Newton Energy Corporation

Newton Energy Corporation

January 28, 2013 09:00 ET

Newton Energy Corporation Announces Core Asset in the UK East Midlands; Update on Belvoir and Potential Farm-Out; Divestment of Non-Core Assets in the UK East Midlands

CALGARY, ALBERTA--(Marketwire - Jan. 28, 2013) - Newton Energy Corporation (TSX VENTURE:NTN) (the "Company" or "Newton") announces it is focusing its activities on the Belvoir prospect as a core asset.

Belvoir Prospect

The Company believes that its efforts in its UK East Midlands licenses have produced the prospect of a core asset in Belvoir. The company has recently completed a re-interpretation of Belvoir and has derived an internal estimate of mean reserves which could potentially increase the existing 2 million barrels recoverable in accordance with its current reserve report . The Company recently exhibited the Belvoir prospect at the Prospect Fair in December.

The Belvoir prospect was drilled by British Petroleum in 1981 while testing slim-hole technology. The well produced several hundred barrels of oil before it waxed off.

Newton is currently seeking partners to appraise the Belvoir prospect which is wholly owned by Newton and located in PEDL 204 and PEDL 208 on the Company's UK East Midlands acreage. The Company is working with local stakeholders to facilitate further appraisal drilling of the field.

Divestment of Non-Core Assets in the UK East Midlands

Newton announces that it has entered into a Letter of Intent ("LOI") with a Canadian based independent energy company for the disposal of non-core assets within the UK East Midlands. Pursuant to the LOI, Newton will enter into a formal Sale and Purchase Agreement for the sale of both the Cropwell Butler Oilfield within Licence PEDL 254 and the north-western half of the adjacent Licence PEDL 204. This sale will include the transfer of the remaining exploration work program commitments on Licence PEDL 204. Newton will retain the south-eastern half of Licence PEDL 205, which contains both a portion of the undeveloped Belvoir Oilfield and the Plungar Oilfield. Newton will also retain ownership of PEDL 208, which contains the greater part of the Belvoir prospect.

Under the LOI, Newton is also granting this company an option to purchase the remainder of Licence PEDL 254 and the entire PEDL 255, together with the corresponding work program commitments in consideration of a payment of $325,000. Also, under the LOI, this company has agreed to cease all litigation against Newton for failing to offer the company pre-emption rights to PEDL 205. This option will expire April 30th 2013. Newton retains PEDL 208 and the SE of PEDL 204, together with one well commitment, which house the undeveloped Belvoir prospect.

The foregoing transactions will be subject to UK Governmental regulatory approval by the Secretary of State for Energy and Climate Change, the necessary approvals from Alkane Energy Limited under the Joint Operating Agreement for PEDL 254 and PEDL 255 and all other regulatory approvals including the TSX Venture exchange.

Merv Chia, Newton's Executive Chairman made the following comments: "Newton Energy remains committed to creating value for its UK East Midlands assets and is consolidating its activities to focus on delivering an appraisal well at Belvoir. With Belvoir, the Company believes it will have been rewarded for its dogged determination over the last 4 years in finding a significantly economic oilfield in its UK East Midlands licenses".

About Newton

Newton holds licenses in the UK East Midlands and a farm-in agreement in the Gambia Blocks A1 and A4. Newton believes its Belvoir prospect is a significant core asset and is in discussions with a number of potential farm-in partners to facilitate field appraisal.

Newton maintains offices in London, England and Calgary, Alberta.


This news release may contain certain forward-looking information and statements, including without limitation, statements pertaining to entering into formal agreements, future operations, receipt of all necessary regulatory approvals and obtaining consents from third parties. statements included herein, other than statements of historical fact, including are forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in Newton's disclosure documents on the SEDAR website at Newton does not undertake to update any forward-looking information except in accordance with applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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