Carnarvon has three promising spots on its treasure map for another El Dorado
Oil explorer Carnarvon says neighbouring prospects to the now-famous Dorado oil discovery could hold more than 928 million barrels of oil and gas.
Carnarvon (ASX:CVN) made headlines in July and August when its aptly-named Dorado-1 well hit oil and condensates — gas so heavy it’s liquid — in a new kind of sandstone reservoir.
Carnarvon’s share price surged 380 per cent to an all time high on the news.
The existing reservoir holds a resource of 171 million barrels of gross contingent oil. Contingent resources are known, potentially recoverable volumes with a development plan that is not yet commercial.
The new targets announced today are in a permit zone known as “Arith” — and one in particular, Roc South, holds the most potential, with Carnarvon putting the probability of success at 63 per cent.
Looking for El Dorado 2
While the explorer works through its options with that well — they’re trying to set up a joint venture to do further work on it — they’re scouting the neighbouring area for similar windfalls.
The primary target is Roc South, a reservoir that could hold between 74 barrels of oil equivalent (boe), a term that includes both oil and gas.
Carnarvon says the trap, or the geological structure, is “very similar” to Dorado, and while the whole reservoir is expected to be smaller, the ‘packages’ where the oil is held are expected to be thicker.
Second on the list is the Pavo structure, about 40km from the Dorado discovery.
Carnarvon’s current analysis suggests it’s a single layer reservoir, rather than multiple stacked on top of each other like the other two, holding an average of 101m boe.
They are putting the chance of success at 34 per cent.
The final option is the Apus prospect just a few kilometres from Dorado.
It’s made up of possible stacked reservoirs four different sandstones that could hold as much as 753m boe.
But Carnavon is putting the chance of success at 21 per cent.
Already one of those ‘members’ or sandstone targets, the Caley, has proved tricky: while drilling the Phoenix-3 well in August they were not able to extract any oil or gas so couldn’t work out precisely what was down there.
Investors had a conniption and Carnavcon had to reassure them the Dorado was still promising and it had other exciting ventures, such as a foray into the Timor-Leste Sea that it plans to drill in 2019.
Carnarvon stock rose 3 per cent to 40.5c.