Improved Terms for the Blue Creek FOA

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

14 June 2012

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

Improved Terms for the Blue Creek Farm-Out Agreement

New World Oil and Gas Plc, a company focussed on making investments in the oil and gas sector and its partner, Blue Creek Exploration Limited ('BCE'), have agreed to amend the terms of the Farm-Out Agreement entered into between them on 15 June 2011 (the 'BCE FOA') pursuant to an amendment agreement entered into between New World and BCE on 30 May 2012 (the 'Amendment'). Subject to standard regulatory approval, the Amendment will lead to a substantial reduction in the cost of a drilling programme should the Company elect to proceed with drilling, as well as provide New World with the opportunity to commence production at Blue Creek earlier than previously anticipated.

The BCE FOA covers a 420 sq km area and is referred to as the Blue Creek Project ('the Project') in the Petén Basin in Northwest Belize in which the Company, as operator, currently has a 25% working interest. On the completion of the revised staged work programme (detailed in Table 1), New World has the option to increase its working interest in the Project to 100%. Two identified prospects at Blue Creek, "A" and "B Crest", are estimated to have gross P50 volumetrics of 294MMbbl from just two of four potential horizons in the subsurface and a combined Expected Monetary Value of US$1.51 billion. 

Key elements of the Amendment:

·; Total cost of drilling obligations to earn into a 100% working interest in the Project reduced by a third to US$13.5 million compared to the original estimate of US$20 million due to reduction in target depth to 5,500 ft (base Y2) from 11,300 ft (upper Margaret Creek)

·; Three wells to be drilled through the base of the Yallback Formation('Y2') as opposed to two previously targeting the Hillbank and Margaret Creek Formations

·; Y2 is the most prospective formation when compared to nearby producing fields and includes all estimated gross P50 volumetrics of 294MMbbl with a combined Expected Monetary Value (EMV10) of $1.51bn as reported by RPS

·; Total success case combined discovery NPV10 US $9.1 billion

·; First of the three wells will earn an additional 21.6% working interest in the Project, with the remaining two each earning 21.7% - bringing New World's working interest up to 100%

·; If commercial quantities of oil are discovered in one or more of the three wells, they will be put on test and into early production for the purposes of generating early cash flow

·; All oil production will be sold at world oil price, (WTI), as the Gulf Coast of the US is only a 2-1/2 day steam away from off take in Belize

·; A fourth well to 200 ft below the Margaret Creek formation will be drilled from cash flow derived form one or more of the three obligation wells

·; RPS reports the probability of geologic success to be 1 in 5

New World CEO William Kelleher said, "This amendment to the FOA is a reflection of the rapid progress we have made in identifying and derisking six prospects at Blue Creek. Under the new and more favourable terms, if we elect to undertake a drilling programme, we can now drill to the Yallback, a formation already producing in nearby fields that is located at approximately half the depth of our original target. As a result, our drilling costs will be materially reduced and, should a commercial oil discovery be made, lead to oil production commencing at Blue Creek much sooner than anticipated minimizing the time required to enter into cash flow. I look forward to providing the market with further updates in due course."

Table 1 - BCE Farm-Out Work in Programme

* *ENDS* *

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

Notes

New World Oil and Gas Plc is focussed on making investments in the oil and gas sector, either by acquisition or by participation through Farm-Out. The Company targets late stage exploration or early production projects that, in the opinion of the Directors, are undervalued, underdeveloped or under-performing, located in basins with large proven reserves. New World is currently operating in Central America and Europe where New World has acquired two highly prospective projects via Farm-Out Agreements, although the Board is actively identifying exploitation opportunities in areas including Africa, South America and South East Asia.