CVN News Article

Just seen this article on Carnarvon Petroleum.



Carnarvon Petroleum Ltd (ASX: CVN) is certainly hitting its straps; it recently expanded its offshore acreage in a well-known oil and gas producing region, kicked-off drilling operations at its Pheonix Project and is now well-funded via production out of its Thai interests.
One look at a map of the North West Shelf (NWS), a region of prolific oil and gas production off the Pilbara coast, shows that Carnarvon Petroleum realises the importance of being in the right location.
The ASX-listed, Perth-based oil and gas explorer has seized the opportunity to increase its suite of oil and gas assets in the region having recently been awarded three contiguous blocks on the eastern flank of the Barrow Sub Basin.
The blocks include Petroleum Exploration Permits EP – 490 (bid block L11-6) and EP-491 (bid block L11-7) as well as TP/27 (bid block T11-3) which in total cover a substantial 3,200sq km area and, importantly, lie adjacent to oil and gas fields of the Harriet Joint Venture.
What is of particular interest is that the blocks are located in close proximity to producing oil and gas fields. Only 46km to the north lies the Wandoo oilfield which has recoverable oil estimated to be approximately 100Mb. Meanwhile, 24km north of the blocks lies the Stag oilfield which has recoverable oil estimated to be 50Mb.
Apart from the great location of the blocks, they are already substantially covered by quality 3D seismic data which will assist in identifying analogous traps to the Stag and Wandoo oilfields.
To the west of the blocks, there have been a number of oil and gas discoveries, including the significant hydrocarbon accumulations in the Harriet area, reservoired within the highly productive Flag Sandstone.
Another benefit is that the blocks are located in shallow water, with depths not exceeding 70m. This allows the blocks to be cost-effectively drilled with the use of offshore jack-up rigs.
According to Carnarvon Petroleum managing director Adrian Cook, the awarding of these blocks to the company, which is operator and 100 per cent owner, is in keeping with the company’s strategy of expanding its suite of assets on the NWS.
"These blocks provide an exciting new phase for growth for the company," Cook said.
"Securing a significant acreage position just to the south of two major oil fields with minimal commitments further compliments the company’s strategy for expansion in the North West Shelf.
"The blocks are already covered by extensive modern 3D data, combined with shallow water depths and reservoir targets, means that future exploration costs will be kept to a minimum as we pursue significant oil prospects in the acreage."
Looking ahead, work on the blocks will include reprocessing the existing 3D seismic and extensive geological studies. According to Carnarvon, this work will not be of significant cost to the company.
Meanwhile, Carnarvon has recently begun drilling at its highly anticipated Phoenix South-1 well with partner and operator Apache Energy, located at its Phoenix Project in the NWS.
Drilling is expected to take place for approximately 60-70 days which includes time for logging and testing. Total depth is scheduled to reach a minimum of 4,500m, but could extend to 5,000m depending on the presence of gas below 4,500m.
"This well has the potential to be a significant value driver for Carnarvon," Cook said. "The company is well funded through the upcoming drilling campaign."
Earlier this month, Carnarvon completed drilling the shallow-hole section at Phoenix South-1 well and is now drilling the intermediate section.
While the main focus is on NWS, Carnarvon also holds an acreage position onshore Thailand with a 20 per cent stake in L44/43, L33/43 and SW1 concessions located in the Phetchabun basin approximately 300km north of Bangkok.
The concessions are producing oil from across eight fields, and technical work by the operator has steadied production rates to around 4,000 barrels of oil per day.
A drilling program on these concessions is expected to kick-off next month and encompass five to seven new wells.
In May, Carnarvon offloaded 20 per cent of its stake in its Thai concessions to Loyz Energy for $US33 million in cash, bringing total company cash reserves up to A$50 million. The company retains a free-carried 20 per cent interest in Thailand, keeping exposure to these assets while pursuing exploration back closer to headquarters in Western Australia.
Carnarvon’s share price has performed strongly over the course of 2014, hitting a high 10.5c late last month.
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