Trading Symbol: NWX (TSX-V)
VANCOUVER, Dec. 12, 2019 /CNW/ - Newport Exploration
Ltd ("Newport" or "the Company") is pleased to report on proposed
corporate policy with respect to dividend payments to be made to
shareholders of record in 2020 and beyond, together with a summary
of Management's strategy.
Quarterly Cash Dividends to Commence in 2020
Going forward, Management proposes to pay a quarterly 'fixed
distribution' dividend of $0.01 per
share commencing in March, 2020, with subsequent dividend payments
every three months. Notwithstanding their recent success and
aggressive exploration and development plans proposed by Beach
Energy Ltd ("Beach") for the Western Flank and Cooper Basin for
FY2020, with the uncertainty that currently exists in the global
oil and gas sector, the Company considers it prudent to fix the
quarterly dividend at $0.01 per
share. The Company reserves the right to increase the
dividend payment from time to time. Sufficient funds will be
retained in the treasury to maintain the dividend schedule in the
event that royalty receipts are reduced for any reason.
Newport's Dividend
Performance Since 2015
The following summarizes the Company's dividend performance
since 2015;
During the year ended July 31,
2015, the Company paid a dividend of $0.10/share to shareholders of record as at
April 2, 2015. The average
share price for the year was $0.39,
which resulted in an Annual Yield of 26%. Earnings Per Share
("EPS") for the year was $0.03, for
an Annual Return of 333%.
During the year ended July 31,
2016, the Company paid a dividend of $0.10/share to shareholders of record as at
June 23, 2016. The average
share price for the year was $0.26,
which resulted in an Annual Yield of 39%. EPS for the year was
$0.02, for an Annual Return of
500%.
During the year ended July 31,
2017, the Company paid a dividend of $0.05/share to shareholders of record as at
June 30, 2017. The average
share price for the year was $0.27,
which resulted in an Annual Yield of 19%. EPS for the year was
$0.03, for an Annual Return of
167%.
During the year ended July 31,
2019, the Company paid a dividend of $0.05/share to shareholders of record as at
October 12, 2018. The average
share price for the year was $0.29,
which resulted in an Annual Yield of 17%. EPS for the year was
$0.06, for an Annual Return of
83%.
During the current fiscal year (July 31,
2020 yearend), the Company has already paid a dividend of
$0.06/share to shareholders of record
as at September 25, 2019. The
average share price from August 1,
2019 to December 9, 2019 was
$0.32, which resulted in a Yield of
19%.
Newport's dividend
payout ratio, being the cash dividends per share of common
stock divided by the earnings per share of common stock,
compares favorably with that of other yield stocks and
the Company has paid out more than 85% of after tax royalty
receipts in dividends. Furthermore, the dividend payments
have been covered by free cash flow with no dilution, incurring no
debt, and without selling any assets.
Investors are cautioned that historical results are no guarantee
of future performance.
Management Strategy
Management believes that stability, profitability, and paying
shareholder dividends has been a responsible corporate strategy and
recognizes that the Company's ability to pay over the long term is
very important to existing shareholders and potential investors.
The proposed dividend strategy will enable the Company to
retain a margin of safety to maintain dividend distributions in the
event of any sector downturn.
Management will continue to search for and identify other
potential assets for acquisition but refuses to rush into buying
anything just for the sake of it; this disciplined approach has
resulted in market-beating returns in the long run compared to most
other Canadian royalty paying energy stocks in recent years.
The Company has an advantageous business model with a Gross
Overriding Royalty ("GOR") over permits in the Cooper Basin,
Australia, with strong technical
fundamentals and with excellent operators in Beach.
The Company has built in exposure to significant potential
growth at zero risk to shareholders as there is no time limit or
expiry date on the GOR assets, and no cost to retain
them.
Management believes that based on the recent exploration success
and development of the licenses in the Cooper Basin over which the
Company has its 2.5% GOR, (Company News Release dated October 29th, 2019), shareholders will
be rewarded with dividend continuity, potential dividend growth, as
well as capital appreciation. Also, the Company's strong balance
sheet ensures that the Company has the ability to maintain regular
quarterly dividend payments with a reduced likelihood that the
proposed quarterly dividend payout would be cut during any sector
downturn.
