New World Oil and Gas (NEW)
has plugged and abandoned a well in the Petén Basin in north-west
Belize after finding insufficient hydrocarbons to merit running casing
and well-testing operations.
Shares in the firm lost 44% on Monday morning to make it the heaviest faller on AIM. Interactive Investor users were trading the stock heavily, with twice as many choosing to sell as buy.
The
Blue Creek #2A ST well was drilled to a measured depth of 11,650 feet
on 27 January and logs and core samples were independently analysed, as
well as mud logs and all other available data. It was determined that an
active hydrocarbon system existed, and live oil shows were measured in
the Y3 and Hillbank formations.
But after analysis and in
consultation with New World's partners, Blue Creek Exploration and the
government of Belize, it was determined that insufficient commercial
quantities of moveable hydrocarbons were present.
The company
believes the targeted trap was likely breached as a result of tectonic
activity, and extensive residual oil was present along with high
saturations of formation water.
New World said the significant
amount of technical data produced by the Blue Creek #2 and #2A ST wells
demonstrates that the company's acreage has received a petroleum charge
and contains productive reservoirs. This data will also play a role
during the drilling of the explorer's next well, Rio Bravo Well #1, in
West Gallon Jug, for which New World is fully funded.
The location
is drill ready, with a drilling pad, access road, base camp, water well
and other infrastructure all in place. It is anticipated that the
drilling of the well will commence in the first quarter of 2013.
Chief
executive William Kelleher said, "We remain highly confident that the
elements required for a working hydrocarbon system are in place in
north-west Belize.
"I remain confident that we are on course to
build a significant oil and gas exploration and production company and
in the process create value for all shareholders."
Analyst view
Analysts
at Fox Davies commented: "Today's announcement from New World is
disappointing, but unfortunately is a reflection of the risks associated
with exploration, more so in frontier regions.
"Investors,
however, should take some comfort that the drilling proved a working
hydrocarbon system, and that the lack of success in this instance is
more closely associated with localised issues, opposed to wider basinal
issues, which would have killed any further prospectivity.
"Given that [New World] has sufficient funds drill the next well, we remain upbeat about the company's near-term outlook."
Interactive Investor view
Investors
were shocked at Friday's news, with updates as recent as 22 January
striking a positive note. Drilling is always a gamble, but a lot was
riding on a positive outcome from this well.
The less risk averse
will see Friday's massive discount as an opportunity to buy into the
stock, or at least not to sell. The company has proved through the
drilling that it has a working hydrocarbon system.
This is on top
of other projects in Denmark, and some positive news from any of these
could send shares back the other way. But of course another dry well
could spark another drop and if funds start running low the share price
could be further eroded.
There was positive seismic data from the
Danica Jutland Project in Denmark in September, and New World announced
in January that the prospect is drill ready, but investors may have to
wait for spudding, with no dates set for commencement.
It is at
least positive that the further drilling at Blue Creek is fully funded
and it seems that the company is keen to get on with it as soon as
possible in the hope of generating some positive news flow.
The Interactive Investor discussion boards were heavy with disappointment, with 'Wrighty'
commenting: "I think Wiliam Kelleher has damaged his credibility on
this drill. Yes he has to talk the talk and be positive but I am
surprised given this was their first drill and that they were operator."Will anyone ever believe an RNS of his again? Right to the last they were 'targeting a potentially significant trap' in these 'sections of interest'."
But 'Celtic Heart' was more moderate in reaction: "In my view you have two choices, join the lemmings jumping over the cliff or realise that we still have a working hydrocarbon system and wait it out.
"We did not find the oil on this occasion but the data gathered makes it a lot more likely we will on the next drill. What is the point of taking a huge hit? This is what oil exploration is all about."
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1 comment:
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THE LAW IS A LIE and to enforce the law is no less than TREASON. What else can you call it when a law with "NO COMPELLING GOVERNMENTAL INTEREST" is strictly enforced and a war, against a plant and the people who understand and use that plant,is openly declared by the powers that be.
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Only unenlightened condemning hearts absent of Gods' love could possibly wish to see the continued incarceration of their brothers and sisters for their use and understanding of God's great gift.
Geniuses 1:29 "And God said I have given you every herb.
Ezekiel 34:29 And I will rise up for them a plant of renown.
If you see it as unclean, then for you it is unclean, but as for me, it is a holy plant and a blessing to mankind.
STOP THE WAR--GIVE PEACE A CHANCE
William Conde BelizeHemp.com
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