Vancouver, British Columbia, July 27th, 2017. Newport Exploration Ltd (“Newport” or “the Company”) is pleased to provide an update on production, development and exploration activities on licenses in the Cooper Basin, Australia on which the Company has a 2.5% gross overriding royalty. This information was reported by Beach Energy Ltd (“Beach”) on July 27th, 2017, in their Quarterly Report for the period ended 30th June, 2017, and in their FY2018 Capital Expenditure and Production Guidance, also reported on 27 July, 2017.
PRODUCTION
Cooper Basin Western Flank Oil – ex PEL 91
Beach report that multiple field development projects progressed during the last quarter, including completion and connection activities, and artificial lift installations. Seven wells are on schedule to be brought online in the next two quarters, and four artificial lift installations are expected to be completed in the current quarter.
The Bauer facility expansion was commissioned during the last quarter, which increased water handling capacity by 60% to 120,000 bfpd. Beach report that this will provide production capacity to manage current activity as well as from new producing wells from future drilling campaigns. As reported in a previous news release by the Company dated April 27, 2017, the Bauer-24 and Bauer-25 development wells will be the first connections into the expanded facility and will contribute incremental oil production.
Western Flank Gas and Gas Liquids – ex PEL 106; ex PEL 632
Commissioning and compression at Middleton was completed and ramp up of production occurred during the quarter. Beach report that compression has enabled greater gas throughput, and maximum daily raw gas production from seven producing wells.
As reported in a News Release by the Company dated April 5th, 2017, Beach completed its four well Permian gas exploration and appraisal campaign. Crockery-1 encountered 7.2 metres of net pay across a 19 metre gross section and Mokami-1 intersected 10.1 metres of net pay across a 19.1 metre gross section. Completion and connection of Crockery-1 and Mokami-1 will occur in FY 2018.
Following the success of Crockery-1 and Mokami-1, Beach plan an expanded gas exploration drilling program of up to eleven wells in FY 2018.
DEVELOPMENT
Cooper Basin Western Flank Oil – ex PEL 91
A two-well oil development campaign commenced in the Pennington Field, located approximately 10 kilometres east of the Bauer Field. Reservoir simulation modelling identified potential for improved field commerciality through in-fill drilling to accelerate production. The wells are targeting the Namur Sandstone as a primary objective and the McKinlay Member and Mid-Namur Sandstone as secondary objectives.
As previously reported by the Company, the first well of the campaign, Pennington-5, intersected net oil pay of 2.2 metres in the Namur Sandstone and 1.8 metres in the McKinlay Member. The well also encountered oil shows in the Birkhead Formation.
Pennington-6, the second well of the drilling campaign, intersected four metres of net oil pay in the Namur Sandstone, four metres of net oil pay in the overlaying McKinlay Member, and one metre of net oil pay in the Mid-Namur Sandstone.
EXPLORATION
Chiton Field- ex PEL 91
A two well appraisal campaign commenced in the Chiton Field, located approximately two kilometers south of the Bauer Field. The campaign is designed to appraise the extent and productivity of the McKinlay Member to the south and east of currently producing wells where there has been limited appraisal drilling to date. Chiton-4, the first well of the campaign was plugged and abandoned due to lack of commercial pay.
Birkhead Oil Play Fairway-ex PEL 91
The Birkhead Formation is a proven oil reservoir in the Western Flank Fields of the Cooper Basin. However, it has not been subjected to play-wide, focused exploration and appraisal. Recent exploration by Beach has provided further encouragement for the fairway’s development potential. Beaches FY2018 campaign aims to establish the commerciality and size of existing discoveries, appraise field extensions, and discover new accumulations for future development. Due to reservoir variability, Beach consider that the Birkhead Formation is considered suitable for geo-steered horizontal drilling, with the potential for high daily production rates, low water cuts and long production tails.
Central Namur Oil Play Fairway-ex PEL 91
The Namur Sandstone is a developed reservoir which has underpinned past oil production on ex PEL 91. Two Namur exploration wells are planned in FY2018, with further targets to be identified for FY2019.
The McKinlay Member is a thin sandstone overlaying, but not in direct contact with the Namur Sandstone. The McKinlay Member is also a proven oil reservoir. However, it has not been subjected to focused exploration and development. McKinlay accumulations cover areas much larger than the underlying Namur fields, and Beach report that ongoing subsurface work shows significant potential for reserve additions. Bauer-26 is the first Western Flank McKinlay horizontal well and was spudded in early Q1 2018. Potential development wells in the Bauer and Chiton fields may also be drilled in FY 2018.
Southwest Patchawarra and Permian Edge Gas Play Fairways-ex PEL 106; ex PEL 107
Western Flank Gas acreage spans the Southwest Patchawarra (“SWP”) and Permian Edge (“PE”) play fairways. Both fairways contain structural and stratigraphically trapped conventional gas targets in the Patchawarra Formation. The SWP play fairway is Beach’s proven production area in ex PEL 106 and remaining prospects are considered relatively low risk targets. In FY 2018, six near field exploration wells are planned which aim to add reserves and accelerate production. Beach’s interpretation of recently acquired 3D seismic is progressing and seeks to extend the SWP play fairway to the south across ex PEL 107.
GUIDANCE
Beach report that with the completion of major infrastructure upgrades and with successful drilling campaigns, it has commenced a multi-year capital program which seeks to extract maximum value from their Cooper Basin acreage, and that by fully appraising the undeveloped reserve and prospective resource potential of the basin, the program provides the foundation for sustained activity and production over coming years.
The Company 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 licenses 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.