CARNARVON PETROLEUM LIMITED - ASX: CVN

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Description

Carnarvon Petroleum Limited (“Carnarvon”) is a Perth based company listed on the Australian Stock Exchange (CVN). The Company’s principal activity is oil and gas exploration and production.

Carnarvon’s objective is to create value from the production and exploration opportunities in its 40% interest in the Phetchabun Basin oil fields and exploration concessions in Thailand.

Together with joint venture partner and operator, Pan Orient Energy Corp. (TSX:POE), Carnarvon is undertaking an extensive work programme including 3D seismic and a mix of development, appraisal and exploration wells to fully evaluate and test these fields.

Carnarvon, as operator has an active exploration programme running in its L2050 concession, as well as participating in two separate joint ventures on the NWS Australia.

The longer term objective is to build Carnarvon’s asset base from exploration success and cash flow self sufficiency and be widely recognised for excellent technical credentials. At the same time as Carnarvon develops its Thai interests new exploration and development opportunities are being actively canvassed with a principal focus on oil prolific basins in Asia and Australia.Thailand L44/43, SW1A & L33/43

A total of 25 wells were drilled in the SW1A permits, during the 2008/2009 financial year, resulting in 17 commercial oil production / testing wells, delineation of one new oil field, and several new oil pools. The remaining eight wells all contained promising oil shows and several have sidetrack potential. A production license and environmental approval has been granted over the Na Sanun East (“NSE”) oil field allowing field development drilling to commence. Exploration drilling in the northern exploration block L33/43 failed to intersect commercial volumes of hydrocarbons. However, the L44-W oil discovery, in the north eastern corner of L44/43, is interpreted to spill over into the southern end of L33/43. Appraisal drilling of the L44-W oil discovery is anticipated in both concessions over the next 12 months.

Thailand L20/50

Carnarvon, and partner Sun Resources, were granted the L20/50 exploration concession in January of 2007. The L20/50 concession is situated approximately 30 kms to the southeast and on trend with the largest onshore oil field in Thailand at Sirikit. The permit is around 60 km to the west of Carnarvon’s 40% owned Phetchabun Basin producing assets. The concession covers around 4,000 km2 and is lightly explored. Around 1,000 km of 1980’s vintage 2D seismic data is available in paper format and six wells have been drilled in the block (three shallow at around 500m and three deeper). One previously drilled well in 1982 at Nong Bua-1 intersected oil shows which Carnarvon believes were not fully tested. Carnarvon is continuing to investigate the possibility of twinning or re-drilling this well. Carnarvon has also digitized and reprocessed the bulk of the available 2D seismic data and the interpretation of that dataset showed the potential for a large number of structures of significant potential size. 500 km of new 2D seismic was acquired in September of 2009. The processing and interpretation is now complete and many propects have been identified. 2 firm exploration wells are to be drilled Q1 2011 with the possibility of a third contingent well. Geological analysis of seismic and previous drilling data has concluded that a number of play types are apparent, including Sirikit style fans, Wichian Buri style sandstones, and Na Sanun style volcanics.

Thailand L52/50 and L53/50 Blocks

The Company was recently awarded by the Department of Mineral Fuels (“DMF”) in Thailand for concession rights in petroleum exploration and production the two areas described as Blocks L52/50 and L53/50 (“the Concessions”) onshore Thailand within the Surat-Khiensa Basin. Pearl Oil (Petroleum) Ltd (“Pearl”), an independent oil and gas company with exploration and production (E&P) activities focused exclusively in South East Asia, submitted the bid as operator on behalf of Pearl and Carnarvon, each company participating at a 50% equity level. The combined area of the two blocks is large, comprising approximately 6,950 km2, however both are lightly explored with only two deep wells and limited seismic data available. There has been minimal exploration over the area and little public knowledge is available about the Surat-Khiensa Basin, however work completed to date and Carnarvon’s regional knowledge suggests this is an area with good potential for hydrocarbon exploration. Carnarvon and Pearl were together the sole bidders for this block and the Company anticipates award in late 2009.

