New World Oil and Gas plummets on Belize well abandonment
Shares in New World Oil and Gas (NEW) plunged almost 30% on Friday after it announced it had plugged and abandoned its Rio Bravo well in north-west Belize.
The well was deemed non-commercial.
Separately, the company revealed samples showed the existence of an active hydrocarbon system and live oil shows were measured in the Belize Y3 and Hill Bank formations.
The company insisted that the technical data produced by the Rio Bravo well demonstrated that the New World acreage would "likely contain" productive reservoirs.
New World said the acreage "will play an important role during the drilling of the future wells in Belize".
"We remain confident that the elements required for a working hydrocarbon system are in place in north-west Belize," commented William Kelleher, chief executive officer.
"As highlighted by our results to date, trap and timing of migration remain the key outstanding elements required for success in this area and, with multiple prospects already identified, we believe it is only a matter of time before we locate a trap of significant size."
Accordingly, the company revealed it was in initial talks with potential farminees, in order to fund further exploration on the Blue Creek licence in Belize.
New World confirmed it had submitted an application to the government of Belize for the assignment of the final 25% working interest in the Blue Creek licence, which would elevate the company's working interest to 100%.
"Our remaining five drill ready prospects in Blue Creek, and the multiple prospects identified in our three licence blocks in Denmark will mark the next milestones for the company," added Kelleher.
Approval from the government is expected in the coming weeks. The company also confirmed well costs were on time and under budget.
Craig Howie, analyst at Shore Capital, which is a broker for New World, said that this was "a disappointing outcome".