Carnarvon Petroleum Ltd: Building on Dorado Success
Monday 18 October 2021
Quarter Highlights:
> Dorado development FEED progressed with major contracts secured.
> Buffalo-10 well on schedule to start in November 2021.
> Pavo-1 and Apus-1 Bedout exploration wells scheduled to commence in early 2022.
> Renewable fuels bio refinery project to commence FEED shortly.
Managing Directors’ comments. The Dorado liquids development continues to make excellent progress with the award of contracts for the Front-End Engineering and design (“FEED”) of the Floating Production, Storage and Offloading (“FPSO”) facility and the Wellhead Platform (“WHP”) to Altera and Sapura respectively. Altera and Sapura bring considerable experience and expertise to these major components of the Dorado development. I am pleased with the progress being made on Dorado as the joint venture works towards a Final Investment Decision (“FID”) in mid-2022. Targeting an initial daily gross oil production rate of between 75,000 and 100,000 barrels, Dorado is a world class asset capable of providing significant returns for shareholders. Importantly, there is also a significant amount of tie-in potential close to the Dorado development. We are on track to explore these nearby resources with the Pavo-1 and Apus-1 wells scheduled to commence in early 2022. A discovery at these locations would provide enhanced economic outcomes and shorter development time frames if tied back to the Dorado facility, which is being designed for future exploration success. Drilling preparations are also well advanced for the Buffalo-10 well in the Timor Sea, targeting a mid-case recoverable volume estimate of 31 million barrels (gross, 2C Contingent resource). The Valaris JU-107 jack-up drilling rig has been secured along with key ancillary contracts. As such, the Buffalo-10 well is scheduled to commence in November 2021, once the rig has completed its current operations. Due to a successful farm-out of the project earlier in the year, Carnarvon is free carried for the first US$20m of the Buffalo-10 well costs, whilst retaining a 50% project interest and operatorship. With three exploration wells scheduled for late 2021 and early 2022, the coming months represent a significant period of activity for the Company, with each well providing the potential to further transform the Company and add to the considerable value which is being presented by the Dorado development. I was also pleased to announce the Company’s net-zero emissions by 2050 commitment at the beginning of the quarter, even more so that Carnarvon has made tangible progress towards its commitment through its biorefinery joint venture. During the quarter, the biorefinery joint venture completed testing which confirmed that the renewable diesel produced by our preferred biorefining technology will have a lower emissions profile than petroleum diesel. The project also has the potential to displace up to 170,000 tonnes of carbon emissions annually, with the opportunity to create a carbon negative project.