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Binding Framework Agreement signed for oil production in Kuwait and update on Subscription to raise US$25 million
Further to the approval of Shareholders at the Annual General Meeting on 12 September 2013, New World has continued to work with the Subscriber, Niel Petroleum SA, to complete the subscription on the agreed terms.
In line with this, New World has been informed that Dr. Muaaz KH M Alfahaid, a Kuwaiti national representing Al Maram Trading & Contracting LTD, will be acquiring a 20% ownership stake in Niel for a consideration of US$20 million, and in turn Niel will be using this consideration to complete the Subscription with New World.
With this in mind, the company is pleased to announce that it expects the balance of the Subscription funds to the value of US$20 million to be paid by Niel no later than 30 July 2014 and following which 2,184,897,959 Subscription Shares will be issued and allotted at a price of 0.735p per share.
In conjunction with the above development, the company is pleased to announce that it has signed a binding Framework Agreement with Dr Alfahaid and Niel which contains certain agreed aspects of a proposed agreement between the parties whereby the Company expects to participate in drilling and production in Kuwait and marketing of crude oil abroad.
In addition to the acquisition of a 20% ownership stake in Niel for US$20 million, the FA provides for the acquisition by New World of a 49% equity interest (with 60% economic benefit in the net revenues) of Al-Maraam Al-Ahliya Company for General Trading and Contracting LLC, duly registered and established in Kuwait, one of the few companies that has been granted the right to participate in tenders to drill for and produce oil and gas in Kuwait, and to sell and market oil produced in Kuwait to the international market.
As part of the definitive transaction, and on completion, New World will nominate a General Manager of Al-Maram. New World, Niel and Dr Alfahaid expect to execute all transaction documents related to this venture shortly and to begin setting up operations in Kuwait thereafter.
