Company Information for Newton Energy

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Company Statement

Newton Energy (TSX-V, NTN) is a junior oil exploration company focused on the underdeveloped basin in the East Midlands Basin in the United Kingdom. Newton’s licenses, 100 per cent non-coal petroleum, comprise a contiguous 150,000 acres, east of Nottingham.

Operations and Technology

The blocks awarded to the Company in the 13th Round are Blocks SK63, SK64 (see note 1 below), SK73, SK74, SK83 and SK84, comprising a total of 150,000 acres of 100 per cent working interest in the rights.

The company is focusing on 6 drill ready oil prospects based on interpretation of previous oil shows, drilling, technical data and existing seismic. The wells are expected to encounter light sweet paraffinic oil at depths of less than 1100m. Production will be trucked to refineries less than 100km away. Each successful well will lead to two or more step out wells into the same pool. Each of the prospects has secondary targets. Each pool has analogues which will become more prospective with initial drilling success.

Initial Prospects - Primary Target:
1) Harlequin - Fractured Igneous Sill
Harlequin #1 was drilled 1952 had extensive shows in the Kilburn Sill. In fact, 10 gallons of oil were recovered from the core barrel. Drill stem testing recovered only oil cut mud. Extensive technical review has shown Harlequin to be analogous with Dineh-bi-Keyah, Arizona. After oil indications while drilling and oil cut mud on drill stem test, production was established at Dineh-bi-Keyah only after fracture treatment, of 750 bbl/d and up to 4000 bbl/d. The DBK pool has produced over 18 mmbbls. Newton is going to redrill the Harlequin #1 well and use the accumulated technical knowledge to complete the new well.

2) Belvoir - Ashover Sand
Belvoir #1 was drilled using micro-drill technology. The well was completed with 2” tubing inside 2 7/8” casing leaving very little room to produce the paraffinic crude. The re-drill location will utilise correct hole sizing and come up structure based on seismic interpretation.

3) Cropwell Butler - Kinderscout Sand
Cropwell Butler#2 , drilled in 1982 produced over 26,000 barrels of oil on long term test from the Kinderscout Sand , but had high water cuts, 75 per cent , as the well was completed in the water zone. Newton’s new well will produce this zone completing the oil zone only.

4) Bingham - Carb Limestone
Newton has interpreted seismic for the test well to come up structure from the Bingham #1 well. The Carboniferous Limestone in Bingham tested clean oil at approximately 7.5 bbl/d, but the lower water zone was not properly isolated for production testing. Newton’s new well will also utilize basic completion measures such as acid stimulation to develop this prospect. Success at this location will increase the prospectively of Granby and other local Carb Limestone highs.

5) Sedgebrook - Fractured Basement
The Cox’s Walk coal borehole encountered 215 ft of fractured andesite containing oil in fractures and vugs with a tarry zone at the base. The zone was not tested. Newton interprets this to be an up-thrown basement block with a fractured reservoir of similar type to those in Yemen. If this block is productive there are a series of blocks on trend which will become much more prospective.

6) Granby - Carb Limestone
Newton has interpreted a seismically defined fault bounded flower structure that was untested by previous drilling. Oil shows in the Carb Limestone make this the primary target.

Land Note
Blocks SK63 and SK64 are jointly awarded with Alkane Energy Plc., a company whose focus is mine gas recovery, coal bed methane extraction and electrical generation. Newton and Alkane have agreed in principle on a Joint Venture Agreement which will see 100 per cent  of the rights to the coal seams go to Alkane and 100% of the remaining strata go to Newton, with Newton as the operator of these two blocks. There are no conflicts over target zones or product extraction and each company will receive the rights which they sought in the license applications. Newton has no plans for mine gas or coal bed.

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