New World Oil and Gas completes drilling on second well

New World Oil and Gas has completed drilling at its second Blue Creek well in Northwest Belize with oil and gas showing in the mud logs at various intervals.

The well, on the B Crest prospect on its flagship Blue Creek project, is the second of a three-well program. It reached a total depth of 10,490 feet and the company revealed: "Oil and gas shows have been present in mud logs recorded throughout the upper and middle Cretaceous intervals, including the Y1, Y2 and Y3 intervals of the Yalbac formation and the Hillbank formation."

The next stage, currently underway, is to run electric wireline logs in the well which will, amongst other things, measure certain rock formation characteristics and enable the company to calculate fluid saturation levels, porosity, and determine rock thicknesses.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Subject to the results of this exercise, New World will then determine at what depth intervals to carry out further evaluation which will assess the way forward.

New World Chief Executive Officer William Kelleher said: "We have confirmed that the B Crest prospect is located in a working hydrocarbon system. Encountering oil shows at all targeted intervals is encouraging but there is still more work to be done. Reviewing the results of the open hole wireline logs is the next course of action. I look forward to providing further updates to shareholders as and when we have further information."

Once electric wireline logging has been completed the company will then go through the 'Well Testing' stage as this is the only way to determine if a well will flow with commercial rates.

B Crest, has prospective resources of 92 million barrels of oil, but until these tests are completed there remains a large risk that the find won't be commercially viable.

CM