MM: You have stated that Blue Creek is structurally high when compared to the nearby Spanish Lookout operation. Why is this advantageous geologically speaking?

WK: Geologically speaking, when a field is structurally high to another field that means the structurally high field cannot be drained by the producing wells in the neighboring field which is “down dip” or “structurally low” to the producing field.

Oil and gas migration takes place vertically upward because it’s density is less than water and it seeks expansion as it is highly compressible.

MM: What level of hydrocarbon volumetric are you targeting at Blue Creek and how will the phase two seismic help you define volumetrics?

WK: Phase one provided us with a better understanding of the fault orientation in the upper cretaceous interval in Blue Creek. Our previous understanding was these faults which are setting up the subsurface traps in the cretaceous were oriented in a N-S and E-W orientation. Phase one has revealed this fault system is more in a NNE to SSW direction. We have made some adjustments to the seismic line orientation in Phase 2 to help us better see the fault displacement at this level which helps provide a better understanding of trapping mechanism thus further reducing risk. Our plan is to intersect these fault planes with seismic data perpendicular to the fault orientation so we can see what the vertical displacement is of the productive upper cretaceous interval (which produces oil in Spanish Lookout), and locate whether it is juxed-opposed to sealing formation such as an anhydrite or clay (which is impermeable) which would cause us to believe that oil migration from it’s source has stopped at our location and an oil accumulation exists. Once we complete these steps we will planimeter the area (size) of each trap and calculate its volumeterics.

Keep in mind, the relative timing of the trap formation in the Upper Cretaceous, and the tectonic activity that actually caused these traps to form in the first place, took place in Blue Creek at the same time it did Spanish Lookout. They are too close together to support any different theory. Another point to mention is the oil which migrated to Spanish Lookout migrated from the same source rock as would be present in Blue Creek.

The real risk here is the timing of the formation of the subsurface traps relative when the oil arrived from the source rock. Did the oil migrate past before the traps were formed, or where the traps formed and the oil migrated from its source and cause an accumulation to trap and be present.

MM: Assuming the seismic proceeds according to plan what are the costs associated with the first drill and what options are available to fund this initial drill operation?

WK: Each well will cost USD $11 to $12 million. Our options for financing these wells are: 1) Place equity. 2) Find a partner or partners and farm down our cost exposure and thus reduce the company’s interest in the project. Upon making a discovery we will seek to complete debt financing for development.

MM: How has the work undertaken to date affected your confidence in the prospectivity at Blue Creek?

WK: We are actually very excited about the results of phase one and phase two. With each step of progress we make our confidence increases.

Would you like to find out more about New World Oil & Gas ??

You are cordially invited to an Investor Presentation

at

"The Counting House" Cornhill London

on Wednesday 14th December

For further details and to reserve your place click here

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