Dorado-3 oil flow puts Carnarvon on the pathway to development
It has been some time and several wells in the making, but Carnarvon Petroleum (ASX:CVN) can now say without any doubt that the shallow-water Dorado project is a major oil and gas field.
The successful production of more than 11,000 barrels of oil per day (bpd) along with 21 million cubic feet of gas per day (MMcfd) from an 11m net section of the Caley reservoir — from a total net reservoir interval of 53m at the Dorado-3 well — is a clear highlight of the company’s 2019 appraisal program.
This is one of the highest oil flow rates from an appraisal well in the North West Shelf offshore Western Australia.
Indeed the company and its operating partner Santos (ASX:STO) have flagged that each production well in the Caley reservoir could produce oil at rates of about 30,000bpd.
Nor is that the only win that Carnarvon has taken away from Dorado-3. Earlier testing of the shallower, secondary Baxter formation had resulted in the successful production of 48MMcfd of gas and 4,500bpd of associated condensate.
“These results are the highlight of an incredibly successful 2019 appraisal program in which we have now confirmed a very large resource of oil and gas at Dorado and prolific production flow rates,” Carnarvon managing director Adrian Cook said.
He told Stockhead that while the results look spectacular, the company had been pushing in this region for a long time and had put a lot of work into the project.
“I also think it is now a reflection of our changing character from being exploration-centric to now having really what should be a quality oilfield development with gas for future development,” Cook added.
“We have some real high-quality prospects to be pursuing out here in the future.”
He also told Stockhead that besides the oil, the company believes that Dorado could host a trillion cubic feet of gas behind the oil.
“If it is just a trillion cubic feet of gas, that is potentially a domestic story, but find a bit more and it is comfortably looking like it has export potential.”
Santos has already flagged that the flow rates, which come out at the higher end of expectations, strongly support progress towards starting front-end engineering and design work in early 2020.
Cook mirrored this sentiment, telling Stockhead that Santos would probably take a month or two to digest the data before finishing up a basis of design for Dorado.
“It’s a big resource in shallow water with great flow rates. I suspect we will have a number of development plans to work through, depending on whether we want to go big or go lower cost, but earlier to first oil.”
Shares in CVN closed up 5.26 per cent to 40 cents on Tuesday.