Energy sector company Carnarvon Petroleum Limited (ASX: CVN) released its quarterly report for the three months ended 31 March 2019. The company along with its Joint Venture partner, Santos, has moved quickly to appraise the Dorado discovery made in 2018.
The Group expects to commence Dorado-2 appraisal well in May 2019, targeting the hydrocarbon columns in a down-dip region from the Dorado-1 discovery. The core objective of the program is to define the standard properties of the reservoir and fluid while digging more information on the extent of the hydrocarbon accumulations in that region.
As per the company’s information, a Noble Tom Prosser drill rig which is currently in the nearby Carnarvon basin drilling has been contracted to move next to the Dorado location for its 2019 drill program.
Carnarvon intends to drill ‘Roc South-1 exploration well’ immediately following the completion of the Dorado-2 well as it has demonstrated the similar characteristics and is close to Dorado. It is even expected to have an identical oil sourcing mechanism with its prospects underlying the high probability of success of 63%.
With respect to its 100%-owned Buffalo Project, Carnarvon announced that discussion on the Production Sharing Contract (PSC) between the company and the Timor-Leste government is now materially complete. The discussions reportedly highlighted that both the parties target to achieve first oil at the earliest and have agreed to the fundamental terms of the contract.
However, the completion of the Maritime Boundary Treaty (Treaty) between the Governments of Australia and Timor-Leste as well as the finalisation of the PSC with the Government of Timor-Leste, remains pending.
In order to accelerate the project immediately after the finalisation of the Treaty, the company is ramping up all of its workflows while seeking expressions of interest from potential partners to the Buffalo project during the quarter. Since the significant portion of exploration permit lies in Australia, the company has bolstered its technical work to recognise exploration potential within the license.
The Group has witnessed a promising outcome in the early technical work undertaken for mapping the current seismic prospects and leads.
Also, the planning work to take over further 3D seismic over the Ivory prospect has already been started by Carnarvon. The Ivory prospect which is expected to have 420 million barrels of mean recoverable oil and including Ivory the geological analysis of Carnarvon has identified 1.5 billion barrels of recoverable prospective resource in the permit.
On the financial front, the company spent $1.2 million on exploration activities and $0.9 million on business development during the quarter. Its cash holding as at the end of the quarter stood at $93.3 million compared to $48.3 million as at the start of the quarter.
In today’s trading session, CVN stock price surged up by 3.571% to last trade at $0.435 on 8 April 2019. Over the past 12 months, the stock has witnessed a massive upside trend of 211.11% including a positive price change of 29.23% in the last three months.
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