Vancouver, British Columbia, October 31st, 2017.
Newport Exploration Ltd ("Newport" or "the Company") is pleased to provide an update on exploration activities on licences in the Cooper Basin, Australia on which the Company has a 2.5% gross overriding royalty. This information was reported by Beach Energy Ltd ("Beach") on October 31st, 2017, in a Quarterly Report for the period ended 30 September, 2017, and reference should be made to their website for their interpretation of the results and any plans to bring wells into production.
Ex PEL 91
Beach report oil production of 858 kbbl (9,330 bopd) was 5% higher than the prior quarter and benefited from broad ranging field activities and the Q4 FY2017 commissioning of the Bauer facility expansion.
Successful field activities included connection of six vertical wells (Arno-1, Bauer-20,-25, Bauer North-1, Pennington-5,-6) and Beach's first Western Flank horizontal well, Bauer-26. Bauer-26 was brought online in August 2017 at an initial free-flow, water-free production rate of approximately 450 bopd. Artificial lift will be installed at Bauer-26 in the second half of FY2018, which is expected to provide a material uplift in production from this well.
Production optimisation projects included installation of four beam pumps, two electric submersible pumps, and a flowline connecting the Hanson Field to the Bauer to Lycium pipeline. This flowline has enabled oil production to be pumped from the Hanson facility, eliminating the need for up to four truck movements per day.
Ex PEL 106
Beach report commissioning of compression at the Middleton facility in Q4 FY2017 enabled higher daily gas and gas liquids production rates in ex PEL 106. During the quarter, the Middleton facility reached a peak daily production rate of up to 4.8 kboe, which included gas liquids of more than 1.0 kboe.
Quarterly production included record monthly production achieved in September 2017. Flowline installations commenced for connection of Mokami-1 and Crockery-1 into the Middleton facility, with initial production expected in Q2 FY2018. Planning also progressed for a further expansion of the Middleton facility from, 25 MMscfd to 40 MMscfd. The Lowry-1 gas discovery in ex PEL 106 this quarter provided the required level of support to proceed with this expansion.
Ex PEL 632
Beach report ex PEL 513/632 contributed 27 kboe (net) of sales gas and gas liquids production, down 7% from the prior quarter due to natural field decline.
Ex PEL 91
Beach report it successfully completed its first operated horizontal well in the Western Flank. Bauer-26 comprised a lateral section of approximately 400 metres and targeted the McKinlay Member, a thin sandstone overlaying the Namur Sandstone, with accumulations covering areas larger than the Namur fields. The McKinlay Member is a proven oil reservoir, however has not been subjected to focused development. The formation is considered suitable for geosteered horizontal drilling, with potential for high daily production rates. Bauer-26 was landed successfully within the McKinlay Member and intersected net oil pay of approximately 350 metres. The well was brought online in August 2017 with an initial free-flow production rate of approximately 450 bopd. Review of further McKinlay development locations is underway, with follow-up wells planned for the second half of FY2018 and FY2019.
PRL 26 (Udacha Block)
Beach report it commenced its FY2018 operated gas exploration and appraisal campaign, which is focused on the Southwest Patchawarra (SWP) and Permian Edge (PE) play fairways. Both fairways contain combination structural and stratigraphically trapped conventional gas targets in the Patchawarra Formation.
The second exploration well of the campaign, Lowry-1, is located in the SWP play fairway approximately four kilometres northwest of the Middleton facility in PRL 26. The well targeted stratigraphically trapped liquids-rich gas in the sands of the Patchawarra Formation. Lowry-1 intersected 3.3 metres of net pay and was cased and suspended as a future producer. A two hour drill stem test was conducted over the interval 2,586 - 2,593 metres. The well flowed at 9.4 MMscfd on a 48/64" choke at 955 psi flowing pressure. Approximately 34 bbl of condensate was recovered at a rate of approximately 400 bopd. Analysis of test results confirms Lowry-1 as a new discovery which is not connected to nearby producing fields.
Ex PEL 91
The second well of a two-well oil appraisal campaign was completed in the Chiton Field, located approximately two kilometres south of the Bauer Field. The campaign was designed to appraise the extent and productivity of the McKinlay Member to the south and east of currently producing wells, where there has been limited appraisal drilling to date. The second well of the campaign, Chiton-5, was plugged and abandoned due to lack of commercial pay. Both wells were step-out prospects which helped define field boundaries. Results will assist with design of the final development plan for the Chiton Field.
Beach report it commenced its FY2018 operated Birkhead oil exploration and appraisal campaign. The Birkhead Formation is a proven oil reservoir in Western Flank fields, however has not been subjected to play-wide, focused exploration and appraisal. The FY2018 program aims to establish commerciality and size of existing discoveries, appraise field extensions, discover new accumulations and design cost effective development programs.
The first of up to three vertical exploration wells, Donington-1, was drilled to appraise a potential southern extension of the Kangaroo-1 discovery. The well intersected oil shows in the Birkhead Formation, however reservoir quality was insufficient for commerciality. The well was subsequently side-tracked to target seismic attributes further north. Similar reservoir quality was encountered and the well was plugged and abandoned.
The second vertical well of the campaign, Goldsmith-1, was drilled four kilometres north of Kangaroo-1 to test a potential northern extension of the Kangaroo Field. Oil shows were intersected in the target interval, however low reservoir quality resulted in side-tracking of the well approximately 400 metres west of the original target. The side-track did not intersect reservoir in the target interval and Goldsmith-1 was subsequently plugged and abandoned.
These vertical exploration wells were designed to test the true up-side of the Kangaroo Field. Based on the results, future drilling will be focused on the lower risk area in closer proximity to the Kangaroo Field. This will be appraised and developed along with existing Birkhead oil discoveries in the Stunsail, Pennington, and Stanleys fields. Drilling of development wells is planned to commence at the end of the first half of FY2018 upon completion of Beach's operated gas exploration campaign.
The Company receives a gross overriding royalty from the operator who is not a reporting issuer in Canada, and therefore, not required to comply with the requirements of NI 51-101 - Standards of Disclosure for Oil and Gas Activities
hence, 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 is unable to report on the potential productivity for each well and continues to strongly encourage shareholders and potential investors to access information released independently by Beach and Santos Ltd to keep current during exploration, development and production guidance of all the licences 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 future development of the Company's project. 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 forward-looking statements. Such 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. Many of these uncertainties and contingencies may 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.