New World Oil and Gas Plc announced that further to signing a Letter of Intent on December 23, 2011, it has completed a Farm-Out Agreement ('FOA') with Danica Resources ApS, to acquire an initial 12.5% but up to an 80% working interest in the highly prospective 2,479 square miles (6,420 square kilometers) License 1/08 ('the License') which includes both onshore and offshore acreage in Southern Denmark in the productive Western Baltic region of the South Permian Basin. Under the terms of the FOA, New World will assume operatorship of the License.
On January 25, 2012, the Company announced the highly positive results of a Competent Persons Report ('CPR') carried out by RPS Energy on the concession, that indicated, inter alia, that the already identified Als Prospect has P50 resources of 97 million barrels of oil and 1.401 TCF of gas with a Net Present Value ('NPV10') of $2.44 billion, underpinning the prospectivity of the License.
New World will be named Operator of the Project by means of an addendum to the existing Joint Operating Agreement ('JOA') between the current operator, Danica Resources ApS (80% working interest) and its single partner, Danish North Sea Fund, that holds the remaining 20% working interest. The first phase of a planned 93 miles (150 kilometers) 2-D seismic acquisition program on the License is due to commence in 2Q 2012 at an estimated cost of $1.4 million net to the Company's interest and will deliver an initial 12.5 percent working interest to New World. New World has the option to increase this to 80 percent at its discretion based upon the following provisions.
Key provisions of the above agreements:
New World CEO William Kelleher said, "We are delighted to announce the completion of the transaction documents for the Danica Resources Project which adds a third project to our growing portfolio of highly prospective assets that includes our most advanced Blue Creek Project in Belize, with its combined P50 resource estimate of 294MMbbl and Estimated Monetary Value of $1.53 billion. This exciting addition increases our exposure to the productive South Permian Basin in Denmark to 4,057 square miles (10,507 square kilometers) and includes the Als Prospect which, on its own, has a P50 resource of 97 MMbbls of oil and 1.401 TCF of gas.
"The Als Prospect provides an enticing indication of the huge potential of the Danica Resources Project and, as a result, we are eager to explore the area further in the expectation of identifying additional sizable prospects. With this in mind, we look forward to commencing our seismic acquisition program shortly and will update the market on our progress in due course."
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