Newport Reports Production Increase of 19%. Continued Drilling Success on ex-PEL 91. Guidance Update.
Trading Symbol: NWX (TSX-V)
VANCOUVER, April 22, 2020 /CNW/ - Newport Exploration Ltd ("Newport" or "the Company") is pleased to provide an update on production and drilling activities, on licenses 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 ASX Announcement, FY2020 Third Quarter Activities Report dated 22nd April, 2020.
In light of the recent turmoil in global oil markets as a result of a drastic decline in demand caused by the effects of COVID-19, the Company strongly advises shareholders to access the Beach Third Quarter Activities Report that demonstrates the position of Beach, the operator of the GOR licences, going forward, which is in drastic contrast to many oil producers with higher operating costs and punishing debt loads.
PRODUCTION
Beach report Western Flank quarterly production was 2.6 MMboe, 10% higher than the prior quarter driven by strong oil production.
Beach report gross overage daily oil production from the Western Flank was 25kbbl, up 14% on the prior quarter. (NOTE: Western Flank includes the Company's GOR licences ex PEL's 91, 106, and 107, as well as licenses ex PEL's 92, 104 and 111, over which the Company does not have a GOR).
Despite the unprecedented global oil environment as a result of COVID-19 and the dramatic oil price volatility, Beach report that oil production from ex-PEL 91 increased 19% to 1,849 kboe. Ex-PEL 91 made a major contribution to the best ever quarter for Beach operated oil production.
A total of 8 new oil wells were brought online in the quarter, comprising six horizontal producers and two vertical producers.
Seven artificial lift projects were completed in the quarter which included an ESP (Electrical Submersible Pump) installation at bauer-39, Beach's longest McKinlay horizontal development well. Bauer-39 averaged approximately 2,900bbl/d on ESP through March.
At the end of Beach's third quarter four key oil wells are awaiting connection.
Beach report's Western Flank gas and liquids production was 491 kboe, down 10% on the prior quarter.
DRILLING
In the Western Flank, seven horizontal oil development wells were successfully drilled across the Bauer, Congony, Chiton and Kalladeina fields in ex-PEL 91, including Chiton-9 which is Beach's first horizontal well drilled into the highly deliverable Namur formation.
Appraisal drilling was highlighted by a 100% success rate in the three-well Balgowan oil appraisal campaign, with two wells cased and suspended as McKinlay producers and the third as a Birkhead producer.
GUIDANCE
As stated previously by the Company (News Release dated March 30th, 2020), it is material information for shareholders of Newport that Beach report that revenues from their gas sales cover their group operating and stay-in-business costs and that their reported break-even oil price is less than US$0/bbl. As also reported in the same Company News Release, Beach report that their crude sells at a material premium to Brent.
Newport has no control over operating decisions by Beach and Beach is not subject to compliance with NI 51-102- Continuous Disclosure Obligations in Canada. Accordingly, this prevents the Company from commenting on Beach's current financial status and/or 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. This recommendation is particularly relevant with regard to the current uncertainty in the global oil markets.
The Company receives its gross overriding royalty 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, 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.
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