22nd Jan 2013 07:00
New World Oil and Gas Plc / Index: AIM / Epic: NEW / Sector: Oil & Gas
22 January 2013
New World Oil and Gas Plc ('New World' or 'the Company')
Danica Resources Project Competent Person's Report Update
New World Oil and Gas Plc, an oil and gas exploration and development company focused on Belize and Denmark, has received a positive update to the Competent Person's Report ('CPR') from RPS Energy ('RPS') for the Danica Resources Project ('Danica Resources' or 'the Project') covering an area of 1.67 million acres and located in the productive Western Baltic region of the South Permian Basin in Southern Denmark. This report of 20 January 2012 was further included as part of the CPR as set out in the Re-Admission Document dated 3 July 2012.
Key Findings of the CPR:
·; Update follows the completion of Phase 1 (166.44km) of an 11 line 2-D seismic acquisition programme on the 1/08 Licence ('the Licence') totalling 6,420 sq km.
·; Four Zechstein leads have been identified on the new data which are of better quality than previous vintages. Plans are to acquire additional 2-D data and/or 3-D seismic surveys on Falster and Lolland Islands over the Zechstein Zn-2, Zn-3 and Zn-4 leads which were targeted by several of the latest 2D lines
·; Seismic data confirms the western bounding fault for the Als Prospect and volumetric estimates remain as detailed in the Re-Admission Document:
o Zechstein
§ Prospective Resource volumes: P90 40MMbo; P50 97MMbo; P10 192MMbo
§ NPV10 values: P90 US$419MM; P50 US$1.039 Billion; P10 US$2.007 billion
§ Risk 1 in 8 probability of geologic success by RPS
o Rotliegendes
§ Prospective Resource volumes: P90 575 Bcf; P50 1.401 Tcf: P10 3.380 Tcf
§ NPV10 values: P90 US$569MM; P50 US$1.400 Billion; P10 US$3.310 billion
§ Risk 1 in 9 probability of geologic success by RPS
·; As described in previous reports, both intervals on the Als prospect can be targeted from an onshore location and are 'drill-ready'.
·; A total of 28 leads and one prospect now identified on the Licence based on available seismic data, surface soil geochemistry, some well data and a number of academic papers:
o Seven Zechstein leads and one prospect, four Rotliegendes leads and sixteen Triassic (Bunter Sandstone) leads.
·; Due to large size of licence (1.67 million acres), should a discovery be made on drilling a well-defined Zechstein prospect, the area would offer significant further exploration potential.
·; RPS believes that the risk originally assigned to the Zechstein leads remains appropriate at this stage.
·; Phase 1 of the seismic programme met the Company's first phase of work obligations
o New World can now apply for 12.5% working interest in the Project from the Danish Energy Agency
New World CEO William Kelleher said, "This first phase of seismic has confirmed the original highly attractive volumetric estimates and associated indicative economics for the drill ready Als prospect. At the same time, we have acquired high quality data for this highly prospective Baltic Licence. We will continue to de-risk the multiple leads and prospects identified, with an additional 38.5km seismic survey planned for early February 2013 on Falster and Lolland Islands. This next phase will specifically target the Zechstein leads identified from the first phase of seismic as well as improving the probability of success in the Triassic.
"This is an extremely positive CPR update which underpins the tremendous confidence we have in our second Danish project. I look forward to updating shareholders on our continued rapid progress as we unlock the potential value of our multi-stage portfolio of projects in both Denmark and Belize, where we are currently drilling."
The conclusions section of the Update to the CPR is reproduced in its entirety below:
"New World Resources ApS is a wholly owned subsidiary of New World Oil & Gas Plc. New World Resources ApS currently has earned a 12.5% working interest ("WI") in licence 1/08, onshore/offshore Denmark and has the option to earn up to 80% WI in return for completing the work commitments defined in the Danica Resources FOA. New World Resources Operations ApS became Operator in October 2011 after Government and partner approval.
The licence covers a large portion of onshore/onshore Denmark and is located in an under-explored area and is on trend to existing plays further to the southeast of the Southern Permian Basin.
As reported in our January 2012 (and July 3rd) report, the terms and forward commitments for the licences are reasonable, manageable and appropriately scaled to high grade the existing leads into drillable prospects should the results prove positive.
The recent acquisition, processing and interpretation of approximately 166 km of 2D seismic met the Company's first phase of work obligations and are of better quality than previous vintages. However, the new grid has not supplemented the original data coverage sufficiently to de-risk the previously identified leads and prospects. The new data has provided sufficient encouragement to embark on the next phase of activity. This will require further targeted 2D data and possibly 3D seismic surveys on Falster and Lolland Islands over the Zn-2, 3 and 4 leads.
The plan to acquire more seismic is an essential next step to identify a robust prospect (or prospects) but elements of the remaining geological risk will only be mitigated by drilling one or more wells. Key risks in all three plays are trap, source, and migration.
