Energy: Carnarvon’s plan to expand its Dorado oil find comes a cropper; shares take a hit
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The long awaited news of whether Carnarvon Petroleum (ASX:CVN) has had any success with wells neighbouring its massive Dorado discovery has finally landed.
And it’s not what investors were hoping for.
Although Carnarvon did intersect the Caley and Baxter reservoir intervals in the Roc South-1 well as expected, they didn’t contain any “producible hydrocarbons”.
This sent shares south almost 32 per cent this morning to a low of 39.5c.
Carnarvon did, however, try to placate investors by saying the wireline data “does improve regional understanding, particularly for reservoir”.
The July 2018 Dorado discovery could be the largest-ever oil find on Australia’s North-West Shelf.
It is part of Carnarvon’s broader Phoenix project in the Bedout sub-basin, which is about 250km north of Port Hedland.
“As we unlock this new basin on the North-West Shelf we will find results that are unexpected and not as we should wish,” managing director Adrian Cook said.
“The Roc South-1 result in the Caley and Baxter intervals is a case in point in that it will not build upon our current resource pool.”
Cook did however take the opportunity to remind investors that Carnarvon had already found a lot of oil and gas in the North-West Shelf.
“We should not lose focus on the fact that we have discovered a significant volume of resources to date,” he said.
“We are working on plans to bring the Dorado liquids (oil and condensate) into production as soon as possible and we have ongoing intentions to make new discoveries in the future.”
All is not lost with the Roc South-1 well though, with Carnarvon saying it believes there is sufficient potential in the deeper Crespin and Milne structures to continue drilling.
“We will now test the deeper sections in the Roc South-1 well before the rig moves to the Dorado-3 appraisal well where it will conduct a flow test from the Dorado reservoirs that proved successful in the Dorado-1 and 2 wells,” Cook said.
Carnarvon is the operator of the field, meaning it manages the exploration, and owns 20 per cent of the project. Santos owns the other 80 per cent.
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Norwest Energy (ASX:NWE) has uncovered what it thinks is a “large” new conventional oil prospect in the Perth Basin. The junior explorer estimates the prospect contains prospective recoverable resources of up to 61 million barrels of oil.
The Philippine government has given Gas2Grid (ASX:GGX) more time to start deeper drilling its Nuevo Malolos-1 well. The company now has until September. Gas2Grid is now preparing to start drilling in the coming weeks.
Winchester Energy (ASX:WEL) is readying to start drilling a new well, Arledge 16#2, at its Lightning prospect, which is estimated to host a gross prospective resource best estimate P50 of just under 2 million barrels of oil in the Cisco Sands target. The Cisco Sands target is a proven producer in the Permian Basin in Texas, historically yielding a combined 5 million barrels of oil and 2.25 billion cubic feet of gas.