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Carnarvon Petroleum awarded offshore oil and gas blocks

The award of the contiguous EP-490 and TP/27 blocks in the North West Shelf adds to Carnarvon Petroleum’s Australian offshore oil and gas acreage. Both permits are located in shallow water with shallow reservoir targets.

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Carnarvon Petroleum (ASX:CVN) continues to build its Australian offshore oil and gas acreage with the award of two contiguous blocks in the Barrow Sub-basin in the North West Shelf.

These are located on trend with producing oil fields including the 100 million barrel Wandoo oil field and the 50 million barrel Stag oil field to the north.

It follows the company being awarded the EP 491 block that is adjacent to the Harriet joint venture oil and gas fields.

Petroleum Exploration Permit EP-490 (bid block L11-6) and TP/27 (bid block T11-3) are already covered by modern 3D seismic data which will aid in identifying analogous traps to the Stag and Wandoo oilfields.

Both are located in shallow water with shallow targets suitable for jack-up drilling.

“Securing a significant acreage position just to the south of two major oil fields with minimal commitments further compliments Carnarvon’s strategy for expansion on the North West Shelf,” managing director Adrian Cook said.

“That 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.

“These blocks, together with the contiguous EP-491 award announced on 29 May 2014, provide an exciting new phase for growth for the company.”

Block Details

EP-490 and TP/27 cover a total area of 1,750 square kilometres.

It is located close to the Wandoo oil field, about 46 kilometres to the north that has its primary reservoir at a depth of approximately 600 metres in the Early Cretaceous M.australis Sandstone of the Muderong Shale.

The Stag Oilfield about 24 kilometres to the north and has a primary reservoir with a depth of about 700 metres.

Both fields lie in approximately 50 metres of water.

Numerous oil and gas fields have also been discovered throughout the area to the west of the blocks, including the significant hydrocarbon accumulations in the Harriet area, which produce from the highly productive Flag Sandstone.

Water depth over the blocks does not exceed 70 metres, which when combined with shallow target depths, allows for cost effective drilling using offshore jack-up rigs.

Work commitments for the primary 3 year period are limited to reprocessing the existing 3D seismic and geological studies and will not add any significant cost exposure to Carnarvon’s already low future commitments.

The two blocks add to the 1,450 square kilometre EP 491 block that was awarded late last month.

EP 491 is also covered by extensive modern 3D data, has shallow water depths and reservoir targets.

It is adjacent to the Harriet joint venture fields that have produced more than 100 million barrels of oil and 175 billion cubic feet of gas.

There is also extensive infrastructure including oil and gas processing facilities on the nearby Varanus Island operated by Apache Energy.

Analysis

The new blocks add to the recently awarded EP 491, giving Carnarvon Petroleum a sizeable acreage position in the Barrow Sub-basin that is located in shallow water with shallow targets.

All the permits also benefit from close proximity to existing oil fields and existing 3D seismic.

That Carnarvon had successfully secured experienced operator Apache Corporation (NYSE:APA) as a farm-in partner at its WA-435-P and WA-437-P permits, where the Phoenix South-1 well is being drilled, demonstrates the company’s ability to secure strong partners.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

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