CARNARVON ENERGY LIMITED Phoenix South-2 well discovered gas and condensate at Caley level as anticipated
Phoenix South Caley volumes upgraded to 143 million barrels of oil equivalent ("mmboe")¹
Plans for drilling the Dorado-1 exploration well commenced, targeting 127 mmboe¹ in Caley
A$51 million held in cash, Q/Q $4m exploration spend and $4.0m currency translation effect
Managi ng Di rect or' s Comments
During the quarter we announced the Phoenix South-2 gas and condensate discovery at the Caley level, being the same level that contains similar gas and condensate in Roc. Analysis of the hydrocarbons encountered in Phoenix South-2, together with other well data collected, resulted in us reporting an increase in the estimates for the Phoenix South Caley prospective resource volumes by some 32% on a barrels of oil equivalent basis.
Planning has now commenced on the Dorado-1 exploration well that is targeting 545 bscf¹ of gas and 31 million barrels¹ of condensate (that is 127 mmboe¹) and we will release further information on this as we reach the key progress milestones.
During the quarter we also bid farewell to Ted Jacobson, former Managing Director of Carnarvon, and more recently a non-executive director. Ted made many important contributions during his time at Carnarvon and he continues to remain close to the Company since retiring.
Phoenix Project
(Carnarvon 20%-30%; Quadrant Energy is the Operator)
The Phoenix South-2 well was completed early in the quarter and was the fourth successive discovery drilled by the joint venture in the Phoenix Permits. The configuration of the casing set-up was designed in a way that was intended to allow for the assessment of both the Hove and Caley levels. The amount of open hole section meant that drilling had to cease once we encountered higher than expected pressures. It also meant that no logging while drilling data or wireline logging data was recorded over the interpreted Caley reservoir. The high pressures encountered and the nature of the gas observed in the well, did allow the Company to use this information to upgrade the prospective resource for the Phoenix South Caley as shown in the table below. The resources remain a prospective resource, albeit with a significantly increased probability of geological success.
Other work being performed by the joint venture includes preliminary project engineering studies such as a metocean study to understand year round ocean conditions in the region and studies for onshore facilities at Port Headland.
The prospective resource table below outlines a number of resources that the joint venture may test before committing to a development concept. This includes the Dorado-1 well, which will test the Caley level and a number of interpreted sands in the Milne level. The joint venture is also considering the next steps with respect to re-drilling the Caley and Hove discoveries encountered at Phoenix South-2.
¹ Refers to Pmean prospective resource. See tables on page 2 of this quarterly and ASX releases of 14 November 2016 and 28 March 2017 for further information. Volume estimates are prepared using probabilistic methods.
CARNARVON PETROLEUM LIMITEDContingent Resources | Light Oil | Natural Gas | Condensate | Barrels of Oil Equivalent | ||||||||
MMBBL 1C | MMBBL 2C | MMBBL 3C | BSCF 1C | BSCF 2C | BSCF 3C | MMBBL 1C | MMBBL 2C | MMBBL 3C | MMBOE 1C | MMBOE 2C | MMBOE 3C | |
Roc A/B sand | - | - | - | 204.5 | 331.8 | 580.3 | 11.9 | 19.6 | 34.8 | 47.8 | 77.8 | 136.6 |
Phoenix South - Barret | 6.8 | 16.7 | 29.6 | - | - | - | - | - | - | 6.8 | 16.7 | 29.6 |
Phoenix | 2.0 | 7.0 | 16.0 | 2.0 | 7.0 | 16.0 | ||||||
Total | 8.8 | 23.7 | 45.6 | 204.5 | 331.8 | 580.3 | 11.9 | 19.6 | 34.8 | 56.6 | 101.5 | 182.2 |
Prospective Resources | Light Oil | Natural Gas | Condensate | Barrels of Oil Equivalent | Probabilit Geologica Success | ||||||||||||
MMBBL P90 | MMBBL P50 | MMBBL Pmean | MMBBL P10 | BSCF P90 | BSCF P50 | BSCF Pmean | BSCF P10 | MMBBL P90 | MMBBL P50 | MMBBL Pmean | MMBBL P10 | MMBOE P90 | MMBOE P50 | MMBOE Pmean | MMBOE P10 | ||
Phoenix South Caley | - | - | - | - | 128.0 | 401.0 | 489.0 | 963.0 | 10.5 | 39.4 | 56.8 | 122.0 | 33.0 | 109.8 | 142.6 | 290.9 | 71% |
Phoenix South Hove | TBD | TBD | TBD | TBD | TBD | TBD | TBD | TBD | TBD | TBD | TBD | TBD | TBD | TBD | TBD | TBD | TBD |
Roc C/D sand | - | - | - | - | 52.5 | 110.0 | 120.0 | 199.0 | 3.1 | 6.5 | 7.2 | 12.1 | 12.3 | 25.8 | 28.2 | 47.0 | 66% |
Dorado Caley | - | - | - | - | 58.7 | 338.0 | 545.0 | 1,260.0 | 2.5 | 16.6 | 31.6 | 74.9 | 12.8 | 75.9 | 127.2 | 296.0 | 36% |
Dorado Milne A | - | - | - | - | 45.7 | 266.0 | 429.0 | 1,016.0 | 2.0 | 13.1 | 24.9 | 59.7 | 10.0 | 59.8 | 100.2 | 237.9 | 23% |
Dorado Milne B | - | - | - | - | 36.5 | 295.0 | 438.0 | 1,025.0 | 1.6 | 14.3 | 25.4 | 60.8 | 8.0 | 66.1 | 102.2 | 240.6 | 23% |
Dorado Milne C | - | - | - | - | 82.3 | 416.0 | 565.0 | 1,248.0 | 3.5 | 20.1 | 32.8 | 75.4 | 18.0 | 93.1 | 131.9 | 294.3 | 23% |
Dorado Milne D | - | - | - | - | 51.5 | 409.0 | 555.0 | 1,251.0 | 2.3 | 19.4 | 32.2 | 75.5 | 11.3 | 91.2 | 129.6 | 295.0 | 23% |
See ASX releases of 14 November 2016 and 28 March 2017 for further information. Volume estimates are prepared using probabilistic methods.
