"Truly Incredible Find" Sends Carnarvon Shares Running
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Shares in Carnarvon Petroleum re-listed yesterday after a couple of days of suspension to allow an update of the oil strike in an exploration well in northwestern WA coastal waters.
The shares again soared after it revealed more oil had been found in the Quadrant Energy-operated Dorado well off the WA Pilbara coast.
Carnarvon managing director Adrian Cook said in the statement the “impressive” drilling results added to a “truly incredible find” in the Bedout Basin.
The shares were up nearly 30% at 63 cents at the close - taking their value to more than $750 million and the gain in the past month to well over 350%.
Quadrant, which owns 80% of the well consists of the old Apache assets in WA and is controlled by Brookfield, the Canadian investment group and Macquarie Group.
Both had looked to float Quadrant at the start of the year but pulled the IPO when oil market and stockmarket conditions turned negative.
They would have no trouble selling it now to investors and it would be worth in the multiple of billions.
Based on the value of Carnarvon alone the company’s 80% stake is worth more than $3 billion, and it is a large gas supplier in WA and generates sales revenue and earnings from that.
Carnarvon said yesterday wireline test results confirmed more light oil in Dorado’s Crespin and Milne members.
“The oil discovered in the Caley Member is very significant in terms of its likely scale and in proving that this play works in the basin,” Mr Cook said.
“Discovering more oil in the Crespin and Milne members makes this a truly incredible find, for Dorado and for similar structures nearby that have been identified in Carnarvon and Quadrant’s prospect list.”
Another 40 metres of net oil oil play has been added, bringing to 132 metres the total hydrocarbon net play in the Dorado-1 well.
'Light oil has been recovered from the Crespin Member containing a gross hydrocarbon package of 50 metres and a net oil pay thickness of 22 metres. The quality of the reservoir encountered was better than pre-drill estimates with average porosities of 14 per cent,” the company reported.
"Light oil was also recovered from the Milne Member containing a gross hydrocarbon package of 30 metres and a net pay thickness of 18 metres. The average porosity of 13 per cent was also better than the pre-drill estimates.
“Pressure data has confirmed that the Dorado structure contains multiple oil columns in the Caley, Crespin and Milne Members and a gas and condensate column in the Baxter Member, aggregating to a total net hydrocarbon pay of 132 metres.
"The Caley, Baxter and Milne sands did not encounter any water, whereas the lower section of the Crespin sand contains an interpreted water contact.
“With drilling and evaluation of the Dorado-1 well now completed, Carnarvon’s assessment of the hydrocarbon volumes associated with this discovery is now well underway.
“With drilling and evaluation of the Dorado-1 well now completed, Carnarvon’s assessment of the hydrocarbon volumes associated with this discovery is now well under way,” Mr Cook said.
“The hydrocarbon volumes will be announced to shareholders and investors as soon as possible,” he added.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.