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New World Oil and Gas Plc, an oil and gas operating company, currently focused on Belize and Denmark, announces its final audited results for the year ended 31 December 2013.
Chairman’s Statement:
Overall, 2013 was a challenging year for New World. Our drilling campaign at the Blue Creek Project in Belize failed to confirm commercial quantities of movable hydrocarbon. However, from a technical perspective, we have de-risked the project by locating three of the four elements required to make a commercial discovery, with the trap as the only remaining risk now blocking our way. With this in mind, we remain confident that our four remaining drillable prospects have the potential to contain oil. Following the completion of our earn-in steps to our work programme, New World has been assigned a 100% working interest in Blue Creek, and we are continuing to seek a partner or outside investment to defray risk and to share the costs to continue our exploration work.
In Denmark, we have proposed more technical work in the form of additional seismic reprocessing and geochem to better define our existing prospects and have been granted extensions currently through to 31 January 2015 as recently announced. This additional time will allow us to pursue on-going discussions with farm-in partners and again we look forward to further unlocking the value in these two projects.
The most significant development of 2013 has been the partnership entered into with Niel Petroleum S.A. for a US$25 million investment by Niel which will be used to acquire a near-term/producing asset as the Company looks to build a sustainable, multi-stage oil and gas company. Originally scheduled for completion in September 2013, the transaction has yet to be completed due to Niel not having made the funding available. The original proposals also contemplated a related conditional US$25 million debt facility. Niel has, however, paid New World a sum of US$250,000 to offset the delays in completion and has placed US$4,800,000 in escrow pending completion of the transaction. Given the matter disclosed below this will however require a new vote of independent shareholders, as recently announced.
In partnership with Niel, we have been exploring a number of potential markets, including Africa, the U.S. and the Middle East. Post period-end we have recently concluded an agreement with a Kuwaiti company, which is intended to provide access to a number of opportunities in this oil rich nation. A site visit has been concluded in Kuwait, and meetings were held with high-ranking officials in the ministries of Industry and Commerce, local business leaders, and industry professionals.
Post Period-end, in May 2014 we signed a share purchase agreement providing the mechanism for New World to become a 49% shareholder and hold a 60% economic interest in Al-Maraam with a view to fully developing Al Maram’s opportunities in the oil and gas sector in Kuwait. The due diligence is still in progress, and on completion we look forward to commencing operations in Kuwait and unlocking the significant hydrocarbon potential the country has to offer in conjunction with our new partner. This is dependent upon the conclusion of the Niel subscription referred to above.
While the primary objective of the Company remains to become a multi-project oil and gas exploration and production company, we have shifted our emphasis to seeking sustainable revenues from cash generating opportunities. Along these lines, we are analyzing a number of projects in North Africa, the Middle East, the U.S. and Latin America and will keep the market informed in due course.
Financial Review:
The Company has no current revenues and we are reporting a loss of US$11,945,000 for the 12 months ended 31 December 2013. We continue to keep a very tight control over our overhead and business development expenses. We have also reached an agreement with Niel for the funding of on-going overhead expenses and business development costs which may now be taken from the escrow account.
During Q1 of 2013, the Company raised US$10 million by the issue of 315,000,000 new ordinary shares, at a price of 2 pence per share. In addition, a number of shares were issued during the first six months of the year, to satisfy on-going contractual obligations. Total shares in issue now stand at 702,723,713. The Company has no ordinary shares held in Treasury.
Corporate Review:
At the completion of the Niel subscription, it is expected that the composition of the Company’s Board of Directors will be in line with what has previously been announced by the Company.
Mr. Grégoire Bellois, a professional geologist will be joining the New World team, as Vice-President, Exploration. Grégoire brings many years’ experience in Africa and the Middle East and other areas of the world, and we look forward to working with him. He will provide a strong in-house technical support for our geoscience team.
With a view to reducing overhead costs, the Company has closed its Houston office, and it is expected that, going forward, we will be sharing office space with Niel Petroleum in both Geneva and Dubai which will contribute to a better synergy between the two companies.
Outlook:
If we can complete the agreement with Al Maraam as contemplated, New World will have access to a major oil producing region which has significant reach into the global market. It is our intention to get involved in the drilling aspects of the business, in partnership with a qualified drilling contractor at a time when Kuwait has declared its intention to increase oil production from 2.8 million barrels per day, to 3.5 million barrels per day by the end of 2015.
Also of strong interest is that Al Maraam has represented to us that it has the right to export Kuwaiti crude and refined products. Our recent meetings in-country have confirmed this opportunity and Kuwait is anxious to open new markets for the increased production targets and is looking to the private sector to help in achieving these goals. We believe this will provide New World, in cooperation with established oil traders, with an opportunity to enter this potentially lucrative market.
We are deeply grateful to our shareholders for their continued support and look forward to providing updates on our progress at this transformational time.
Bill Kelleher
Chairman
30 June 2014
