Newport Exploration (NWX-V) Aug 21, '19 has provided an update on operations and reserves on licences in the Cooper basin, Australia, over which the company has a 2.5-per-cent gross overriding royalty (GOR). This information was reported by Beach Energy Ltd ("Beach") (ASX: BPT) in news releases dated 19th August, 2019, and reference should be made to their website for their interpretation and guidance.
Beach report reserves and contingent resources as at 30 June 2019. Categories presented for reserves on the Western Flank (which includes ex PEL's 91, 106 and 107, as well as for ex PEL 92 which is not subject to the Company's GOR), are 1P reserves (Proved) and 2P reserves (Proved and Probable). Reported reserves have been independently audited by RISC Advisory in accordance with the definitions and guidelines contained within the Petroleum Resources Management System (PRMS) as set out in SPE Reserves Auditing Standards in Australia.
Beach state that since reporting reserves as at 30 June 2018 there have been material changes to reserves driven by drilling, reservoir performance and cost reduction in the Cooper Basin based on existing well performance and new well locations identified across various fields. The revision of 2P reserves is due to improved well performance and the successful application of horizontal drilling technology.
Beach's reported strategy in FY2019 yielded extensions of the Bauer and Hanson oil fields and the Lowry gas field in the Western Flank, identifying additional drilling opportunities. Extensive further exploration and development work is proposed by Beach in FY2020.
SUMMARY OF WESTERN FLANK OIL OPERATIONS
The successful application of horizontal drilling technology targeting the McKinlay and Birkhead reservoirs helped increase net oil production to 5.2MMbbl, a 10% increase over FY2018.
Beach report that horizontal wells have the potential to add substantial value as they are over eight times more productive than vertical wells. Beach plan to increase the number of horizontal development wells in FY2020, with 16 being proposed.
A five well Bauer oil development campaign was completed with a 100% success rate in the fourth quarter FY2018. The aggregate 30 day initial production rate from four horizontal wells drilled on the Bauer was approximately 7,000 bpd.
The Hanson-7 oil development well confirmed a southern extension to the field. The well had a strong initial flow rate of 2,600 bopd and was converted to artificial lift at the end of FY2019 to bring forward production.
Highlights from the Beach Annual Report dated 30th June 2019 and from their FY2019 Full Year results as reported on 19th August 2019 are as follows;
Production
Record oil and gas production of 7.1MMboe, up 16% vs FY2018
Oil production increased 10% from FY2018
Reserves
Oil and gas had total 2P reserves revision of 22MMboe
This represents a 309% reserves replacement ratio
2P reserves now at 42MMbbl, up 7% from FY2018
2P reserves life increased from 7.0 years to 8.2 years
Drilling
34 oil wells were drilled in FY2019, including eight horizontal wells.
6 horizontal wells were being operated in FY2019
Productivity of horizontal wells averaged 8 times higher than vertical wells
Drilling and production rates improved
Appraisal Strategy
Four step-out appraisal wells discovered an easterly extension to the Bauer Field
Successful oil appraisal programs in Bauer and Hanson fields and resulted in field limits being increased
Field extensions were also delineated at the Lowry gas field
Further appraisal wells are planned at Bauer to define field structure and full field development
In FY2020 Beach plans on drilling 8 appraisal wells at Bauer and 15 development wells, including 7 horizontal wells
Follow-up appraisal of the Hanson and Kalladeina-Congony complex.
Record Production Targeted for FY2020
Beach are targeting 20,000+bopd production rate from PEL91/92 in FY2020
Beach are targeting 84 wells in FY2020, up from 42 in FY2019 and 26 in FY2018
Infrastructure Development
Beach propose to make significant investment in infrastructure expansion to handle high fluid volumes in anticipation of increased production from more wells and debottlenecking to unlock production
Record Investment in FY2020
Beach propose to spend $200M in FY2020
Up to 77 oil wells to be drilled, including 36 exploration and appraisal wells, and 41 development wells (including up to 17 horizontal wells)
SUMMARY OF WESTERN FLANK GAS OPERATIONS
Production
Beach report a 35% increase in Production over FY2018
Reserves
Beach report 2P reserves now at 16MMboe (an increase of 8MMboe over FY18)
Lowry field is a high liquids content gas field (50 bbl/mmscf)
Exploration
Successful gas exploration/appraisal programs in Lowry and Udacha South fields extended field limits from previous 2P reserves mapping in FY2019
There is the potential for further appraisal drilling at Lowry and Middleton in FY2020
Also in FY2020 Beach propose to drill 3 to 5 prospects delineated by a Spondylus 3D seismic survey to extend the proven stratigraphic play and test new exploration plays, with the aim to increase reserves at Middleton
Infrastructure Development
Liquids handling capacity was expanded at the Middleton facility increasing the new facility's raw gas capacity to 40MMscfd.
Guidance The Company receives its gross overriding royalty from Beach, who is not a reporting issuer in Canada, 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.
Beach prepares its petroleum reserves and contingent resources estimates in accordance with the Petroleum Resources Management System (PRMS) published by the Society of Petroleum Engineers. All estimates of petroleum reserves and contingent resources reported by Beach are prepared by, or under the supervision of, a qualified petroleum reserves and resources evaluator. Beach has engaged the services of RISC Advisory to independently audit Beach's petroleum reserves estimates prior to Beach reporting any updated estimates.
The Company is unable to forecast potential productivity for each well on and 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
info@newport-exploration.com
www.newport-exploration.com
www.beachenergy.com.au
www.santos.com |
