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Carnarvon Petroleum advances world-class Dorado discovery with appraisal to start next month

At the end of the quarter, the company held a strong cash balance of $93.3 million following the $50 million capital raise to fund appraisal and exploration activities.
Carnarvon Petroleum advances world-class Dorado discovery with appraisal to start next month
The Noble Tom Prosser drill rig that will be used in the appraisal program at Dorado

Carnarvon Petroleum Limited (ASX:CVN) has substantially advanced preparations during the March quarter to appraise the world-class Dorado discovery on WA’s North West Shelf.

Along with its Dorado majority joint venture partner and project operator Santos Ltd (ASX:STO), the company expects to begin appraisal of the Dorado-2 well in May 2019, which will be the first of three wells planned for the 2019 drill campaign.

Results from Dorado-2, Roc South-1 and Dorado-3 will be instrumental in preparing for a final investment decision (FID), which is expected late in 2020.

Carnarvon Petroleum managing director Adrian Cook said: “The Dorado-2 appraisal well is expected to commence in May 2019 and the Noble Tom Presser drill rig has been contracted for the 2019 drill program, which is nearby in Carnarvon basin drilling a well before it moves to the Dorado location.

“The Roc South-1 exploration well will also be added to the 2019 drill program and will commence immediately after the Dorado-2 well with this addition providing the potential to add to the hydrocarbons which have already been discovered at Dorado and Roc, highlighting the joint venture's continued focus on exploration.”

READ: Carnarvon Petroleum non-executive director buys more shares on market

Cook said that the $50 million placement, which was completed during the quarter, ensured the company had a robust financial position for the 2019 exploration and appraisal program.

Exploration expenditure during the quarter of A$1.2 million included technical work, planning and long-lead items for the 2019 Dorado and Roc South drill campaign and preparatory work on the Buffalo oil field redevelopment project.

Buffalo negotiations

Carnarvon has also completed its negotiations with the government of Timor-Leste regarding a Production Sharing Contract (PSC) for the Buffalo project.

Cook said: “With the fundamental terms of the PSC agreed in principal, Carnarvon now awaits the finalisation of the Maritime Boundary Treaty between the governments of Australia and Timor-Leste.”

At Dorado, there are also two additional standout oil prospects which have been de-risked following the Dorado discovery – the Pavo and Apus prospects, which are estimated to contain 82 million and 612 million barrels respectively of oil recoverable.

Carnarvon expects to provide further information on these prospects as work progresses.

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