New Zealand WA-435-P, WA-436-P, WA-437-P, WA-438-P & WA-443-P

The four permits WA-435-P through to WA-438-P are situated in the north-western part of the Bedout Sub-basin within the greater Roebuck Basin, offshore Western Australia. The blocks lie in an under-explored area that has received little recent attention, between the prolific Carnarvon Basin hydrocarbon province to the southwest and the Browse Basin to the northeast. The town of Port Hedland lies approximately 150 km to the south of the permits and Broome lies 250 km to the northeast. Water depths range from 35 to 265 metres and the permits cover a very large area of more than 21,000 km² (268 graticular blocks).

Only six wells have been drilled in the permits to date. The two wells, Phoenix-1 and Phoenix-2, drilled on the large Phoenix structure in WA-435-P both intersected extensive gas columns within lower-porosity, mid-Triassic reservoirs. In particular, Phoenix-1 recorded 110 metres of net gas-bearing section; however, further work is required to determine whether the gas discovery at Phoenix could flow at commercial rates. A larger, untested structure in WA-435-P lies directly on trend with the Phoenix structure, 5 to15 km to the southwest. Further to the southeast in WA-437-P lies yet another large, untested structure. Regional geology suggests that reservoir quality improves southward toward these prospects, but this model will need to be confirmed by drilling. These Triassic structures have significant potential of the order of several Tcf’s of recoverable gas, if exploration and appraisal drilling are successful.

Other viable plays are recognised in these blocks including possible oil exploration potential at the shallower Cretaceous-aged levels. Carnarvon and Finder intend to carry out numerous studies to evaluate this potential.

The Government approved work programme for these permits, for the initial firm three-year term, comprises seismic reprocessing, the recording of an aeromagnetic survey and technical studies, which will include a complete analysis of the gas intersections in the Phoenix-1 and Phoenix-2 wells. The second three-year term is planned to consist of seismic acquisition and the drilling of at least one well in each permit. The results of the initial technical studies will be used to modify/accelerate this second period work programme as appropriate.

New Zealand WA-443-P

This permit is adjacent to Carnarvon’s other Roebuck Basin blocks and was acquired in April 2010. No previous drilling has taken place in the WA-443-P block. One large Middle Triassic prospect has been interpreted, the Jaubert Prospect, which is a faulted anticlinal closure. The structural form and size of the prospect are comparable to the Phoenix group of potentially large gas accumulations. Carnarvon has secured this new permit with a firm programme over three years to reprocess and interpret 1,400 km of 2D seismic. Geological and geophysical studies will also be carried out in conjunction with similar work in the adjacent permits.

New Zealand WA-399-P

WA-399-P was awarded on 7 May 2007. The permit covers an area of 50km² located between the Pyrenees and Macedon oil and gas fields and the Leatherback oil accumulation. Carnarvon has completed the reprocessing of all available seismic over the permit (550 km²). The current work programme requires acquisition of 315km of new 2D seismic and Carnarvon is reviewing vessel availability and prices.

Indonesia - Rangkas Block

In September 2009 Carnarvon Petroleum entered a farm-in agreement with Lundin Petroleum to earn 25% of the Rangkas PSC located onshore in West Java. The Rangkas Block covers an area of approximately 4,000 km2. Previous drilling in the block and surface oil seeps have confirmed an active petroleum system. The block contains both clastic and carbonate play types, and recent oil and gas discoveries in a neighbouring block highlight the commercial potential of a fractured basement play in Rangkas. The excellent prospectivity of this block, low cost wells and nearby infrastructure and markets together provide Carnarvon with a significant growth opportunity.

Several prospects and leads have been identified in the block following reprocessing and interpretation of 1000 km of existing 2D seismic. Core studies on the primary reservoir target are complete. Petrophysical analyses on regional well data and a basin modelling study are underway. The joint venture also will acquire 474 km of new 2D seismic in mid 2010 and thereby fulfill its firm work commitments. These new data will allow the joint venture to mature and rank prospects for future drilling.

Mine For

oil, gas

Location of operation(s)

Thailand, Western Australia, Indonesia, New Zealand

Australian Basins

Carnarvon

Address

Ground Floor, 1322 Hay Street
WEST PERTH, WA, AUSTRALIA

Phone

08 9321 2665

Email

Website

http://www.carnarvonpetroleum.com/

Last Updated

15/04/2011