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Extension granted for the Danica Jutland and Resources Licences, Denmark
New World Oil and Gas Plc, an oil and gas operating company focused on Denmark and Belize, has reached agreement with the Danish Energy Agency to extend its existing work programme commitment deadlines for Licences 1/08, 1/09 and 2/09 to 15 September 2015.
These extensions are granted to allow the Licence holders time to conduct additional technical work to further de-risk the prospects already identified on all three Licences. The Company currently holds a 25% working interest in the Licences through its Danish subsidiaries.
The Licence extensions are contingent upon the following licence work programmes:
1. For Licence 1/08 the licence holders shall conduct a fluid inclusion study from wells in the Licence area. As a minimum, the study shall include samples from Søllested-1, Rødby-2, Ørslev-1 and Kegnaes-1 wells. The results shall be evaluated and integrated with the existing interpretations of the area by latest 1 September 2015. By latest 15 September 2015 the licence holders shall either commit to conduct a 3D seismic survey over one or more mapped prospects or relinquish the licence.
2. For Licence 1/09 the licence holders shall conduct a fluid inclusion study from wells in the licence area. The study shall include samples from the Nøvling-1, Løve-1 and Jelling-1 wells. The results shall be evaluated and integrated with the existing interpretations of the area latest 1 September 2015. By latest 15 September 2015 the licence holders shall commit to carry out 2D seismic surveys over one or more mapped prospects or relinquish the licence.
3. For Licence 2/09 the licence holders shall conduct a fluid inclusion study from wells in the licence area. The study shall include samples from the Nøvling-1, Løve-1 and Jelling-1 wells. The results shall be evaluated and integrated with the existing interpretations of the area latest 1 September 2015. By latest 15 September 2015 the licence holders shall either relinquish the Licence or commit to carry out 3D seismic surveys over one or more mapped prospects to allow for a decision to be made to drill one exploration well in the Licence. This work shall be completed and evaluated well before the approved extension of the Licence period expires on 17 May 2017.
Background
Since the Company farmed into the Licences in 2012, it has conducted an extensive work programme of 2D and some 3D seismic acquisition, reprocessing and interpretation, re-evaluation and interpretation of existing well data and conducted soil sampling, including a Vaportec geochemical survey, to detect hydrocarbon anomalies at the surface. The total cost of this work to date is approximately US$10mn, including the 20% portion funded by the North Sea Fund. As part of the extension granted by the Agency, the Company will perform a fluid inclusion study from existing wells to further de-risk and better understand the hydrocarbon generation and migration in the Licences.
The results of New World’s work programme to date have significantly improved the resource estimates and risks associated with the high graded prospects within the Licences. For example, the seismic data has improved fault correlations, helped identify Zechstein oil leads and prospects, and led to significant growth in the North Rødby prospect in Licence 1/08. Risks have been reduced from <10% GPoS on entry to 20-25% GPoS based on the new data acquired.
Seismic and well analysis has improved the understanding of the primary targets in the Zechstein carbonates and Triassic and Rotliegend clastic reservoirs. New and reprocessed seismic has enabled the Company to identify the Zechstein carbonate platform margin and associated "reef"- like features that are analogous with the proven Koscian Fields in Poland.
Due to the presence of existing dry holes in the Licences, the key risk pre-access was identified as the hydrocarbon generation and migration story. The soil sampling and Vaportec surveys have improved confidence in the presence of active source systems and it is hoped the new fluid inclusion study will provide further positive evidence.
As part of the extension, the Licence holders have agreed with the Agency to relinquish less prospective areas on the Licences and focus on further evaluation of high graded prospects such as Jensen, Harboe, Jelling and Zechstein leads in 1/09 and 2/09 and North Rødby and Zechstein platform leads in 1/08. These prospects and leads are estimated to contain unrisked gross P50 resource estimates in excess of 75mmbbls of oil and 1.1TCF of gas based on previously published CPRs by RPS. The remapping of the North Rødby seismic indicates that the resource volumes associated with the prospect are likely to increase.
New World's non-executive Chairman, Chris Einchcomb, stated "We are excited to share the results of the work that the Company has been undertaking in Denmark with our shareholders. We believe the results create the potential for real value for the Company and will help in our continued efforts to find partners to fully develop the potential of these Licences."
