Carnarvon Petroleum Limited (ASX:CVN) recently completed a $20 million capital raising and has strengthened its total cash position to $65 million.
The funds were raised to enable the company to pursue drilling of the Buffalo-10 well with the maximum equity possible and to progress activity across other Carnarvon permits.
The Buffalo oil field is covered by the recently signed Maritime Boundary Treaty between Australia and Timor-Leste and the field will be completely within Timor-Leste’s jurisdiction.
Plans to drill in 2019
Carnarvon’s plan is to drill the Buffalo-10 well in 2019 then move to oil production around 18 to 30 months later.
The project is expected to produce an estimated 31 million barrels of oil over five years and revenue has been estimated at over US$2.3 billion.
Notably, with an expected development cost of less than $150 million and a simple low cost floating production system, the project is expected to have a high profit margin.
Earlier this week, the company commenced drilling the Dorado-1 well targeting gas and liquids in the Canning Basin offshore Western Australia.
The primary objective for the Dorado-1 well is to assess the gas and liquids potential in the Caley Member interval by drilling to a depth of about 1,175 metres.
The Dorado structure at the Caley interval is estimated to contain prospective resources of gas and associated condensate equivalent to 125 million barrels of oil.
Meanwhile, the company’s current two Phoenix project wells are seeking to confirm commercial viability after having successfully proved the existence of a working petroleum system from the first four wells.
READ: Carnarvon Petroleum’s well reaches 4,619 metres targeting gas and condensate on North West Shelf
The Phoenix wells are on the North West Shelf offshore Western Australia.