HIGHER THAN ANTICIPATED PRODUCTION RATES. CONTINUED INCREASE IN REALIZED OIL PRICE. SUCCESSFUL DRILLING ON EX PEL 91.

Trading Symbol: NWX (TSX-V)

VANCOUVER, BC, Jan. 26, 2022 /CNW/ - Newport Exploration Ltd ("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 Second Quarter Activities Report dated 25 January 2022.

Production

Highlights of the second quarter production from the Western Flank in the Beach report are as follows:

Production from the Western Flank was 1.3 MMboe, down 18% on the prior quarter, with lower oil, 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 0.9 MMboe, down 13% on the prior quarter due to natural field decline.

Higher than anticipated production rates and the connections of five development wells in the second and third quarter (three wells in ex PEL 91 which Beach expect to connect in its Q3),  are anticipated to further reduce decline rates in Beach's second half of fiscal 2022.

Western Flank gas and gas liquids production was 415 kboe, down 28% on the prior quarter, primarily due to planned maintenance work at the Middleton gas processing facility, followed by reduced production at Middleton due to an unplanned outage at Beach's Lowry well pad.

The Company will update shareholders as soon as it is in receipt of any specific production forecasts for the GOR licences.

Realized Oil & Gas Prices

The average realized price of oil was AUD$117.1/bbl, up 6% on the prior quarter. 

This realized oil price is for Beach's quarter ended December 31^st, 2021.  Newport's second quarter ends January 31^st, 2022 and therefore, based on the continued increase in oil prices through January, 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 second quarter GOR payment.

The realized gas price was AUD$7.6 per GJ, a 2% increase on the prior quarter.

Beach report their average realized price across all products was AUD$72.6/boe, an 8% increase over the prior quarter.  

Q2 FY22 Drilling Activities

On ex PEL 91, Beach completed two horizontal oil wells (Balgowan 7 & Kalladeina 15) that were cased and suspended as future producers, with a third horizontal well (Kalladeina 16) drilling ahead at quarter end. 

Beach report that drilling results were in-line with expectations, and they plan for all three horizontal oil development wells in ex PEL91 to be brought online in its Q3 2022.

Gas exploration well Lowry Southwest 1 and sidetrack DW1 were plugged and abandoned during the quarter.

Beach anticipate drilling of up to 11 oil exploration wells throughout the Western Flank, with additional wells planned after an assessment of the results.

"We are pleased with Beach's recent drilling success on our GOR licences, and with the three horizontal wells to be brought on line in Beach's Q3 2022; this should increase reserves and reduce previously anticipated field decline rates", 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 $4.0 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 February or early March 2022.

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, future dividends, 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.

SOURCE Newport Exploration Ltd.