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Denmark: New World Oil and Gas reports positive update to Danica Jutland CPR
24 Sep 2012
New World Oil and Gas has received an interim addendum update ('CPR Update') to the Competent Person's Report ('Admission CPR') as published in the AIM Admission Document and dated 3 July 2012 from RPS Energy for the Danica Jutland Project located in the highly prospective Jutland on-shore area in South Western Denmark.
Summary of the CPR Update and revised New World economics:
- Update follows the completion of Phase 2a of a 2-D seismic acquisition programme on Licence 2/09 ('the Licence'), consisting of 5 additional seismic lines totalling 56km, over the two identified Triassic prospects, Jelling and Harboe.
- Probability of Geologic Success for Jelling and Harboe upgraded to 1 in 5 from approx. 1 in 8 from the Admission CPR.
- The P50 (Best Estimate) unrisked Prospective Resources as reported on by RPS for Jelling and Harboe are 166.4 Bcf and 351.2 Bcf respectively (see tables 2 and 4), net to New World's 80% working interest (on the basis that New World exercises its option to increase this percentage interest upon the acquisition of additional seismic and drilling wells on each prospect), totalling 517 Bcf. The figures in the Admission CPR, as reduced to a comparable 80% working interest basis, are 292.3 and 305.6 Bcf shown in that report as "Best Estimate".
- The New World calculated indicative P50 Success Case Economics for Jelling and Harboe are US$176 million and US$377.6 million respectively (see tables 1 and 3), net to New World's 80% working interest (on the basis as above), totalling US$553.6 million. The figures as reported in the Admission CPR are US$316.1 million and US$321.5 million respectively.
- The additional seismic data, which is of excellent quality, has resulted in a slight decrease (c.80.9Bcf) in aggregate volumetric figures for Jelling and Harboe, with a small increase in Harboe and a more significant reduction in Jelling. This is reflected also in the New World economics.
- However, the excellent data has also provided an improved delineation of the structure at the Jelling prospect and a more robust structural configuration of the Harboe prospect leading to the reduction of risk from 1 in 8 to 1 in 5.
- RPS has stated that the licences are large and offer significant exploration potential should a discovery be made.
- With the completion of the Phase 2a seismic programme, New World has applied for the assignment of an additional 12.5% working interest in the Project from the Danish Energy Authority to take the current net working interest to 25%.
- New World also has the option to earn an 80% working interest in the Project upon completion of drilling two wells, as set out in the Farm-Out Agreement (announcement 11 October 2011).
- Also on the Licence, the prospective resource estimate for the Jensen Zechstein oil prospect (as reported in the Admission CPR and adjusted to an 80% working interest) is 48MMbo, and the indicative P50 Success Case Economics is US$667 million - a 3-D seismic programme planned for Q1 2013 will further explore the prospect.
- Volumetrics and indicative P50 Success Case Economics for Jelling, Harboe and Jensen prospects combined equal 134 million BOE and US$1.22 billion (80% WI).
New World CEO William Kelleher said, 'Our focus is on systematically de-risking our prospects and this CPR has improved our probability of geologic success from approx. 1 in 8 to 1 in 5 for two of our prospects - a substantial improvement. This is a positive CPR update and another significant milestone for New World that underpins the tremendous confidence we have in our first Danish project. Despite the minor decrease in our overall Triassic volumetrics, the excellent seismic data has significantly reduced the risk and after just the second phase of seismic we now have combined P50 indicative volumetrics and success case economic outcomes for our Danica Jutland Project totalling 134 MMBOE and a NPV10 of US$1.22 billion net to New World. Moreover, these numbers still only include the three of 10 identified prospects or leads which have been formally reported on.
'We have also identified two drillable locations on Licence 2/09 and consider these prospects to be drillable in 2013 subject to the acquisition of additional 3-D seismic in Q1 2013 over the Zechstein Jensen prospect, on Licence 1/09, with results to be updated in another CPR update planned for Q2 2013.
'I look forward to updating shareholders on our continued rapid progress as we unlock the potential value of our two Danish Projects, Danica Jutland and Danica Resources, as well as our Blue Creek project in Belize where we will shortly spud our first well.'
Source: New World Oil & Gas