Carnarvon Energy Advances Dorado Project and Bolsters Finances

Highlights

• Carnarvon Energy progresses with the Dorado project development and strategic board appointment.
• Focused exploration in the Bedout sub-basin to enhance future gas resources.
• Maintains strong financial position with A$177 million cash and no debt.

Carnarvon Energy Ltd (ASX:CVN) achieved significant milestones in the September quarter, driving forward with the Dorado Phase 1 liquids development project, making key corporate appointments, and ensuring a stable financial position. As one of Australia’s major undeveloped oil fields, Dorado continues to represent substantial potential for the company, backed by a joint venture with Santos holding an 80% operational stake.

Advancements in Dorado Development

Carnarvon holds a 10% interest in the Dorado WA-64-L project, situated around 150 kilometers off Western Australia’s coast. The project has set its sights on an initial liquids extraction phase (Phase 1), followed by a gas export phase (Phase 2). The development strategy includes establishing a fixed wellhead platform (WHP) linked to a floating production, storage, and offtake (FPSO) vessel, which will handle processes such as oil and condensate stabilization, gas compression and reinjection, and water treatment.

Current technical evaluations aim to optimize production efficiency and refine infrastructure sizing, with front-end engineering design (FEED) re-entry anticipated by the December quarter. This phase, expected to lead toward a final investment decision (FID) in 2025, will build on substantial work already conducted, guiding the project toward its targeted objectives.

Carnarvon CEO Philip Huizenga noted the company’s progress in technical studies, supporting a strategic reshaping of the initial liquids development plan. The joint venture team is reviewing infrastructure options to ensure efficiency and feasibility as the FEED re-entry draws near.

Expanding Exploration in Bedout Sub-basin

In the promising Bedout sub-basin, where Carnarvon holds interests ranging from 10% to 20%, exploration planning is advancing, with the potential to unlock a significant gas resource. Estimated reserves in the sub-basin reach around 9 trillion cubic feet (Tcf) of gas and 1.6 billion barrels of liquids, making it one of Australia’s most substantial untapped areas. These resources aim to support Phase 2 of the Dorado project, which will focus on gas export.

Pending rig availability and environmental approvals, exploration drilling in the Bedout sub-basin is scheduled for 2026, aligning with Carnarvon’s strategy to enhance throughput at Dorado’s facilities and leverage liquid resources from nearby fields like Pavo.

Corporate Updates and Financial Strength

The quarter also marked an important corporate transition, with Susan Jones joining the board as a non-executive director, succeeding William Foster. Jones, an energy industry veteran with over 25 years of experience, brings expertise in legal, commercial, and environmental leadership. Her appointment aligns with Carnarvon’s strategic progression towards FEED and FID.

Financially, Carnarvon closed the quarter with A$177 million in cash and no debt, fortified by a US$90 million free carry on Dorado development costs. The company maintained prudent cash management practices by balancing funds in both Australian and US dollars, effectively managing currency exposure. Despite recording a minor unrealized foreign exchange loss of A$3.12 million, interest income has consistently covered corporate expenses, reflecting strong cost management.

Additionally, Carnarvon streamlined its exploration focus by surrendering non-core permits EP509 and TP29, allowing the company to concentrate resources on the high-potential Bedout sub-basin.

Carnarvon Energy’s continued development of the Dorado project, focus on high-potential exploration areas, and sound financial management illustrate the company’s commitment to strategic growth and value optimization.