Labyrinth Project - WA-521-P
(Carnarvon 100% and operator)
The Company has completed its interpretation of the 2D seismic data it licenced since being awarded the permit in mid 2016. The interpretation has identified an encouraging main lead called 'Labyrinth'. 3D seismic data needs to be acquired over Labyrinth to promote it to a drill ready prospect. The Company is considering the next steps with respect to this and introducing partners to advance the exploration activities.
Buffalo Project - WA-523-P
(Carnarvon 100% and operator)
The 3D repossessing and Full Wave Inversion ("FWI") has been progressing and is nearing the final stages. The data produced so far is showing encouraging results over key intervals (e.g. Triassic and the existing Buffalo oil field within the permit) that have historically not been able to be properly mapped. These intervals are now becoming clearer which is expected to significantly de-risk exploration efforts in the permit as well as considering whether the Buffalo field could be brought back into production.
Maracas Project - WA-524-P
(Carnarvon 100% and operator)
The Company has recently commenced reprocessing existing 3D seismic data over the permit. The reprocessing includes the application of FWI technology that has demonstrated clear improvements in both the Phoenix and Buffalo areas. The reprocessed data will assist with the mapping of existing leads and identifying new prospects and will enable the company to study the potential for hydrocarbon bearing sands in the permit.
Outtrim East - WA-155-P(1)
(Carnarvon 28.5%, Quadrant Energy is the Operator)
The joint venture has been progressing with the technical work following the Outtrim East-1 oil discovery. Drilling planned in the surrounding acreage in 2017 may be instrumental in determining the next steps for this project.
CARNARVON PETROLEUM LIMITEDCerberus Project - EP-490, EP-491, EP-475 and TP/27
(Carnarvon 100% and operator)
The Company recently applied for a one-year suspension and extension of the permit work program, particularly in relation to commitments to drill two exploration wells. At the time of writing, the Company is waiting for the regulators' response as to whether the suspension and extension request has been approved.
Project Table
Project | Permit(s) | Operator | Interest held | Interest acquired Q/Q |
Phoenix | WA-435-P | Quadrant Energy | 20% | - |
Phoenix | WA-436-P | Quadrant Energy | 30% | - |
Phoenix | WA-437-P | Quadrant Energy | 20% | - |
Phoenix | WA-438-P | Quadrant Energy | 30% | - |
Labyrinth | WA-521-P | Carnarvon Petroleum | 100% | - |
Buffalo | WA-523-P | Carnarvon Petroleum | 100% | - |
Maracas | WA-524-P | Carnarvon Petroleum | 100% | - |
Outtrim | WA-155-P(1) | Quadrant Energy | 28.5% | - |
Cerberus | EP-490 | Carnarvon Petroleum | 100% | - |
Cerberus | EP-491 | Carnarvon Petroleum | 100% | - |
Cerberus | EP-475 | Carnarvon Petroleum | 100% | - |
Cerberus | TP/27 | Carnarvon Petroleum | 100% | - |
Corporate / Financial
The Company's cash holdings at the end of the quarter were $51.1 million, compared to $59.9 million at the end of the previous quarter.
The Company's United States Dollar ("USD") holdings at the end of the quarter was US$38.9 million with the balance being Australian Dollars. Carnarvon holds the majority of its cash in USD as a natural hedge to expected future USD denominated expenditures. The retention of predominantly US dollars influences Carnarvon's reported cash holdings due to AUD / USD exchange rates at each reporting period end.
A strengthening of the Australian Dollar relative to the US dollar during the quarter resulted in a foreign exchange translation adjustment that diminished the Company's reportable cash holdings by A$4.0 million.
During the quarter A$4.1 million was spent on exploration activities in the North West Shelf which includes the Phoenix South-2 drilling costs. In addition to this $0.8 million was spent on business development and corporate costs.
Carnarvon Petroleum Limited published this content on 24 April 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 24 April 2017 01:38:11 UTC.
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