Hot Features
Premium
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
AIM-listed oil and gas exploration firm, New World Oil and Gas plc (LSE:NEW), saw its market value cut into half earlier today after the company said there was not enough oil to merit commercial production from its sidetrack well in its flagship project in Belize, Central America.
Shares plunged over 50% to 3.852 pence minutes after trading opened in London and partially recovered but were down 43.8% to 4.50 pence by midday, London time, at a volume of over 55 million shares, making the company one of the most traded stocks on the London Stock Exchange on Friday.
Four months after New World’s first well in Belize was spudded, the company, in concurrence with its partners, decided to plug and abandon the well as “it was determined that insufficient commercial quantities of moveable hydrocarbons were present to merit running casing and well testing operations”.
New World, which acquired a farm-out agreement to acquire 100% interest in the Blue Creek Project where the Blue Creek 2 sidetrack well was drilled, initially planned to drill a depth of 7,000 feet but decided to dig further down to test the Y3 formation and the Hillbank intervals and was met with live oil shows at a gross reservoir of 290 feet, according to the company’s report in November 2012.
The company then, in December 2012, decided to sidetrack the well above the oil-water contact point in the hope to obtain commercial flow rates at a significant trap, resulting in a disappointing result announced today.
Independent report on the possibility of oil stated the B Crest prospect, where the said well was drilled, may contact about 92.1 million barrels of oil at P50 unrisked estimates with a net present value at 10% discount of US$2.4 billion.
Despite the unexpected result, New World is not giving its search for a discovery in the 420-square kilometre acreage.
The company is scheduled to drill the West Gallon Jug Crest project, the second of the three-well programme in Belize, which was estimated to contain 113.1 million barrels of oil unrisked P50 estimates within the first quarter of 2013.
“We believe it is only a matter of time before we locate a trap of significant size and in the process make a commercial hydrocarbon discovery,” New World Chief Executive, William Kelleher, said in a statement.
Video Talk-VSA Capital still likes Africa & Kurdistan for oil stocks Today at
VSA Capital still likes Africa & Kurdistan for oil stocks
Published on Feb 1, 2013
Malcolm Graham-Wood from VSA tells Proactiveinvestors that on the whole 2013 will see more of what we saw in 2012 for investor opportunities. VSA discusses: Ophir (LON:OPHR), Afren (LON:AFR), Gulf Keystone (LON:GKP) Genel (LON:GENL) IGas (LON:IGAS), Dart (ASX:DTE) and Alkane Energy (LON:ALK)
http://goo.gl/LVwLW