Dividend announced! I wonder if semi-yearly or annual would cut expenses so the amount could be increased. Just a thought.
" Newport Exploration Ltd ("Newport" or "the Company") is pleased to announce its third quarterly cash dividend ("the Dividend") of $0.01 per share to its shareholders of record at the close of business on August 26th, 2020. The Dividend payment date is September 10th, 2020.
Newport Exploration Ltd. Logo (CNW Group/Newport Exploration Ltd.)
The Dividend, fully approved by the Board of Directors, is not subject to any changes and has been designated as an "eligible dividend" for Canadian income tax purposes.
The COVID-19 pandemic exacerbated the ill-timed oil price war in early 2020 that resulted in the biggest drop in oil demand, as well as the biggest oil price drop, on record. This resulted in several producers shutting in wells, delaying projects and slashing investment in exploration and development. Global investment in future supply has collapsed, and returns for many producers have fallen below the cost of capital. Meanwhile, as reported in a Company News Release dated July 22nd, 2020, Beach continue to achieve exploration success (particularly on oil fields on ex PEL 91), and with their very low production costs, have achieved both reserve replacement and positive cash flow.
Management believes that based on Beach Energy Ltd.'s ("Beach") FY2020 Fourth Quarter Activities Report (dated 22nd July, 2020), recent exploration success and development of the licenses in the Cooper Basin over which the Company has its 2.5% Gross Overriding Royalty ("GOR"), shareholders should continue to be rewarded with dividend continuity. The move from an annual dividend to a quarterly dividend in 2020 has proved to be the right step as it has provided the Company with the flexibility to maintain its financial position during a very difficult period, while at the same time paying the full quarterly dividend as proposed, despite the exceptional level of uncertainty that still prevails.
The Company's strong balance sheet ensures that it has the ability to maintain regular quarterly dividend payments and possibly increase them in the future without taking on any debt or undertaking any equity financing.
Guidance
As stated previously by the Company (News Release dated July 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 Release, 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 current financial status and/or 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, therefore 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.
About Newport
Newport holds a 2.5% GOR on several oil and gas licences and permits in the Cooper Basin in Australia. These permits are currently being operated and explored by Beach and Santos Ltd. ("Santos"), both major Australian oil and gas producers.
The Company continues to strongly encourage shareholders and potential investors to access information released independently by Beach and Santos in order to keep current during exploration, development and potential production of all the licences subject to the Company's GOR. Investors are cautioned that historical results are no guarantee of future results."