Carnarvon provides resource update for oilfield offshore WA

22 August 2018, Week 33, Issue 639

Carnarvon Petroleum has provided an update on the shallow-water Dorado oil and gas discovery at the Quadrant Energy-operated WA-437-P licence in Western Australia’s Bedout Basin.

The Australian junior said on August 20 that its assessment of the Dorado structure showed a gross 2C contingent resource of 171 million barrels of crude oil, 16 million barrels of condensate and 552 bcf (15.63 bcm) of natural gas.

Quadrant struck oil in the block, in which Quadrant owns 80% and Carnarvon holds 20%, in July via the Dorado-1 well. The initial discovery was made in the Caley Member interval, with Carnarvon revealing last week that drilling across the Caley, Crespin and Milne members had encountered around 120 metres of net oil pay.

On August 20, Carnarvon CEO Adrian Cook described the 2C contingent oil resource as “one of the largest” ever found on the North West Shelf. He added: “Oilfields of this significant scale are not often found, with the last large field discovery on the North West Shelf being around 30 years ago.”

He said that with additional resources commonly discovered in the surrounding area following a large discovery, Carnarvon expected to provide the market with further details on other prospects identified as possible oil plays.

In a letter to shareholders last week, Carnarvon noted that with the recent completion of the Dorado-1 and Phoenix South-3 wells, six wells had successfully discovered hydrocarbons in the Bedout Basin.

It described Dorado-1 well as one of the higher risk exploration targets considered by the joint venture, with the decision to drill taken “because of the large geological structure and the low drilling cost relative to the potential reward”.

While Phoenix South-3 intersected a large gross hydrocarbon column in reservoir, it was at the lower end of the company’s expected range. The well confirmed a “significant condensate resource, the commerciality of which will be assessed in time. Dorado will now become the venture partners’ immediate focus.

Beyond Australia, the company also has plans to redevelop the Buffalo oilfield offshore Timor-Leste.

Timor-Leste target

The company said last week that through the use of modern seismic data and reservoir mapping technology, it has identified new exploration targets for the Buffalo field, which was still producing around 4,000 bpd when BHP Billiton abandoned it in 2004.

The Australian and Timor-Leste governments’ signing in March of the Maritime Boundary Treaty has enabled Carnarvon to push ahead with its new plans. The junior said in May that it intended to start its drilling programme with the Buffalo-10 well.

Carnarvon said at the time that it was well placed to “test the new oil in the attic accumulation” and to drill deeper into the oil pool in the previously developed portion of the field.

The company has kicked off preparations to obtain environmental approvals and identify drill rigs and has begun talking to floating production, storage and offloading (FPSO) vessel providers to determine availability. It has also started securing staff and contractors to conduct the drilling.

Carnarvon intends to use a jack-up rig to drill the well as the field lies in just 25 metres of water. Carnarvon expects it will take around 30 days to drill Buffalo-10 to a depth of about 3,250 metres and to complete an extensive formation evaluation programme.

“Government meetings to date have demonstrated that the parties are aligned in wanting to achieve first oil as soon as practicable,” the company said in May.

According to an independent cost analysis commissioned by Carnarvon, the redevelopment, comprising three production wells, should cost less than US$150 million. Operational costs have been separately assessed at US$80-100 million per year over a forecast production life of five years.

Edited by

Andrew Kemp

Editor

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