Vancouver, British Columbia, February 1st, 2017.
Newport Exploration Ltd ("Newport" or "the Company") is pleased to provide an update on activities on ex-PEL's 91 and 106 in the Cooper Basin, Australia that are subject to the Company's 2.5% gross overriding royalty. This information was reported by Beach Energy Ltd ("Beach") in their Revised FY17 Guidance and Quarterly Report for the period ended 31 December 2016, and reference should be made to Beach's website for their interpretation of results and plans to bring certain wells into production.
As the Company only receives a gross overriding royalty from the operator, that is not a reporting issuer in Canada, and therefore is not required to comply with the requirements of NI 51-101 -Standards of Disclosure for Oil and Gas Activities
, the Company is not able to confirm whether 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 highlights of the Beach Revised FY17 Guidance with respect to the permits subject to the Company's royalty are as follows:
ADDITIONAL CAPITAL EXPENDITURES
Beach proposes to make additional discretionary capital expenditures as follows;
UPWARD REVISIONS TO FY2017 PRODUCTION GUIDANCE
- Installation of production facilities in ex-PEL 91 to bring the Kangaroo-1 oil well online and provide capacity for future discoveries.
- Two follow-up exploration wells in ex-PEL 91 to further appraise the Birkhead Formation oil play near the Kangaroo discovery.
- Nine operated exploration wells planned for FY17.
- Two development wells in the Pennington Field in ex-PEL 91 to optimise field commerciality and accelerate production.
- Seven operated appraisal/development wells planned for FY17.
Upward revisions to full year FY17 production guidance were made to reflect the following:
1. Outperformance from ex-PEL 91:
First half oil production from ex-PEL 91 exceeded expectations due to:
2. Outperformance from ex-PEL 106:
- Optimised production from the Bauer-23 development well, with initial rates in excess of 2,000 bopd.
- Better than expected performance from the Hanson Field following connection of development wells and installation of additional artificial lift.
- Natural field decline across the permit at levels below expectations.
First half gas and liquids production exceeded expectations due to:
3. Other operational factors
- Repair and maintenance work undertaken in Q4 FY16 which resulted in significant pressure re-charge at Middleton-1 and Brownlow-1 while the Middleton facility was offline for six weeks. Re-commencement of production in Q1 FY17 benefited from this pressure re-charge.
- Better than expected initial production from the Ralgnal-1 and Udacha-1 wells
Other operational factors influencing full year FY17 production guidance include additional oil and gas production from various field development activities, including:
OTHER PRODUCTION HIGHLIGHTS
- Bauer facility expansion: Fluid handling capacity to be increased to 120,000 barrels of fluid per day (+60% / 45,000 barrels), enabling a material increase in production capacity for ex-PEL 91 fields. Completion in Q3 FY17 is targeted.
- Middleton compression project: Gas compression to be completed at the Middleton facility in ex-PEL 106 to ensure maximum production capacity is maintained. Completion is expected in Q3 FY17, as well as connection of the Middleton East-1 and Coolawang-1 wells
- Full field development plans: Ongoing development activities include connection of well stock into the expanded Bauer facility, development drilling, installation of artificial lift and other initiatives.
The highlights of the Beach Quarterly Report (not previously disclosed elsewhere) with respect to the permits subject to the Company's royalty are as follows;
- Oil production of 950 kbbl (10,350 bopd) was 12% lower than the prior quarter.
- New production was brought online from the Hanson-4 and Stunsail-3 development wells, with Stunsail-3 the permit's only current producer from the Birkhead Formation.
- Additional lift installations were completed in the Hanson and Pennington fields, which provided initial incremental production of approximately 400 bopd.
- Work commenced on the Kangaroo production facility, with mechanical installation completed subsequent to Beach's quarter-end. The Kangaroo-1 exploration well commenced an extended production test in late January 2017.
- Bauer facility expansion continued, although some weather related delays did necessitate minor re-build of the site. Mechanical installation and commissioning of the expansion by the end of Q3 FY17 is targeted.
- A review of the September-1 oil exploration well drill results is currently underway and further production testing is planned to assess the resource size.
- Further mapping of the Poolowanna oil play will be undertaken through FY17, with potential appraisal and near-field exploration activities in FY18.
- Production of 200 kboe (2,150 boepd) was 24% lower than the prior period, mainly due to downtime from a lightning strike and shut-in requests from the Moomba processing plant operator.
(Note: With respect to the disclosure of "BOE's", in accordance with the Standards of Disclosure for Oil and Gas Activities (51-101, 5.14(d)), it should be noted that for the value of this to the Company's royalty payments, BOE conversion is based on an energy equivalent conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.)
- Production comprised sales gas of 130 kboe (down 28%), LPG of 30 kboe (down 39%) and condensate of 40 kboe (up 24%).
- Work continued on the Middleton gas compression project, with all equipment delivered to site and mechanical installation commencing subsequent to quarter-end. Compression will enable greater gas throughput as field decline, and is expected to provide peak production capacity of 3,700 boepd. The project is expected to be completed in Q3 FY17, and the Middleton East-1 and Coolawang-1 wells are expected to be connected during the quarter.
As reported in Beach's news release dated 1 February 2017, the Crockery-1 gas exploration well is the second of a four well Permian exploration and appraisal campaign within Beach's 100% owned ex-PEL 106 and ex-PEL 91 permit areas. Crockery-1 was drilled to test stratigraphic traps on the western flank of the Patchawarra Trough and targeted the Patchawarra Formation. Crockery-1 reached total depth of 2,774 metres on 28 January 2017 and encountered 7.2 metres of net pay across a 19 metre gross section. Testing is currently underway.
The Company is unable to report on the potential productivity for each well and the Company continues to strongly encourage shareholders and potential investors to access information released independently by Beach and Santos Ltd in order to keep current during the exploration and development of all the licenses subject to the Company's gross overriding royalty.
For further information contact:
Ian Rozier, Director and Chief Executive Officer
+1 604 685 6851
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, 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", "could", "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, which 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 the 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 developmental activities, the speculative nature of exploration and development, including the risk of obtaining necessary licences 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.