Newport Reports on Beach's Fourth Quarter Production. Continued Drilling Success on Ex-PEL 91
VANCOUVER, BC, July 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 Fourth Quarter Activities Report dated 22nd July, 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 Fourth 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. In their Announcement dated July 22nd, 2020, Beach report that they ended FY2020 with $50 million net cash and with access to $500 million in liquidity.
PRODUCTION Beach report Western Flank quarterly production was 2.6 MMboe, unchanged on the prior quarter.
Beach report gross overage daily oil production from the Western Flank was 23.9kbbl, down 4% 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).
Beach report that oil production from ex-PEL 91 decreased only 4% to 1,805 kboe. Ex-PEL 91 continues to make a major contribution to Beach's operated oil production.
Another 8 new oil wells were brought online in the quarter, comprising six horizontal producers and two vertical producers.
Beach report that six artificial lift projects were completed in the quarter, with two additional projects completed subsequent to quarter end.
An ESP (Electrical Submersible Pump) installation at Bauer North 2 was completed at 1200 bpd.
Bauer 51 and Bauer 55 were both brought on-line with an initial rate of 800bopd. (As previously reported in a Company News Release dated April 22nd, 2020, Beach's longest McKinlay horizontal development well, Bauer-39, averaged approximately 2,900bbl/d on ESP through March).
At the end of Beach's fourth quarter seven oil wells are awaiting connection.
Beach report's Western Flank gas and gas liquids production was 568 kboe, up 16% on the prior quarter.
DRILLING Highlights of the fourth quarter drilling by Beach on ex-PEL 91 were;
Seven horizontal oil development wells were successfully drilled on the Bauer Field, including the Bauer 55 horizontal development well which extended the Bauer North structure to the north.
Five appraisal wells were drilled across the Bauer North, Congony, Kalladeina and Kalladeina North Fields. Two producers were added;
- Kalladeina 11 extended the Kalladeina Field limit to the south-east.
- Bauer North 5 was cased and suspended as a future Birkhead formation producer.
GUIDANCE As stated previously by the Company (News Releases dated March 30th and April 22nd, 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. Also reported in the same Company News Releases, Beach report that their crude sells at a material premium to Brent.
Newport has no control over operating decisions by Beach. Accordingly, this prevents the Company from commenting on Beach's 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, thereforeNewport 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.