Carnarvon Petroleum Successfully Completed Field Operations In The Buffalo Project

  • Oct 10, 2018 AEDT
  • Team Kalkine
Carnarvon Petroleum Successfully Completed Field Operations In The Buffalo Project

Carnarvon Petroleum Limited (ASX: CVN) is involved in the operations of developing and producing gas and oil in Australia. On 9 October 2018, Carnarvon Petroleum Limited (ASX: CVN) provided an update regarding the successful completion of field operations in the Buffalo project. In the first week of October, the company has put together a team to start field surveillance procedures in the range of the proposed Buffalo Oil Field Redevelopment Area to find the potential future surface locations for wells, the platform and flowline to a Floating Production, Storage and Offloading vessel (FPSO).

The results from the survey display that there are no impediments in finding the wells in the surface locations that are most ideal for targeting the known attic of oil. The company has also submitted the Environmental Plan for the drilling of up to 3 wells in the field and the company is also actively getting involved with the governments of both Timor-Leste and Australia so that the company do not face any obstacle in drilling a well, in the Timor-Leste jurisdiction, in the 3rd quarter of next year.  

On 10 October 2018, the Company issued its annual report, following which the share price of the company uplifted by 0.482 percent. Besides the commencement of drilling at Buffalo well and redeveloping the Buffalo oil field, this year the company also finished its work on the Labyrinth project which is sharing a border to the north of the Phoenix and Dorado area. During the financial year 2018, the company started it drilling at Daroda 1 and Phoenix South-3 wells as well.  The company successfully completed a capital raising of $19,107,000 through a placement to sophisticated and institutional investors followed by a share purchase plan to existing shareholders. According to the company’s report, there are several upcoming share price catalysts over the next 12- 18 months which includes Dorado development plans, buffalo well, Buffalo PSC negotiations and possible S&P ASX 200 index inclusion.

Carnarvon spent $2.2 million in a new venture and advisory costs for the purpose of building its database and portfolio of potentially high impact assets to add to the Company’s string of successful discoveries. Carnarvon Petroleum also invested a further $6.5 million on its exploration assets mostly in relation to the Dorado-1 and Phoenix South-3 well, and preparatory work on the redevelopment of the Buffalo oil field.

Due to the effect of a depreciation of AUD against the Carnarvon’s USD cash and financial assets, there was an unrealized gain on foreign exchange of $1.75 million in FY 2018 which was a loss of $1.46 million in the previous year. In FY 2018, the company earned a net profit of $1.42 million compared to the loss of $36.97 million in the previous year. Cash and cash equivalent of the company increased from $53.05 million in FY 2017 to $63.60 million in FY 2018.  Due to the significant increase in the cash and cash equivalent, the total current assets of the company increased from $54 million in FY 2017 to $64.49 million in FY 2018. The net cash outflow from operating activities decreased from $5.04 million in FY 2017 to $3.7 million in FY 2018.

In the past six months, the share price of the company increased by 196.21 percent from $0.140 to $0.415 as on 9 October 2018. CVN’s shares traded at $0.417 with a market capitalization of circa $493.8 million as on 10 October 2018 (AEST 1:39 PM).

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