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Jun 02, 2014
$2.998 MILLION RECEIVED FROM OIL AND GAS ROYALTIES IN AUSTRALIA AND TWO NEW FIELDS ON PEL 91 DEFINED
Vancouver, BC, June 2nd, 2014. Newport Exploration Ltd. the "Company"), reports that on May 30, 2014 the Company received both notice and payment of AUD $2.977 million (approximately $2.998 million) in royalty proceeds for the period February 2014 to April 2014 from Beach Energy related to exploration production associated with the Company's oil and gas royalty interests in the Cooper Basin, Australia.
The Company has received approximately $6.8 million in royalty payments over the first 5 months of 2014.
On Friday, May 30, 2014, Drillsearch issued a news release on the successful Pennington-1 step-out exploration well on PEL 91, which has been cased and suspended for future production.
On June 2, 2014, Beach Energy issued two news releases on the Stunsail-1 and Pennington-2 exploration wells on PEL 91 which have both been cased and suspended for future production. New requirements under Chapter 5 of the ASX Listing Rules require that Beach and Drillsearch reporting on hydrocarbon accumulations must detail the conceptual development plan for the discovery. Accordingly, Beach also released the following information on the two new fields:
"Pennington Field Reserves Estimation and conceptual development plan
Commercial productivity of the McKinlay and Namur reservoirs is proven in offset fields within PEL 91. The Pennington field is analogous to the commercial offset fields including Bauer, Chiton, and Hanson. As such, Beach has a high degree of confidence in the commercial productivity of the McKinlay-Namur reservoirs at Pennington. Beach has carried out a preliminary economic evaluation of the project using costs based on analogous projects and internal company oil price assumptions to confirm its commercial viability.
Beach believes that the Pennington field can be developed with a tie-back of producing wells via a common flow line to the Bauer production facility. Pending joint venture approval, and dependant on results from further appraisal drilling, it is anticipated that the development of Pennington will cost approximately $6 million and will take place in the June quarter 2015.
Using a proposed tie-back development model, Beach estimates preliminary gross undeveloped reserves from the McKinlay, Namur and Mid-Namur reservoirs as follows:
1P: 1.5 million barrels of oil ("MMbbls")
2P: 2.7 MMbbls
3P: 5.3 MMbbls
Stunsail Field Reserves Estimation and Conceptual development plan
Commercial productivity of the McKinlay and Namur reservoirs is proven in offset fields within PEL 91. The Stunsail discovery is analogous to the commercial offset fields including Bauer, Chiton, and Hanson. As such, Beach has a high degree of confidence in the commercial productivity of the McKinlay-Namur reservoirs at Stunsail-1. Beach has carried out a preliminary economic evaluation of the project using costs based on analogous projects and internal company oil price assumptions to confirm its commercial viability.
Beach believes that Stunsail-1 can be developed using a standalone production facility, with oil potentially transported by truck to either the Bauer facility or the Lycium hub. Should there be further exploration and appraisal success in the proximity of Stunsail-1, this discovery has the potential to be developed with other fields in the same area through a pipeline to other facilities in PEL 91.
Pending joint venture approval, and dependant on results from further exploration, appraisal and development drilling, it is anticipated that the development of a standalone facility for the Stunsail field will cost approximately $4 million and take place in the June quarter 2015.
Also pending joint venture approval is Stunsail-2, an appraisal well that is scheduled to be drilled in the September quarter 2014.
Using a standalone development model, Beach estimates preliminary gross undeveloped reserves from the McKinlay, Namur and Mid-Namur reservoirs as follows:
1P: 1.0 MMbbls
2P: 1.6 MMbbls
3P: 2.5 MMbbls"
Beach reports that the results of Stunsail-1, Pennington-2, Bauer-12, Bauer-13 and Chiton-3 wells on PEL91 are all expected to be reflected in Beach's 30th June 2014 reserves update.
With the information released by Beach and Drillsearch over the last three months, the Company remains confident that the activities currently underway on PEL 91 relating to upgrading of the oil handling infrastructure, identified suspended wells and the new Pennington and Stunsail fields being brought into production should result in a significant growth in future royalty proceeds, although the timing and the associated revenues of such royalty growth and proceeds cannot be predicted.
The Company continues to strongly encourage shareholders and potential investors to access information released independently by both Beach and Drillsearch in order to keep current through this transformational period.
All royalty payments received by the Company will continue to be reported in our filed financial statements.
For further information contact:
Ian Rozier, Director and Chief Executive Officer
The TSX Venture Exchange has not reviewed and does not accept responsibility for the accuracy or adequacy of the contents of this news release.
Cautionary Statement on Forward-Looking Information
This press release, which contains certain forward-looking statements, is intended to provide readers with a reasonable basis for assessing the financial performance of the Company. All statements, other than statements of historical fact, are forward-looking statements. The words "believe", "should", "expect", "anticipate", "contemplate", "target", "plan", "intends", "continue", "budget", "estimate", "may", "will", "schedule" and similar expressions identify forward looking statements. These forward-looking statements pertain to assumptions regarding the price of oil, fluctuations in currency markets (specifically the Australian dollar and the U.S. dollar), the future funding of the Company's projects, and the future development of the Company's projects. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to, the risk of fluctuations in the assumed exchange rates of currencies that directly impact the Company, such as Canadian dollar, Australian dollar and U.S. dollar, the risk of fluctuations in the assumed prices of oil, the risk of changes in government legislation, taxation, controls, regulations and political or economic developments in Canada, the United States, Australia or other countries in which the Company carries or may carry on business in the future, risks associated with development activities, the speculative nature of exploration and development, including the risk of obtaining necessary licenses and permits, and assumed quantities or grades of reserves. Many of these uncertainties and contingencies can affect the Company's actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company. 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.