Post by
HHHAPPY on Oct 21, 2021 10:06am
Management reports further good news from Beach Energy.
Revenue increase due to gas price rise, will obviously assure dividend payment. May even increase next quarters dividend payout
("Newport" or "the Company") provides an update on guidance for licences in the Cooper Basin, Australia, over which the Company has a 2.5% gross overriding royalty ("GOR"). This guidance was reported by Beach Energy Ltd ("Beach") (ASX: BPT) in its FY22 First Quarter Activities Report dated 20 October 2021.
Newport Exploration Ltd. Logo (CNW Group/Newport Exploration Ltd.)
Realized Oil & Gas Prices
The average realized price of oil was AUD$110.3/bbl, up 11% on the previous quarter. This realized oil price is for Beach's quarter ended September 30th, 2021. Newport's first quarter ends October 31st, 2021 and therefore, based on the continued increase in oil prices through October, as well as the premium paid to Beach for Brent oil produced from the Western Flank, the Company anticipates a higher realized oil price for its first quarter GOR payment.
The realized gas price decreased 2% to AUD$7.5 per GJ, a 5% increase on the prior corresponding period.
Beach report their average realized price across all products was AUD$67.3/boe, a 3% increase over the prior quarter.
Production
Highlights of the first quarter production from the Western Flank in the Beach report are as follows.
Production from the Western Flank was 1.6 MMboe, down 10% on the prior quarter, with lower volumes offset by higher gas and associated liquids production. (Note: Western Flank includes the Company's GOR licences ex-PEL's 91, 106,107 and PRL 26, as well as licenses ex-PEL's 92, 104 and 111, over which the Company does not have a GOR). Western Flank oil production was 1.0 MMboe, down 18% on the prior quarter due to natural field decline, with no new wells tied-in during the quarter.
Higher than anticipated production rates and development activity during the second quarter of FY22 are expected to further reduce declines during the second half of its financial year.
Western Flank gas and gas liquids production was 574 kboe, up 12% on the prior quarter, following planned maintenance work at the Middleton gas processing facility.
The Company will update shareholders as soon as it is in receipt of any specific production forecasts for the GOR licences.
FY22 Drilling Activities
Beach commenced the FY22 oil drilling program with the Kangaroo 2 appraisal well drilled in ex PEL 91 to appraise the Birkhead reservoir of the Kangaroo field. The well intersected the oil-bearing Birkhead reservoir and was completed as a future water injector to support oil recovery from the field.
The FY22 gas exploration drilling program commenced in ex PEL 106 in late August 2021. Three wells were drilled by the end of the first quarter, yielding two discoveries at Rosebay 1 and Lowry South 1. Both discoveries will be completed as producers and tied-in to the Middleton gas processing facility in mid-FY22. The final well in the gas exploration campaign, Lowry Southwest 1, was drilling ahead at the end of the quarter.
A total of three horizontal development wells will be drilled in ex PEL 91 in the McKinlay reservoir of the Balgowan and Kalladeina fields. Beach anticipate drilling of up to 15 oil exploration wells in various licences throughout the Western Flank.
"Beach's previously announced anticipated field decline rates were based on existing reserves at that time with no consideration for new wells to replace oil reserves, so we are pleased with their recent success in oil and gas drilling on our GOR licences as well as their proposed drilling activities on ex PEL 91", stated Ian Rozier, President & CEO of Newport.
About Newport
The Company receives its GOR from Beach which is not a reporting issuer in Canada. Therefore, Newport is not able to confirm if disclosure satisfies the requirements of Canadian Securities legislation.
Newport has no control over operating decisions made by Beach and is not privy to exploration or production data derived by Beach during operations. Accordingly, this prevents the Company from commenting on operating plans going forward.
As always, the Company recommends that shareholders and potential investors access material information relevant to the Company as released independently by Beach and Santos Ltd in order to keep current during exploration, development and production of all the licenses subject to the Company's GOR.
The Company currently has 105,579,874 common shares issued and outstanding and approximately $4.8 million in the treasury (comprised of cash, cash equivalents and short-term investments) and no debt.
Details of the next GOR payment will be reported at the end of November or early December 2021.
Comment by
JayBanks on Oct 22, 2021 11:45am
I like the looks of the report too, tho I don't agree with increasing the royalty unless the number is really safe. Ive made a bunch of money in a short term play recently and am using some of the proceeds to try and get back in here with double my previous share count. (.44 cents is my current bid, I don't see this falling back much in day to day movement)