Vancouver, Canada. September 16, 2019. Newport Exploration Ltd (“Newport” or “the Company”) is pleased to announce that the Board of Directors has declared a special cash dividend (“the Dividend”) of $0.06 per share to its shareholders of record at the close of business on September 25, 2019. The Dividend payment date will be September 30, 2019. 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 Board of Directors has declared the Dividend based on a persistently low value being placed on the Company’s shares despite Beach Energy Ltd (“Beach”) reporting both increased 2P reserves and increased production from the Western Flank Permits (which includes ex PEL’s 91, 106 and 107) over which the Company holds its 2.5% Gross Overriding Royalty (“GOR”). The Company has an advantageous business model with a GOR over permits in the Cooper Basin with strong technical fundamentals and excellent operators. Management believes that based on the recent exploration and development of the licenses in the Cooper Basin as reported by the Company and Beach, shareholders will be rewarded with dividend continuity, further dividend growth, as well as capital appreciation.
Management has demonstrated good stewardship of shareholder capital and believes that stability, profitability, and paying an annual shareholder dividend has been a responsible corporate strategy which has enabled shareholders of Newport to avoid severely reduced or cancelled dividends, forced asset sales, share consolidations and a decline in share price that has occurred with several other Canadian energy companies in recent years.
The Company’s ability to pay dividends is very important to existing shareholders and potential investors. The current strategy of the Company is to continue to maintain a strong balance sheet to help it weather potential industry downturns. Notwithstanding the substantial dividend yields since 2014, the Company retains a margin of safety to maintain dividend payouts, and reserves the right to increase dividend payments from time to time if Management considers it appropriate.
Any future cash dividend policy is subject to the Board’s review, and decisions will be made based on royalty receipts at that time and always with the best interests of Newport shareholders in mind. This disciplined approach has resulted in market-beating returns compared to most other Canadian royalty paying energy stocks in recent years.
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.
The Company currently has 104,429,874 common shares issued and outstanding and $9.7 million in the Treasury, comprised of cash, cash equivalents and short-term investments.
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 is intended to provide readers with a reasonable basis for assessing the future performance of the Company. The words “believe”, “should”, “could”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule” and similar expressions identify forward-looking statements. Forward looking statements are statements and information regarding possible developments that are based on assumptions about future economic conditions and courses of action. Forward looking statements in this release include, but are not limited to, statements regarding future dividends. Forward-looking statements are based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to business, economic and competitive uncertainties and contingencies. 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. 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.
(c) 2019 Newport Exploration Ltd.