Trading Symbol: NWX (TSX-V)
VANCOUVER, BC, Jan. 28, 2021 /CNW/ - Newport Exploration
Ltd ("Newport" or "the Company") is pleased to provide an update on
production and drilling activities on licences in the Cooper Basin,
Australia over which the Company
has a 2.5% gross overriding royalty ("GOR"). This information was
reported by Beach Energy Ltd ("Beach") (ASX: BPT) in its FY21
Second Quarter Activities Report for the period ended
31st December, 2020 ("Beach Quarter Report").
PRODUCTION
Highlights of the second quarter production from the Cooper
Basin and Western Flank reported by Beach were:
Production from the Western Flank was 2.3MMboe, down 4% on the
prior quarter, with higher gas and gas liquids offsetting lower oil
production. (Note: Western Flank includes the Company's GOR
licences ex-PEL's 91, 106,107 and PRL 26, as well as licenses
ex-PEL's 92, 104 and 111, over which the Company does not have a
GOR).
Western Flank gas and gas liquids was 586 kboe, up 15% on the
previous quarter.
Gross average daily oil production from ex-PEL 91 was
16.9kbbl/day, down 10% on the previous quarter.
Beach report their average realized price across all products
was AUD$53.4/boe, a 3% increase over the prior quarter.
The average realized price of oil was AUD$65.3/bbl, up 1%
on the previous quarter.
A total of eight new wells were brought online during the
quarter, with seven horizontal producers and one vertical
producer.
Four vertical oil producers will be brought online in
Beach's Q3 FY21.
A further four horizontal wells will also be brought online in
Beach's Q3 FY21.
Ex-PEL 91 continues to make a major contribution to Beach's
operated oil production.
DRILLING
Highlights of the second quarter drilling by Beach on ex-PEL 91
were:
Beach achieved a 100% success rate on ex-PEL 91 with the Bauer
67 and 68, Chiton 12, Kalladeina 12, 13 and 14, and Balgowan 5 and
6 wells, all being cased and suspended as future producers.
Also on ex-PEL 91, Bauer 69 is drilling ahead at
quarter-end.
These very positive drilling results follow Beach's successful
drilling and development results in the Bauer Field as reported in
the Company News release dated October 26th,
2020.
GUIDANCE
In light of the turmoil in global oil markets in 2020 as a
result of the oil price war between Saudi
Arabia and Russia, as well
by a drastic decline in demand caused by the effects of the
COVID-19 pandemic, the Company strongly advises shareholders
to access the Beach Quarter Report and previous Company News
Releases that demonstrate the strong operational and financial
position of Beach (the operator of the GOR licences).With Beach's
reported production and continued exploration success (particularly
on the Bauer Field on ex-PEL 91), Beach has continued to achieve
reserve replacement and positive cash flow throughout a period of
high disruption for the energy sector.
As noted in previous Company news releases, Beach's oil products
command a premium price to the Brent oil price. Shareholders and
investors are also reminded that Beach's Quarterly Reports do not
coincide with the Company's quarterly royalty payment periods. For
example, the Beach Quarterly Report referenced in this news release
covers production and drilling for the three month period
October-December 2020, whereas the
current quarterly royalty payment period for Newport covers sales/production for the three
month period November 2020-January
2021. Accordingly, the next royalty payment will be based on
oil prices for this same period. This is particularly relevant for
next royalty payment as oil prices increased significantly in
January 2021 such that the average
realized oil price by Beach on which the royalty payment is based
is expected be higher than stated for their Q2 FY21.
Several industry analysts are of the opinion that even without
any increased demand from the aviation sector in 2021, oil demand
will increase through 2021.
"With Beach's successful drill programs and several
additional wells being brought online on ex-PEL 91, the Company is
well positioned to benefit from an increase in demand and related
oil price rises in 2021, and our shareholders should benefit from
both dividends and an attractive valuation, as Newport has a regular revenue stream, no
direct exploration risk, no direct operational risk, and no
debt", stated Ian Rozier,
President and CEO of Newport.
Newport has no control over
operating decisions by Beach. Accordingly, this prevents the
Company from commenting on Beach's operating plans going forward.
As always, the Company continues to strongly recommend that
shareholders and potential investors access material information
relevant to the Company as released independently by Beach.
The Company receives its GOR from Beach which is not a reporting
issuer in Canada, therefore
Newport is not able to confirm if
the disclosure satisfies the requirements of NI 51-101 - Standards
of Disclosure for Oil and Gas Activities, or other requirements of
Canadian securities legislation.
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
Beach's drilling plans, 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.
© 2020 Newport Exploration Ltd.
SOURCE Newport Exploration Ltd.