Trading Symbol: NWX (TSX-V)
VANCOUVER, BC, March 15, 2021 /CNW/ - Newport Exploration
Ltd ("Newport" or "the Company") is pleased to announce the payment
of its first quarterly cash dividend ("the Dividend") in 2021 of
$0.01/share to its shareholders of
record at the close of business on February
25th, 2021. As previously disclosed, the Company
proposes to continue with the payment of quarterly dividend
distributions, with the next payment scheduled for June, 2021.
Annual Dividend and 2021 Share Price Performance
The $0.01/share dividend paid on
September 10th, 2020, the
$0.03/share dividend paid on
December 11th, 2020 and
the first quarterly dividend payment in 2021 of $0.01/share dividend paid on March 12th, 2021, along with the
dividend to be paid in June, 2021, will be recorded in the
Financial Year ended July 31, 2021.
The Company's ability to return cash to shareholders is attributed
to the recurring free cash flow generated by its 2.5% Gross
Overriding Royalty ("GOR") from licences in the Cooper Basin,
Australia, operated by Beach
Energy Ltd ("Beach").
Since 2015 the Company has paid an average Annual Yield of 21%.
With Beach's exploration success, reported oil reserves and low
production costs, Management is confident that shareholders of the
Company should continue to be rewarded with dividend
continuity.
Investors are cautioned that historical results are no guarantee
of future performance.
Management Strategy
As reported in a Company News Release dated February 10th, 2021, Management's
dividend strategy has enabled the Company to retain a margin of
safety to maintain dividend distributions despite the sector
downturn in 2020, with the option of increasing the quarterly
dividend at any time, as it did in December, 2020 with the tripling
of the scheduled quarterly dividend amount.
Guidance
The Company has an advantageous business model with a 2.5% GOR
over permits in the Cooper Basin, Australia, with strong technical fundamentals
and excellent operators in Beach and Santos Ltd ("Santos"). Beach
is Australia's largest onshore oil
producer with a core focus on oil exploration and development
activities in the Cooper Basin. Newport 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 the Company
to retain or operate them.
As reported in a Company News Release dated January 28th, 2021, Beach continue to
achieve extraordinary exploration success (particularly in oil
fields on ex-PEL 91). Accordingly, Management is confident that
shareholders of the Company should continue to be rewarded with
dividend continuity.
Beach updated their FY21 guidance with their half year results
on February 15th, 2021,
and these were summarized in a Company News Release dated
February 17th, 2021.
The deficit between supply and demand that had reached 2.3
million barrels a day in the fourth quarter of 2020, and the large
projected draws in 2021 and 2022 are positive for oil prices. The
recent increase in the price of Brent oil is encouraging. Also, as
noted in previous Company news releases, shareholders are reminded
that Beach's oil products command a premium price to the Brent oil
price.
"The supply and demand dynamic as indicated by the declines
in US oil inventories, along with a global economic recovery from
the Covid pandemic all play out in the form of higher oil prices,
as is happening, and this should be reflected in our royalty
payments, and in turn, the dividends paid to
shareholders.", stated Ian
Rozier, President and CEO of Newport.
Newport has no control over
operating decisions made by Beach. Accordingly, this prevents the
Company from commenting on Beach's current financial status and/or
operating plans going forward. The Company recommends that
shareholders and potential investors access material information
relevant to the Company as released independently by Beach and
Santos in order to keep current during exploration, development and
potential production of all the licences subject to the Company's
GOR. Beach's results and performance are also subject to regular
research reports by J.P. Morgan (Asia Pacific Equity Research) and
by RBC Capital Markets.
About Newport
Newport holds a 2.5% GOR on
several oil and gas licences and permits in the Cooper Basin in
Australia. These licences and
permits are currently being operated and explored by Beach and
Santos both major Australian oil and gas producers.
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.
The Company currently has 105,579,874 common shares issued and
outstanding, and after this dividend to shareholders has
approximately $6.1 million in the
Treasury (comprised of cash, cash equivalents and short-term
investments), and no debt.
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, the price of oil, fluctuations in currency
markets (specifically the Australian dollar) and future dividend
payments. 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.