part of the screening process, it is highly likely that, for the project to be progressed, adjacent blocks to the project area will show strong seismic analogues.

Screening criteria will also incorporate an assessment of the potential role of the Company, and the outcome of the investment: focusing on oil projects, whilst the Company will consider both exploration and development scenarios, it will seek to be named as the operator, to have identified early cash flow opportunities, to utilise its technical expertise (i.e. fracturing technology), and, at the appropriate stage, to source follow-on farm out opportunities with a major oil company.

Typical of a selected potential project in Central America is the Peten basin in Belize. It is the Directors belief that, not only does the prospect fulfil the criteria of being located in a prolific oil and gas basin with extensive volumes of proven oil and gas reserves, it is also in a stable political environment with manageable access to the world price markets - the Peten basin is approximately three days shipping to the Gulf Coast of the United States of America. The Directors believe in the project's cash flow opportunities.

Other projects in the possible pipeline for the Company's initial investment focus include projects in South America and in Eastern Canada.

Progressing potential projects and due diligence

The Directors' expertise in evaluating target projects is set out below under "Directors and management" and "Track record". Financial and legal due diligence will be carried out by the Directors assisted by such other professional advisers as are deemed necessary by the Directors at the relevant time.

·; Deal Flow - although some potential projects have been identified for investment, no commitments have been made on behalf of the Company and additional potential opportunities will be thoroughly researched and sourced through the Directors' contacts in the industry.

·; Region/Location Analysis - research will be conducted to understand fully the fundamentals of each project.

·; Financial Analysis - a thorough financial analysis will take place where assumptions are identified and economics scoped.

·; Reserves Analysis - oil and gas reserves for each project will be carefully reviewed ahead of independent due diligence.

·; Project Inspection - the site will be visited (as necessary) so that any additional issues and expenditures can be identified.

·; Capital Markets View - consideration will be given to ensure the project is in line with investors' expectations.

·; Independent Due Diligence - all projects will be subject to a Competent Person's Report in line with best practice.

·; Nominated Adviser Consultation - the Company will consult with the Nominated Adviser.

·; Board Approval - an investment must be approved by the Board of Directors.

Directors and management

The Directors (being, other than Mr. Polakoff, the founders of the Company) and management team are as follows:

William (Bill) Kelleher - Executive Chairman and Chief Executive Officer (Age: 53)

William Kelleher has over 30 years' experience in the oil and gas industry, most recently as non-executive director of Bramlin Limited and previously as a co-founder and managing director of Victoria Oil & Gas Plc.

Prior to these roles, he worked for Yukos Oil Corporation ("Yukos") as its executive vice president for Central Asia where he was responsible for managing and developing its exploration and production companies in Kazakhstan and Central Asia. William's skills and industry knowledge have been gained in the exploration, acquisition, development and operation of projects worldwide, including Russia, Kazakhstan and South East Asia. He has extensive experience in advanced drilling, completion, production exploitation, exploration and producing technologies. His specific hands-on experience includes drilling, completion, well testing and production operations, supervising and advising on production exploitation operations, building and managing exploration and development projects, mergers and acquisitions.

Prior to working for Yukos, William worked for the following companies: 2001-2002 Celtic Resources Holdings Plc as executive vice president, 2001 El Paso International as managing director of new ventures, 1999-2001 Partex Oil and Gas as general manager of Partex Kazakhstan Corporation, 1997-1999 First International Oil Corporation as vice president operations - Kazakhstan Operations, 1996-1997 First Texas Hydrocarbons as vice president acquisitions and operations. Prior to 1996 from the period 1980 through 1996 William worked for Occidental International Oil and Gas, Unocal Thailand, Suez Oil Company Egypt, Washington Energy Resources, Shell Egypt (Bapetco), Alcorn Philippines, Chevron (Drilling Technology Centre), Scientific Drilling International and NL Petroleum Services (Baroid Division).

Mr. Kelleher has been a member of the Society of Petroleum Engineers for 27 years and is a qualified person for the purposes of the AIM Guidance Note for Mining and Oil and Gas Companies.

Georges Sztyk - Executive Director (Age: 64)

Georges Sztyk, B.Com/Accounting, is responsible for overall financial control and has over 35 years' experience in the oil and gas industry. After a 23-year career with Shell Canada, mainly in the marketing and distribution sectors, Georges embarked on an international exploration and production career.

Beginning with Kyrgyzstan in 1997, Georges was instrumental in the establishment of an operating company, Kyrgyz Petroleum Co. From 2003 to 2005, Georges was involved in the creation of Victoria Oil & Gas Plc, which was involved in exploration and production in both Kazakhstan and Russia. As finance director - FSU Operations, Georges was responsible for all accounting, personnel, budgeting, contracts and administration oversight for offices in Siberia, Moscow, Atyrau and Almaty.

Georges was instrumental during the due diligence process prior to the acquisition of SeverGas Invest for Victoria Oil & Gas Plc and monies were saved during the final transaction as a result of the efforts of the team headed by Georges. This was also the case with the acquisition of Kemerkol in Kazakhstan, where he led the team that analysed the field activities and the financial records of the company.