The latest planned acquisition of seismic was agreed with Danish North Sea Fund at the recent technical committee meeting ("TCM") held on 12th December 2012.
New World Resources Operations ApS, as operator for license 1/08, has by letter dated December 19, 2012 submitted a request to the Danish Energy Agency to conduct a 2D seismic survey on Lolland and Falster in the license area.
According to the exploration program the data acquisition will take place on land within the license area. According to the application, the survey will take approximately 4 weeks and is planned to be conducted in February and March 2013, with expected start-up February 15, 2013. The acquisition of the survey is dependent upon favourable weather and road conditions in this time period.
According to the application it is planned to acquire 38.5 kilometers of 2D seismic data. The acquisition will use vibroseis equipment and will primarily be conducted on existing roads.
New World Resources Operations ApS has since received approval from the Danish Energy Agency to conduct the planned seismic survey.
Upon completion of this work, New World's working interest in the licences will increase to 25%.
Indicative volumetrics based on the currently available data demonstrate a suitably wide range of uncertainty on the potentially in-place and recoverable hydrocarbons. New World has run screening economics based on the range of outcomes and concludes that in the event of discovery the projects are likely to be commercially attractive. RPS has reviewed the assumptions and other input parameters for the screening economics and finds them to be reasonable.
The information contained in this announcement has been reviewed and approved by Andrew Kirchin on behalf of RPS. Mr. Kirchin has 25 years of relevant experience in the oil industry and is currently EVP, Consulting (US), with RPS in Houston.
* * ENDS * *
AAPG | American Association of Petroleum Geologists |
AVO | Amplitude variation with offset |
B | Billion |
Bbls | Barrels |
Bcf | Billion cubic feet |
Bo | Barrel of oil |
closure | The vertical distance from the apex of a structure to the lowest structural contour that contains the structure. Measurements of both the areal closure and the distance from the apex to the lowest closing contour are typically incorporated in calculations of the estimated hydrocarbon content of a trap. |
DHI | Direct hydrocarbon indicator |
GPoS | Geological Probability of Success |
Km | Kilometre |
M | Metres |
M | Thousand |
MM | Million |
MMbo | Million barrels of oil |
Mstb | Thousand stock tank barrels |
MMscf/d | Millions of standard cubit feet per day |
MMstb | Million stock tank barrels |
NPV10 | Net Present Value using an annual discount on cashflow of 10% per annum |
P10 | At least a 10% probability that the quantities recovered will equal or exceed the estimate. This is a measure of uncertainty not geological or commercial risk |
P50 | At least a 50% probability that the quantities recovered will equal or exceed the estimate. This is a measure of uncertainty not geological or commercial risk |
P90 | At least a 90% probability that the quantities recovered will equal or exceed the estimate. This is a measure of uncertainty not geological or commercial risk |
Play | The combination of reservoir, seal and source that is required to promote the likelihood of a working petroleum system within any given region or fairway. |
prospect | A potential trap which geologists believe may contain hydrocarbons |
prospective volumes | Quantities of oil and gas estimated on a given date to be potentially recoverable from undiscovered accumulations. In the event of discovery they are likely to be technically viable and economic to recover |
Reefal build-ups | Lithified carbonate build-ups associated with repeated episodes of coral reef formation on a platform edge often in response to minor sea-level change cycles |
reservoirs | A subsurface body of rock having sufficient porosity and permeability to store and transmit fluids |
Rotliegendes | The Rotliegend is a sequence of rock strata of early Permian age found in the subsurface of large areas in western and central Europe and mainly consists of sandstone layers. It is usually covered by the Zechstein. |
sq km | Square kilometres |
Stb | Stock tank barrels |
Scf | Standard cubic feet |
SPB | Southern Permian Basin |
SPE | Society of Petroleum Engineers |
SPEE | Society of Petroleum Evaluation Engineers |
Triassic | Of or belonging to the geologic time, system of rocks, or sedimentary deposits of the first period of the Mesozoic Era - between the Permian and Jurassic periods, about 245 million to 208 million years ago. |
WPC | World Petroleum Council |
Zechstein | Unit of sedimentary rock layers of Middle to Late Permian (Guadalupian to Lopingian) age located in the European Permian Basin. |
For further information please visit www.nwoilgas.com or contact:
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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.
New World's first investment was in the Blue Creek Project, located in the productive Petén Basin in northwest Belize, and consists of two concessions, Blue Creek and Blue Creek South, totalling 420sq km. The Company has signed a Farm-Out Agreement for up to a 100% working interest in the project upon full completion of the earn-in work programme. A multi-phased 2-D seismic acquisition and interpretation programme is being undertaken, with Phase 1 complete and Phase 2 currently underway, the completion of which will earn the Company a 25% interest in the project.
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