Over the past year there have been changes to the board and management at Carnarvon, along with a refresh of our strategic objectives, but Carnarvon’s commitment to developing Dorado and continuing with exploration in the Bedout Sub-basin offshore Western Australia has remained constant.
The Dorado oil and gas discovery, of which Carnarvon holds a 10% equity, was made in 2018 and at 162 MMbbl recoverable (2C, gross) (see page 14), is the largest undeveloped oilfield in the Northwest Shelf.
Through the years since that discovery, we have successfully appraised the field in 2019, received a Production Licence in 2022 and our Offshore Project Proposal for development was accepted in 2023.
Along the way we have also had further exploration success, with the 43 MMbbl Pavo oilfield discovery (2C, gross) in 2022, located around 45km from the site of the proposed Dorado facilities.
In 2024 we have progressed with optimising the Development Concept, commencing with the necessary project specific Environment Plan approvals, and are working towards re-entering FEED later this year towards a Final Investment Decision in 2025.
The Dorado Phase 1 liquids development concept is simple and robust, similar to other developments in the region, consisting of a WHP and the phased development of up to 11 wells, connected to a right-sized FPSO for production and storage, with the gas being reinjected to enhance oil recovery and stored in the sub-surface reservoirs for an eventual Phase 2 gas export development.
The Company retains a very strong financial position having $318 million in liquidity, comprising cash of A$180 million and A$138 million (US$90 million) in future contributions to Carnarvon’s Dorado development costs. Along with a prospective debt facility, Carnarvon is extremely well placed to fund its share of the development and ongoing Bedout Sub-basin exploration.
The exploration potential remaining in our Bedout Subbasin acreage is significant, and while we have the oil necessary to progress the Phase 1 liquids development at Dorado, we are targeting additional gas resources to underpin an eventual Phase 2 gas export project. The challenges that the industry has experienced over the past couple of years, related to necessary approvals and rig availability, are clearing and Carnarvon is working hard to ensure we return to exploration drilling.
I have relished the challenges associated with taking up the CEO role these past few months, and while some difficult decisions had to be made to ensure that our ongoing corporate and administrative costs are reduced and well below the interest income we are receiving, the result is a clean, streamlined business.
Together with the Board, I look forward to the ongoing work in delivering our strategic objectives of maximising value from Carnarvon’s asset base, reducing our corporate cost base and preserving our existing balance sheet strength.
I would personally like to thank the previous CEO, Adrian Cook, for the many years we worked together to position the Company to where it is today. I would also like to thank the Board for their support of myself in this new role, especially as we take the Dorado project to FID and then production. I would especially like to thank the remaining team at Carnarvon for their stellar efforts in undertaking the work required to ensure we build the best asset and explore the best prospectivity in what is undoubtedly the premier oil and gas basin in Australia.
We have a clear and concise focus in the business, generating value for shareholders through our holdings in the Bedout sub-basin while maintaining our balance sheet, and together with you, our shareholders, I am looking forward to getting ever closer to production at Dorado and further exploration within the Bedout Subbasin.
Philip Huizenga
Chief Executive Officer