Trading Symbol: NWX (TSX-V)
VANCOUVER, May 13, 2020 /CNW/ - Newport Exploration Ltd
("Newport" or "the Company") is pleased to announce its second
quarterly cash dividend ("the Dividend") of $0.01 per share to its shareholders of record at
the close of business on May
28th, 2020. The Dividend payment date is
June 10th, 2020.
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.
Management believes that based on Beach Energy Ltd.'s ("Beach")
recent exploration success, development of the licenses in the
Cooper Basin over which the Company has its 2.5% Gross Overriding
Royalty ("GOR"), and their reported production costs as previously
reported by the Company (News Releases dated March 30th and April 22nd, 2020), shareholders should
continue to be rewarded with dividend continuity.
Amid signs that the oil market is beginning to rebound from the
unprecedented economic impact of Covid-19, many companies are
struggling with heavy net debt loads and have stated that they will
not be paying dividends this year, or will be paying them at a much
lower level. As reported in a Company news Release dated
March 10th, 2020, the
Company's strong balance sheet ensures that Newport has the ability to maintain regular
quarterly dividend payments with a reduced likelihood that the
quarterly dividend payout would be cut during any sector
downturn.
Despite the recent unprecedented plunge in oil prices,
Newport shareholders have escaped
the market downturn relatively unscathed. Although the Company is
not immune from the effects of the Covid-19 pandemic and the global
oil price collapse, management is confident that the Company will
be able to maintain dividend payments in 2020 without taking on any
debt or undertaking any equity financings. Investors are cautioned
that historical results are no guarantee of future performance.
The move from an annual dividend to a quarterly dividend in 2020
has proved to be the right step as it has provided the Company with
the flexibility to maintain its financial position during a very
difficult period, while at the same time paying the full quarterly
dividend as proposed, despite the exceptional level of uncertainty
that prevails.
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. Furthermore, the Company has paid out
more than 85% of after tax royalty receipts in dividends.
Guidance
As stated previously by the Company (News Releases dated
March 30th and
April 22nd, 2020), it is
material information for shareholders of Newport that Beach report that revenues from
their gas sales cover their group operating and stay-in-business
costs and that their reported break-even oil price is less than
US$0/bbl. As also reported in the
same Company News Release, Beach report that their crude sells at a
material premium to Brent.
Newport has no control over
operating decisions by Beach and Beach is not subject to compliance
with NI 51-102 Continuous Disclosure Obligations in Canada. Accordingly, this prevents the Company
from commenting on Beach's current financial status and/or
operating plans going forward. As always, the Company continues to
strongly recommend that shareholders and potential investors access
material information relevant to the Company as released
independently by Beach. This recommendation is particularly
relevant with regard to the current uncertainty in the global oil
markets.
The Company receives its gross overriding royalty 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.
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 Ltd.
("Santos"), both major Australian oil and gas producers.
The Company continues to strongly encourage shareholders and
potential investors to access information 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.
The Company currently has 104,429,874 common shares issued and
outstanding and $5.9 million in the
Treasury, comprised of cash, cash equivalents and investments, and
no debt.
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.