Vancouver, British Columbia, February 20th, 2018.
Newport Exploration Ltd ("Newport" or "the Company") is pleased to provide an activity update on licences in the Cooper Basin, Australia over which the Company has a 2.5% gross overriding royalty. Beach Energy Ltd ("Beach") reported the update in their Half Year Report for the six months ended 31 December 2017 (the "Half Year Report") and, in their FY2018 Half Year Results presentation (the "Presentation"). Reference should be made to Beach's website for their interpretation of results and any plans to bring wells into production.
Beach report FY2018 Cooper Basin production guidance increased to 10.6-11.0 MMboe (from 10.0-10.6 MMboe).
Western Flank Oil - ex PEL 91
Beach report that oil production of 1,679 kbbl was 18% lower than the prior corresponding period, with natural field decline partially offset by field development and production optimisation activities and commissioning of the Bauer facility expansion in Q4 FY2017. Seven vertical wells and Beach's first Western Flank horizontal well, Bauer-26, were connected. Bauer-26 commenced production in August 2017 at an initial free-flow, water-free rate of approximately 450 bopd. A beam pump was commissioned in mid-December and resulted in incremental daily oil production of approximately 600 bbl. Production optimisation projects included installation of a further five beam pumps, five electric submersible pumps, a flowline connecting the Hanson Field to the Bauer to Lycium pipeline, and completion of the Bauer flowline enhancement project.
Western Flank Gas and Gas Liquids - ex PEL 91, ex PEL 106
Beach report that gas and gas liquids production from ex PEL 91 and ex PEL 106 of 633 kboe was 33% higher than the prior corresponding period. Production benefited from two new wells brought online in December 2017, Mokami-1 and Crockery-1, and commissioning of compression at the Middleton facility in Q4 FY2017, which enabled higher daily gas and gas liquids production rates. (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.)
Western Flank Gas and Gas Liquids - ex PEL 513/632
Beach report that ex PEL 513 / 632 contributed 51 kboe (net) of sales gas and gas liquids production, 43% lower than the prior corresponding period due to natural field decline. (Newport only has a gross overriding royalty on ex PEL 632 and Beach do not break down the production between ex PEL 513 and 632)
Bauer-26 (ex PEL 91)/Bauer Field
Beach reports it successfully drilled 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 well commenced production in August 2017.
Field Development Activity
Full details of Beach's overall development activity across the Cooper Basin are documented in their Presentation.
Cooper Basin Capital Program
Beach report, per its Cooper Basin Capital Program, the following key objectives:
Western Flank Oil
Western Flank Gas
- Focus on core play fairway exploration and development (Birkhead, Namur, McKinlay)
- Full field appraisal and development plans to maximise recoveries and accelerate production
- Horizontal oil drilling to optimise recoveries from Birkhead and McKinlay formations
EXPLORATION AND APPRAISAL
- Focus on core play fairway exploration (Southwest Patchawarra and Permian Edge)
- Complete Middleton Phase 1 expansion to 40 MMscfd (commissioning by end of FY2018)
- Middleton Phase 2 expansion to 50 MMscfd under consideration
Exploration and appraisal drilling on licenses that are subject to the Company's royalty, and disclosed by Beach in its Half Year Report were disclosed in the Company's news releases dated August 2, 2017, September 6, 2017, October 4, 2017, November 1, 2017, December 6, 2017 and January 10, 2018. For further information, please refer to those news releases, or Beach's Half Year Report.
The Company receives its 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 forecast 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.