EARNINGS TOP 20 LISTED / Newport Petroleum Announces First Quarter
Operating Results
TSE SYMBOL: NPP
APRIL 16, 1998
CALGARY, ALBERTA--Newport Petroleum Corporation is pleased to
announce its first quarter operating results. The Company
participated in the drilling of 29 wells, 15 operated, 8 non
operated and 6 through farmout arrangements. The program resulted
in 18 gas wells, 3 oil wells and 8 dry holes for a success rate of
72 percent. Production volumes for the first quarter were
approximately 146 million cubic feet per day of natural gas and
6,000 barrels per day of oil and natural gas liquids. Newport has
suspended operations on a number of heavy oil properties in
Saskatchewan due to low oil prices which reduced the anticipated
first quarter oil production volumes by approximately 800 barrels
per day. First quarter financial results are expected to be
released before the end of May.
At Caroline, Newport acquired a total of 12,400 net acres of land
at Crown land sales on March 4 and April 15 and, as a result, has
a 50 percent working interest in approximately 20,000 net acres of
land on this play. The Newport-operated discovery well, 8-6-34-5
W5M, was drilled to a total depth of 4000 meters in late 1997 and
was completed in March and recently flow tested for two days at
restricted rates. Newport participated in shooting a significant
3D seismic program in the area to identify locations for
delineation drilling. Based on the discovery well and two
additional wells acquired in late 1997, the Company's independent
engineers have assigned gross proven and probable reserves of more
than 500 BCF of gas-in-place and over 40 million barrels of
natural gas liquids reserves to a portion of the play. A 50
percent working interest well is currently drilling at 7-19-33-5
W5M. Preliminary development plans indicate 10 to 15 additional
wells could be drilled on this play to continue exploration and
develop the full potential of our discovery. Several alternatives
to process gas at existing sour gas plants in the area are
currently being investigated.
In the Cutbank (Musreau) area, the Company acquired interests in
more than 16,600 acres of land with a 70 percent working interest
in January. As a result, Newport now has interests ranging from 8
percent to 100 percent in over 128,000 acres of land with an
average working interest of approximately 35 percent. The Company
has participated in the drilling of three deep wells to date:
5-25-62-6 W6M, 2-29-62-6 W6M and, most recently, 5-4-63-6 W6M
which was drilled to a total depth of 4,650 meters. All three
wells have been cased as potential gas wells. One well is on
production at a restricted rate of 20 million cubic feet per day
due to plant capacity limitations. Preliminary estimates indicate
that the discovery may contain in excess of 50 BCF of gas-in-place
per well. An 80 square mile 3D seismic program is currently in
progress to delineate the discovery. Once the seismic has been
interpreted, a detailed development plan will be prepared for this
project. It is anticipated that new gas plant facilities will be
constructed to process gas from this area but, as the gas is
sweet, additional wells are expected to be on stream by late 1998
or early 1999. The ultimate size of this discovery has yet be
determined, but the drilling results and existing 2D seismic
information indicate it may extend over a very large area.
At McLean Creek, the Newport-operated 5-18-75-22 W6M was cased as
a potential light oil discovery. Newport has a 50 percent working
interest before payout reverting to a 25 percent working interest
after payout in the discovery well which will be completed and
tested after spring breakup. The Company acquired interests in
over 5,000 net acres of land at the April 15th Crown land sale and
is planning a 3D seismic program to delineate the discovery and
identify additional potential in the area. Additional drilling
will take place as soon as surface conditions allow access.
At Raven River, Newport participated with a 50 percent working
interest in the drilling of 4-35-50-18 W5M to a total depth of
4,095 meters. The well has been cased as a potential gas well in
a shallow formation. Hydrocarbons were encountered in deeper
formations but reservoir quality was poor.
The significant discoveries at Caroline, Cutbank and McLean Creek
demonstrate Newport's continued exploration success and are the
result of the Company's ongoing strategy to look for impact plays
that will add large volumes of long life, high quality reserves
and result in significant future production volume increases. The
Company is continuing develop additional projects and has
exploration tests planned for the Wild River, Cranberry and
Firebird areas later this year.
Newport is pleased to announce the appointment of Byron Lutes as
Vice President, Engineering. Mr. Lutes joined the Company in mid
1994 and will have overall responsibility for drilling, production
and exploitation activities, and will also play an active role in
the development of new opportunities for the Company. |
