Trading Symbol: NWX
(TSX-V)
VANCOUVER, BC, Feb. 10, 2021
/CNW/ - Newport Exploration Ltd ("Newport" or "the Company")
is pleased to announce its first quarterly cash dividend ("the
Dividend") in 2021 of $0.01 per share
to its shareholders of record at the close of business on
February 25th, 2021. The
Dividend payment date is March
12th, 2021. 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 $0.01/share dividend paid in
September 2020, the $0.03/share dividend paid in December 2020 and the $0.01/share dividend to be paid in March 2021 will be recorded in the Financial Year
ended July 31, 2021.
The Company's Dividend Performance, Annual Yields and Earnings
per Share since 2015 were documented in a Company News Release
dated November 12th, 2020.
Newport's dividend payout ratio,
being the cash dividends per share of common stock divided by the
earnings per share of common stock, compares favorably with that of
other yield stocks, particularly those in the energy sector.
Investors are cautioned that historical results are no guarantee of
future performance.
Management Strategy
Management has received overwhelming support from shareholders
for its dividend policy, and many shareholders have expressed the
sentiment that paying out a regular dividend at this time is a
priority. The dividend strategy has enabled the Company to retain a
margin of safety to maintain dividend distributions despite the
sector downturn in 2020, with the option of increasing the
quarterly dividend at any time.
The Company has an advantageous business model with a 2.5% Gross
Overriding Royalty ("GOR") over permits in the Cooper Basin,
Australia, with strong technical
fundamentals and with excellent operators in Beach Energy ("Beach")
and Santos Ltd ("Santos"). Beach is Australia's largest onshore oil producer with
a core focus on oil exploration and development activities in the
Cooper Basin. Newport has built in
exposure to significant potential growth at zero risk to
shareholders as there is no time limit or expiry date on the GOR
assets, and no cost to the Company to retain them.
Guidance
As reported in a Company News Release dated January 28th, 2021, Beach continue to
achieve extraordinary exploration success (particularly in oil
fields on ex-PEL 91), and have maintained very low production
costs. In doing so, Beach has achieved both reserve replacement and
positive cash flow. Also, Beach's exploration success, reported oil
reserves, and low production costs have allowed it to limit
spending without threatening future output from licenses in the
Cooper Basin, over which the Company has its GOR.
Although Beach's production from ex-PEL 91 for their
December 2020 quarter was below the
previous quarter, Beach has made no changes to full year production
guidance. Accordingly, Management is confident that shareholders of
the Company should continue to be rewarded with dividend
continuity. Beach plans to update their FY21 guidance with their
half year results on February
15th, 2021.
The recent increase in the price of Brent oil is encouraging.
According to Goldman Sachs in a research note dated February 2nd, 2021, tightening oil
supplies could push Brent oil prices as high as US$65/barrel by July
2021. As noted in previous Company news releases, Beach's
oil products command a premium price to the Brent oil price.
"The deficit between supply and demand that reached 2.3
million barrels a day in the fourth quarter of 2020 and large
projected draws in 2021 and 2022, are bullish for oil prices on
which Newport's dividends are
based, and shareholders should benefit from this as well as from
increased valuations in the energy sector", stated Ian Rozier, President and CEO of Newport.
Newport has no control over
operating decisions by Beach. Accordingly, this prevents the
Company from commenting on Beach's current financial status and/or
operating plans going forward. The Company recommends that
shareholders and potential investors access material information
relevant to the Company as 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. Beach's results and performance are also subject to regular
research reports by J.P. Morgan (Asia Pacific Equity Research) and
by RBC Capital Markets.
About Newport
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, both
major Australian oil and gas producers. The Company receives its
GOR from Beach which 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 currently has 105,579,874 common shares issued and
outstanding and $5.5 million in the
Treasury (comprised of cash, cash equivalents and short-term
investments), and no debt. The Company expects to receive the next
royalty payment from Beach prior to the payment of the first
quarterly dividend of 2021.
www.newport-exploration.com
www.beachenergy.com.au
www.santos.com
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 the
price of oil and fluctuations in currency markets (specifically the
Australian dollar) and future dividend payments. 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.
© 2020 Newport Exploration Ltd.
SOURCE Newport Exploration Ltd.