Dorado oil find off WA fuels hopes of new oil province The Dorado oil find may be Australia's biggest for many years. by Angela Macdonald-Smith Hopes for the emergence of a significant new oil province for Australia have been fired up by news of the discovery by the Dorado-1 well drilled off the north-west coast, which some are hailing as potentially one of the biggest finds on the North West Shelf. Shares in junior partner Carnarvon Petroleum jumped 57 per cent after the explorer reported what chief executive Adrian Cook described as a "transformational" result from the drilling at the site north of Port Hedland. The find follows earlier discoveries of gas and condensates by the two partners, Carnarvon and privately owned Quadrant Energy in the same region, sometimes called the offshore Canning Basin. Brett Darley, chief executive of Quadrant, which owns 80 per cent of the drilling venture, said the company is "delighted" by the early results. The new find lies off the coast of Western Australia, north of Port Hedland. The new find lies off the coast of Western Australia, north of Port Hedland. Carnarvon Basin That sense of excitement was amplified by Mr Cook. "This is what we live for as an exploration company," Mr Cook said. "Carnarvon and Quadrant are really unlocking a whole basin here. It's a great story for Australia and the industry that has been through some rough times in the past four years." Shares in Carnarvon closed 27.5¢, up 57 per cent, or 10¢. The well found oil over a depth of 96.1 metres, of which 79.6 metres is "net pay", signalling it is of high enough quality to produce oil at a commercial rate. Dorado lies close to the Phoenix South and Roc discoveries. Dorado lies close to the Phoenix South and Roc discoveries. Carnarvon Petroleum Hartleys analyst Aiden Bradley said the results point to a 100 million-plus oil field, even excluding oil that could be found deeper in the well. "It has at the moment everything going for it, and there seems to be hydrocarbons deeper in it as well." The Dorado find builds on previous discoveries of gas and condensates made by the partners nearby, at the Phoenix South and Roc wells. But Mr Cook said the Dorado discovery is more positive because of the better quality of the reservoir, and the resource being light oil instead of gas with related liquids. The Phoenix South-1 find made in August 2014, before the buyout of Apache's Australian assets by Quadrant, was then touted by some as potentially the country's largest liquid discovery for 30 years, but this find is regarded as even better. "Certainly this one far and away exceeds that," Mr Cook said. "It's hard to think back to one that has been this big and exciting and there's a lot more to come." "While this is big in its own right we've got this whole basin to try to explore and unlock, so who knows how much more is there." Quadrant and Carnarvon hold four exploration permits covering 22,000sq km that cover essentially the whole basin, which is around the same size as the main producing part of the prolific Carnarvon Basin that Woodside Petroleum unlocked in the late 1960s. For a smaller company, an oil discovery is better news than finding gas, because it is cheaper and quicker to bring into production, requires less infrastructure and can be sold without lining up sales contracts. It is "a significantly better proposition at this point in time," Mr Cook said. Mr Cook said the partners should be able to confirm the size of the find once the well has been completed and analysed within the next few weeks. "But 80 metres of net pay with quality oil, you can work out whether it's commercial or not pretty easily," he said. "Depending on results from the rest of the well, this goes from being big to probably one of the biggest discoveries ever on the North West Shelf, it's got that sort of potential to it." The partners are also drilling a second well, Phoenix South-3, to firm up that discovery. Quadrant was lined up for an IPO earlier this year by its major owners, Brookfield's private equity arm and Macquarie Group, but that was scrapped and Brookfield is thought to be considering selling its stake. Mr Bradley suggested the discovery could add about $800 million to Quadrant's value.
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