Adds broker comments....
New World Oil and Gas PLC (LON:NEW) said the Competent Person's Report (CPR) from RPS Energy highlights the prospectivity of the Blue Creek project, consisting of two concessions in the productive Petén Basin in Northwest Belize.
The report was commissioned when the project was acquired, in May, and among the key findings is that Blue Creek appears to be a good opportunity to access early stage exploration in a very prospective area.
New World has a right to earn up to a 100 percent participating interest in two frontier exploration concessions, Blue Creek and Blue Creek South, - held under BCE PSA onshore Northwest Belize.
The Blue Creek and Blue Creek South licenses are favourably located in the relatively under-explored North Petén Basin and are considered to be highly prospective, albeit at a very early stage of maturity, the CPR found.
Furthermore, oil seeps, nearby oil field discoveries and geochemical work in NW Belize all point to a working hydrocarbon system.
The concessions lie in very close proximity to the north of the recently discovered and productive Spanish Lookout and Never Delays oil fields and due east from the Xan and Chorop oil fields of northwest Guatemala.
According to RPS, The Spanish Lookout and Never Delays fields, each of which has reported reserves in the range of 25 million barrels of oil, are thought to be structurally similar to the leads developed on the Blue Creek project thus far.
Oil production in the region is currently exported by tanker through the deep water port of Big Creek and is sold at world oil price.
RPS assigns a risk between 1 in 12 (8.33 percent) to 1 in 8 to (12.5 percent) to the current likelihood of discovering a hydrocarbon accumulation in the Blue Creek concession. This is an appropriate level of risk for a new play in an emerging area. The planned acquisition of seismic and the identification of robust structures could reduce this risk to something less than 1 in 8.
New World chief executive William Kelleher said: "The company is highly encouraged by the results of the CPR … We expect completion of the transaction to take place shortly, followed immediately by a seismic acquisition programme, in accordance with the previously stated strategy of improving our chances for an early discovery.
"Presently, we have multiple targets on the northern license area that are significant in size and potential, and closely resemble existing producing fields to the south. Prior to actual drilling, our plan is to continue to high-grade these potential accumulations by reducing the risk, using our existing cash reserves."
The firm's broker Shore Capital welcomed the news. "New World appears to be making good progress towards acquiring its first upstream E&P interests and, to our minds, the RPS report provides confidence in the underlying potential of the concessions in Belize; we look forward to formal completion of the proposed transaction, ahead of commencement of seismic data acquisition which is expected in mid-June."
The group listed on AIM last month, raising £3 million. Right now it is an investment company and its strategy is to identify and acquire assets that it believes are underperforming or undervalued, where it can use the management team’s expertise and experience to ‘facilitate growth’ or unlock value.
The group was formally incorporated a year ago. The initial focus will be on Central America and eastern Canada.
CEO Kelleher was one of the founders of Victoria Oil & Gas (LON:VOG) back in 2004.