New World Oil and Gas raises proceeds for Belize well

New World Oil and Gas shares plunged Thursday as the oil and gas company said it has raised 6.3 million pounds to test and appraise the Rio Bravo 1 well in Belize, Central America.

The group raised the proceeds through the issue of 315m new ordinary shares at a price of 2.0p each.

The company started drilling operations at the well on March 1st and expects to reach a total depth of 8,800ft by late April as operations are on schedule and under budget. Drilling results will be then be released.

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

In the event that the Rio Bravo 1 well is not tested and appraised, the funds will be used for drilling of two wells at the Danica Jutland project in Denmark.

It would also be used for seismic interpretation and competent person's report costs at the project, and for additional general working capital purposes.

Drilling is in progress in Belize at the West Gallon Jug prospect targeting an un-risked prospective resource of 113m barrels of oil.

William Kelleher, Chairman and Chief Executive, said: "Thanks to the support and interest of both existing and new shareholders, we are now in a position where we can test and appraise the Rio Bravo 1 well which the company is currently drilling in Belize (assuming a successful well logging programme) or, in the event the well is not tested, we are funded to drill two wells in the forthcoming 12 months on our highly exciting Danica Jutland project, targeting the Harboe and Jelling prospects, each of which could be transformative for the company."

He said all three wells are expected to be drilled over the next year targeting combined gross volumetrics of 200m barrels of oil equivalent with a success case valuation of $3.62bn net to the company's interest.

RD