Vancouver, British Columbia, October 29th, 2019.
Newport Exploration Ltd ("Newport" or "the Company") is pleased to provide an update on production, drilling activities, and proposed exploration and development 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 FY2020 First Quarter Activities Report dated 28th October, 2019, and in Beach's 'US and Canada Roadshow Presentation' dated 29th October, 2019, and reference should be made to their website for their interpretation and guidance.
Beach report, Western Flank quarterly production was 2.1 MMboe, 7% higher than the prior quarter and was driven by both strong gas and oil production. This is the fifth consecutive quarterly production increase reported by Beach.
Beach report, gross overage daily oil production from the Western Flank was 19.6 kbbl, up from 18.4 kbbl in 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-operated oil production increased 10% to 1,483 kboe.
A total of 11 new oil wells were brought online in the quarter, comprising six horizontal producers and five vertical producers.
The three Chiton horizontal oil wells drilled during the quarter on ex PEL 91 were brought on line in September following strong post drill results accelerating >45 kbbls into the quarter.
Artificial lift installations and conversions were undertaken at six wells and the conversion of producing well Bauer-29 on ex PEL 91 from a beam pump to an Electrical Submersible Pump ("ESP") resulted in a production rate of 3,000 bopd, more than double the beam pump rate from the well.
Beach continues to progress oil de-bottlenecking projects on the Western Flank to support the higher rates of oil production.
Beach report's Western Flank gas production was 514 kboe, 4% higher than prior quarter as the liquids-rich Lowry-3 and Lowry -4 both commenced production into the Middleton facility
At quarter-end, Beach has four gas wells on the Western Flank that are cased and suspended for future production after the Middleton area ten-well gas drilling campaign added eight gas wells to inventory. Production potential from wells is now in excess of the facility capacity.
Beach report eleven operated oil development wells drilled at a 100% success rate. This included six horizontal development wells across the Bauer, Chiton and Congony fields in ex PEL 91.
Beach report seven operated oil appraisal wells were drilled across the Bauer, Arno and Hanson fields in ex PEL 91.
Appraisal drilling at Bauer and Chiton on ex PEL 91 successfully identified additional development well locations. This included Beach's first horizontal oil appraisal well, Chiton-8, which was cased and suspended as a future producer, proving the concept of geo-steering horizontal wells to collect appraisal information.
The three Chiton wells, Chiton-6, Chiton-7 and Chiton-8 on ex PEL 91 have resulted in better definition of the structure of the Chiton field, directly influencing the proposed vertical well development campaign currently scheduled for December 2019.
Bauer Southeast-2 and Bauer Southwest-2 appraisal wells on ex PEL 91 were both cased and suspended confirming increased field volume to the south.
Beach report that a key task in FY2020 was to undertake a further round of appraisal drilling at the Bauer field in order to establish the field limit and finalise their full field development program. Beach also report "very positive results at the Bauer Northwest-2 and Bauer North-2 appraisal wells on ex PEL 91, which intersected the McKinley formation six metres and eight metres high to prognosis respectively", and were well above pre-drill expectations. Beach report that re-mapping of the Bauer field will be completed at the end of the appraisal drilling program and that reserves will be updated at the end of FY2020.
Beach report four gas exploration/appraisal wells finished drilling during the quarter.
In ex PEL 106 successful wells Crockery West-1 and Ralgnal East-1 completed the 10 well Western Flank gas drilling campaign in the Middleton area. Eight wells were cased and suspended for future production.
PROPOSED EXPLORATION AND DEVELOPMENT FOR FY2020
Beach report that a record year of investment and drilling activity is planned for oil in the Western Flank in FY 2020, with approximately AUD $200M to be spent on exploration.
Up to 77 oil wells are proposed; 36 for exploration and appraisal, and 41 development wells (including up to 17 horizontal wells).
Beach propose a continued roll-out of the Bauer appraisal strategy in ex PEL 91, as well as follow-up drilling at Bauer, Hanson and in the Kalladeina-Congony complex.
Four step-out appraisal wells at Bauer discovered an easterly extension to the Bauer field and in FY2020 Beach plan on drilling 8 appraisal wells at Bauer and 15 development wells, including 7 horizontal wells.
Potential further appraisal drilling at Lowry and Middleton is proposed on 3 to 5 prospects as delineated by a Spoondylus 3-D seismic survey to extend the proven stratigraphic play, as well as to test new exploration plays.
The Company receives its gross overriding royalty from Beach, who 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.
The Company is unable to forecast potential productivity for each well and continues to strongly encourage shareholders and potential investors to access information released independently by Beach and Santos Ltd.
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 may pertain to assumptions regarding Beach's drilling plans, the price of oil and fluctuations in currency markets (specifically the Australian dollar). Forward-looking statements are based upon a number of estimates and assumptions that, which are 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.