The Belize and Denmark-focused company said the proceeds of the placing would be applied to test and appraise the Rio Bravo 1 well which the company is currently drilling in Belize subject to a successful well-logging programme.

The well commenced drilling on 1 March, and to date all operations are on schedule and under budget. A total depth of 8,800 feet, targeting the Upper Jurassic Margaret Creek Formation, is expected to be reached by late April. Drilling results will be released once the total depth has been reached.

In the event that the well is not tested and appraised, the funds will be used to drill two wells targeting the Harboe and Jelling prospects at the company's Danica Jutland Project in Denmark; for seismic interpretation and competent person's report costs at the project; and additional general working capital purposes.

Interactive Investor view

Investors have reacted to the placing and inevitable dilution of share capital that will occur as a result, causing shares to fall 27% on Thursday morning.

The fall follows a collapse in the share price in February when traders aggressively sold off shares after taking fright when New World revealed it had plugged and abandoned a well in Belize. Although chief executive William Kelleher said the company was "highly confident that the elements required for a working hydrocarbon system are in place", investors were not reassured.

But there are positives. The well wasn't a duster - rather there just wasn't enough oil to make production economical - and New World argues that the information gained can be used to minimise the downside of the next well, which started drilling on 4 March.

The firm has 40 prospects, eight of them drillable - five in Belize and three in Denmark.

Combined they add up to almost 400 million barrels of oil and more than two trillion cubic feet of gas, with an indicative net present value of $6.4 billion (£4.2 billion). That's certainly not to be sniffed at.

And Thursday's announcement should provide some relief to the pressure on the shares in the long run as it clears one of the outstanding issues hanging over the company, that of its ability to complete the next stage of its programme.

Analysts at FoxDavies commented: "With [worries about the next programme] now gone, investors can look forward to three potential value-generating events, one in Belize and the other two in Denmark - a welcome position for the Company to be in."

Investor view

The reaction on Interactive Investor's discussion boards was less positive, with 'M33 Investor' commenting: "After you take off the funding cost, New only has £4,850,00 to play with... I don't see how you can drill two on-shore wells in Denmark for 4.8 million considering how much Belize has cost."

'SuzyBoozy' was similarly disappointed: "How likely is that [to hit a gusher] given the massive discount they've just placed at? If they had a compelling story to tell they wouldn't have had to more or less give themselves away."