Carnarvon Petroleum Limited’s (ASX:CVN) Dorado-2 appraisal well has confirmed a major oil and gas resource across multiple reservoir intervals offshore Western Australia.
Wireline logging of this well has confirmed pre-drill expectations of the Dorado joint venture partners Carnarvon and Santos Ltd (ASX:STO) of an oil and condensate rich gas resource.
The news prompted a strong investor response with Carnarvon shares up almost 16% in early trade to 62.5 cents on volume of almost 24 million while Santos shares have been up to 11.5 cents higher to $6.765.
The result increases confidence to progress to development, particularly of the oil resource in the Caley reservoir, which was the primary target.
Carnarvon’s managing director Adrian Cook said: “The Dorado-2 well was very important to Carnarvon because of its potential to transition the company into a significant producer in the future.
“This highly successful result makes this a very tangible reality.”
In the Caley reservoir the appraisal well intersected an oil-water contact as planned, which will enable refinement of the range of the recoverable oil resource.
High-quality oil was extracted from the reservoir and the excellent reservoir properties are comparable to those in the initial Dorado-1 discovery of 2018.
These results provide important definition of the required facilities for developing this oil field, providing important confidence around progressing to the first phase of development.
“A world-class resource”
Cook said: "Dorado has been proven to be a world-class resource, located in an ideal jurisdiction and operated by a quality partner.
“The joint venture can now confidently continue with its plans for a fast-tracked Caley oil development and a more substantial full field development, which is expected to incorporate the Roc discovery, on a staged basis.”
Dorado resides in WA-437-P in which Carnarvon holds a 20% interest.
Results from other reservoirs
In the Baxter reservoir, a secondary target, condensate rich gas was extracted from the well as expected.
Wireline logging also confirmed that a hydrocarbon column was encountered with no gas-water contact identified.
Pressure data indicates that the column likely extends for several hundred metres and may also encompass the Roc South structure at this level.
The Crespin reservoir was water-wet as anticipated, with valuable data being collected that will assist in refining the size of the resource encountered in Dorado-1.
Dorado-2 appraisal well also tested the Milne reservoir with samples recorded as oil bearing on the rig.
The very light nature of this oil may result in this hydrocarbon phasing being re-classified as a highly condensate rich gas.
No water contact was encountered in the Milne section in the well.
Importantly, Dorado-2 encountered high quality and productive reservoirs in each target.
Initial indications are that fluid compositions are similar to the light oils and gases that were sampled in Dorado-1, where high condensate yields range from 70 to 245 barrels per million standard cubic feet.
This is pending confirmation from laboratory analysis.
“Excited for future”
Carnarvon has started preparing updated volumetric estimates based on the results of Dorado-2.
The MD concluded: "Overall, I’m very pleased with the result from this well and incredibly excited for the future of our company.”