{"id":1135462,"date":"2019-08-28T09:36:21","date_gmt":"2019-08-28T14:36:21","guid":{"rendered":"http:\/\/oilandgas-investments.com\/?p=9982"},"modified":"2019-08-28T09:36:21","modified_gmt":"2019-08-28T14:36:21","slug":"every-junior-has-a-story-this-is-the-strangest-ever","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1135462","title":{"rendered":"Every Junior Has A Story. This Is The Strangest Ever."},"content":{"rendered":"

One of the strangest junior energy stories listed in Canada may become one of the best in late 2019.
\nNewport Explorations (NWX-TSXv)<\/strong><\/span> holds a 2.5% gross overriding royalty on several oil and gas permits in Australia, that are operated by Beach Energy and Santos Ltd.; both are major Aussie oil and gas producers.<\/p>\n

What that means is that Newport receives 2.5% of the revenue from any production on those blocks without having to pay for the cost of developing the assets.\u00a0 Newport shareholders get all this royalty money for doing NOTHING.<\/p>\n

This company does NOTHING except cash cheques.\u00a0 It\u2019s a great business, and has been for years.\u00a0 Royalties have been flowing since 2013 (I\u2019m going to outline it all for you below); it\u2019s an incredible cash cow.\u00a0 I have been a small shareholder for years, just to stay close to this amazing story.<\/p>\n

CEO Ian Rozier and CFO Barb Dunfield have done a great job shepherding value for shareholders in what has been a very turbulent time for other junior energy stocks.<\/p>\n

With no costs and only revenue, the company even spits out the occasional dividend.\u00a0 The last dividend was 5 cents per share, or $5,153,194 in the quarter ending October 31 2018. There is no powerpoint on the site to check historical dividends.<\/p>\n

But it may<\/span> become a regular dividend soon, which could<\/span> give the stock a big boost.<\/p>\n

I\u2019m writing this story now because I see that RBC Dominion \u2013 Canada\u2019s largest brokerage house \u2013 issued a bullish report on Beach Energy on August 19.\u00a0 And I saw in the last MD&A that Mr. Rozier\u2019s pay package just went up to $42,000 per month, and Ms. Dunfield\u2019s just went to $29,000 per month.<\/p>\n

This great team has kept the cash flow going for shareholders \u2013 the most recent quarterly shows that net income was $3.9 million for the last nine months, up from $2.7 million a year ago.\u00a0 Royalty revenue was $6.8 million for the nine months, up from $4.9 million a year ago.<\/p>\n

While management deserves all the credit they’re due, the light oil<\/span> assets have done really well.\u00a0 And the gas exposure is great as Aussie natgas prices \u2013 which were just $4\/gigajoule in 2015, before spiking to nearly $20 a couple years ago.\u00a0 They are now roughly $10.<\/p>\n

It\u2019s one of the most profitable natgas markets in the world.\u00a0 Domestic Aussie prices are so high because all their natgas is now exported to Asia \u2013 at lower prices than domestic ones now ($7.50 in Japan vs $10 in Australia)!\u00a0 Electricity prices in Australia \u2013 especially along the east coast \u2013 have more than doubled in the last four years.\u00a0 Production from the wet gas assets is also increasing.<\/p>\n

Yes, Newport could continue to be an amazing cash cow as production from these lands \u2013 and Aussie gas prices \u2013 each go higher.<\/p>\n

This is a GREAT story folks \u2013 it may be a great investment today, but one day it will be a great movie I\u2019m sure.\u00a0 Sit back and enjoy the read.<\/p>\n

In a very prescient move, way back in 1997, CEO Ian Rozier clearly wanted to transform Newport (then known as CVL) from a mineral exploration to oil and gas.\u00a0 He acquired interests in oil and gas permits covering over 75,000 km in Queensland, New South Wales and Northern Territory, Australia, as well as an oil exploration lease in New Zealand.<\/p>\n

Those aspirations effectively ended in 2002.\u00a0 On September 4, 2002, Newport issued a press release disclosing it was selling its remaining oil and gas interests in exchange for a petroleum royalty of 2.5% on those properties.<\/p>\n

\"1\"<\/a>\n<\/p>\n

\"2\"<\/a>
\nSource: Company website<\/em><\/p>\n

Here\u2019s what I believe Newport has:<\/p>\n