Chu Chua
As stated previously (Company News Release dated March 6th, 2019) Management has
maintained its 100% interest in the Chu Chua copper-gold deposit in
Central British Columbia, Canada,
and continues to believe that it will pay off for the Company and
its shareholders as a result of entering into a joint venture to
develop it, or by way of an outright sale, or by a corporate
carve-out to a separate company for cash and/or shares. In Fiscal
2018 the Chu Chua project was impaired in accordance with
International Financial Reporting Standards ("IFRS"). Proposed
technical work on Chu Chua for 2019 has been deferred. However,
Management continues to believe in the merits of the property and
is prepared to continue with the Company's existing strategy and
wait for better market conditions in the sector.
Potential Takeover / Asset Sale
The Company reported (Company News Release dated March 6th, 2019) that it was aware of
rumors of a possible bid for the GOR and/or a possible hostile
takeover attempt of the Company as a way of acquiring the GOR. No
formal offer for the GOR was made. As shareholders are aware,
hostile activist campaigns are increasingly 'homing in' on
companies with valuable assets to acquire, cash flow to dispose of,
and businesses to separate. Management and Directors control
approximately 36m shares (35%) of the
Company and these shareholdings align the interest of Management
with all shareholders and should reassure shareholders and
potential investors that Management is able to secure the long-term
interest of all shareholders and not succumb to corporate predators
hungry for quick returns. Management is confident that the majority
of shareholders would support the Board in order to safeguard the
Company's treasury, its assets, future cash flows, and shareholder
dividends. Any offer, hostile or otherwise, for the Company and/or
its assets, would be subject to an independent fairness opinion and
shareholder approval.
In summary, Management propose to retain the Company's several
GOR oil and gas assets in Australia as well as the Chu Chua copper-gold
asset in Canada, and believe that
stability, profitability, and paying shareholder dividends has been
a responsible corporate strategy. The decision to move
dividend payments to a quarterly dividend schedule going forward
improves on this strategy.
Guidance
With the aggressive drilling and development program planned by
Beach for both oil and gas permits, (Company News Release dated
29th October, 2019), and Beach's planned increase in
production from Ex PEL 91 over which the Company holds its 2.5%
Gross Overriding Royalty (Beach News Release dated August 19th, 2019), the Company
anticipates continuity of production and associated royalty
revenues.
The Company continues to strongly encourage shareholders and
potential investors to access information released independently by
Beach and Santos Ltd to keep current during exploration,
development and potential production of all the licenses subject to
the Company's GOR.
Neither the 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 accuracy or
adequacy of this news release.
Cautionary Statement on Forward-Looking
Information
This news release is intended to provide readers with a
reasonable basis for assessing the future performance of the
Company. The words "believe", "should", "could", "expect",
"anticipate", "contemplate", "target", "plan", "intends",
"continue", "budget", "estimate", "may", "will", "schedule" and
similar expressions identify forward-looking statements.
Forward-looking statements may pertain to assumptions regarding
future dividends, the price of oil and fluctuations in
currency markets (specifically the Australian dollar).
Forward-looking statements are based upon a number of estimates and
assumptions that, which are considered reasonable by the Company,
are inherently subject to business, economic and competitive
uncertainties and contingencies. Factors include, but are not
limited to, the risk of fluctuations in the assumed prices of oil,
the risk of changes in government legislation including the risk of
obtaining necessary licences and permits, taxation, controls,
regulations and political or economic developments in Canada, Australia or other countries in which the
Company carries or may carry on business in the future, risks
associated with developmental activities, the speculative nature of
exploration and development, and assumed quantities or grades of
reserves. Readers are cautioned that forward-looking statements are
not guarantees of future performance. There can be no assurance
that such statements will prove to be accurate and actual results
and future events could differ materially from those acknowledged
in such statements.
The Company disclaims any intention or obligation to update or
revise any forward-looking statements whether as a result of new
information, future events or otherwise, except to the extent
required by applicable laws.
SOURCE Newport Exploration Ltd.