New World Oil & Gas reported Thursday that its shareholders have approved a fund raising of $25 million that will see junior oil and gas company Niel Petroleum take a 75.6-percent stake in the business. New World plans to use the funds to acquire near-term oil and gas production projects to complement its exploration projects in Denmark and Belize.
The fundraising marks a departure for Niel Petroleum in that its main geographical focus to date has been on Africa.
New World said its shareholders had approved the issue of more than 2.1 billion subscription shares to Niel Petroleum in return for $25 million. Niel will also provide a debt facility of $25 million to New World.
New World CEO William Kelleher commented in a company statement Thursday:
"Niel's decision to invest $25 million in the company as well as provide a $25 million debt facility is a vote of confidence in New World's management team, and our stated objective to build a leading multi-project oil and gas exploration and production company.
"The $25 million raised will be used to acquire near term production or producing oil and gas projects to complement our existing exploration portfolio, which combined with potential access to a $25 million debt facility to fund development work, can transform New World into a sustainable, multi-stage oil and gas company.
"Adding production to our portfolio would not only generate cash flows, it would also provide asset backing to our market valuation in the form of reserves, reduce our shareholders' exposure to exploration risk while still retaining the significant upside potential we believe exists at our three projects in Belize and Denmark."
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