From 2006 until 2009, Georges was based in Douala, Cameroon, as vice-president marketing and administration for Rodeo Development Limited, and was one of the key players in the set up of this operating company. As well, he oversaw a comprehensive marketing survey that resulted in signed agreements for a majority of the future gas production.

Petro (Peter) Sztyk - Executive Director (Age: 39)

Following a legal career first at LeBoeuf, Lamb, Greene & MacRae LLP and then White & Case LLP, where Petro distinguished himself with industry accolades for work on significant emerging markets, capital markets and acquisition finance transactions, especially in the energy sector, Petro set up Golden Temple Capital Management LLP (Golden Temple) in 2007, an investment management company focusing on international investors and Asian projects. Petro is a director of the Vietnam Infrastructure Growth Fund and a member of the Investment Board of Golden Temple.

Petro Sztyk is the son of Georges Sztyk.

Stephen Polakoff - Non-executive Director (Age: 39)

Stephen Polakoff is general counsel and member of the Russian executive board of Integra Group, a London Stock Exchange listed oil field services company, focusing on the former Soviet Union. Previously, Stephen Polakoff was the head of the Moscow legal department at Deutsche Bank and responsible for that bank's activities in Russia, Kazakhstan and Ukraine. Stephen was formerly a senior associate with the law firm Clifford Chance in its New York and Moscow offices where he specialised in project finance (oil, gas and electricity), capital markets and debt financing. Stephen Polakoff currently is an independent director of private equity and hedge funds as well as a small cap oil company listed in Canada. Stephen has a Juris Doctorate from Georgetown University (cum laude) and a Bachelor's degree from Colgate University (honors, political science).

The Company has not had any other employees since its incorporation and currently has no other employees.

Track Record

William Kelleher co-founded Victoria Oil & Gas Plc which was admitted to trading on AIM in July 2004 and was the managing director of the company until January 2007. The company grew through the acquisitions of properties in Russia and Kazakhstan, with the market capitalisation increasing from approximately £15 million in July 2004 to a peak of approximately £270 million in April 2006. William managed all transaction work, upstream-midstream exploration & production activities, equity placing and other finance related activities.

William Kelleher and Georges Sztyk worked together at Rodeo Development Limited (of which William was a co-founder), which held the Logbaba natural gas asset in Cameroon, West Africa, via a farm-out valued at US$117 million. In January 2008, Rodeo Development Limited was acquired by Bramlin Limited, a cash shell on AIM for US$35 million, with William joining the board as a non-executive director. Later that year, Bramlin Limited merged with Victoria Oil & Gas Plc in an all share transaction valuing the enlarged entity at approximately £32 million.

The Placing and Use of Proceeds

The Placing was arranged as part of the Admission. 60,000,000 shares were issued at the Placing Price of 5 pence per share pursuant to the Placing, which will represent 79.8 per cent. of the Enlarged Issued Share Capital of the Company on Admission, together with the Placing Warrants (which will be issued on the basis of one Placing Warrant for one Placing Share and every Existing Ordinary Share, as more fully described in the Admission Document).

The gross proceeds of the Placing are £3,000,000 and the net cash proceeds to the Company of the Placing (after deduction of expenses estimated in total at approximately £457,200 (excluding VAT)) are expected to be £2,542,800. The Company intends to use the net funds received from the Placing to investigate and pursue potential acquisitions, perform due diligence, contribute towards professional costs associated with an acquisition and fund the initial working capital requirements of the Company.

Lock-in arrangements

In accordance with the AIM Rules, the Directors and their related parties (as defined in the AIM Rules), together with Simon King, an original shareholder in the Company, whose interests in the Company when taken together amount to 14.3 per cent. of the Enlarged Share Capital, have undertaken to SCS, Beaumont Cornish and the Company:

·; not to dispose of any interest in their Ordinary Shares (including any Ordinary Shares which they may subsequently acquire within one year of Admission) or any options to subscribe for Ordinary Shares for a minimum period of twelve months following Admission except in the very limited circumstances allowed by the AIM Rules; and

·; not to dispose of any interest in Ordinary Shares for a period of twelve months following the first anniversary of Admission without SCS's prior written consent (such consent not to be unreasonably withheld) except in certain specified circumstances.

Admission to Trading and Dealing Arrangements

Application has been made for admission of the Enlarged Share Capital to trading on AIM. Admission is effective and dealings in the Ordinary Shares commence today.

The Ordinary Shares have the ISIN number JE00B65FK239, with SEDOL B65FK23. The Ordinary Shares are not dealt on any other recognised investment exchange and no application has been or is being made for the Ordinary Shares to be admitted to any such exchange.

Reasons for Admission

The Company has been admitted to AIM in order to take advantage of:

·; that market's public profile;

·; a broad investor base;

·; liquidity;

·; access to institutional and other investors;

·; the ability to issue equity as consideration for investments; and

·; the potential to enhance discussions with potential vendors of investments.

Unless otherwise stated, the terms in this announcement are as defined in the Company's Admission Document.

* * ENDS * *