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Carnarvon Petroleum and Santos return one of highest oil flow rates from a North West Shelf appraisal well test

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Partners confirm that the main oil pool in the field is capable of producing flow rates at the higher end of pre-drill expectations.

Carnarvon Petroleum Ltd - Carnarvon Petroleum and Santos return one of highest oil flow rates from a North West Shelf appraisal well test

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Carnarvon Petroleum Limited (ASX:CVN) and partner Santos Ltd (ASX:STO) have returned an oil flow rate from the Dorado-3 well in the Dorado oil & gas field that is one of the highest from a North West Shelf appraisal well test.

The initial clean-up flow test of Caley reservoir achieved a maximum measured rate of approximately 11,100 barrels of oil per day and 21 million standard cubic feet of associated gas per day through a 68/64” choke.

This test was conducted for 12 hours over an approximate 11-metre section of net Caley reservoir between 3,999 and 4,015 metres Measured Depth and achieved with only 220 psi of drawdown.

Flow rate constrained

As with the recent Baxter reservoir flow test, the rate was constrained by the capacity of the test equipment on the rig.

Shares were up more than 13% in early trade to 43 cents.

Carnarvon managing director Adrian Cook said, “These results are the highlight of an incredibly successful 2019 appraisal program in which we have now confirmed a very large resource of oil and gas at Dorado and prolific production flow rates.

“An exceptional project”

"Dorado is an exceptional project given these appraisal outcomes and is complemented by its local jurisdiction, location in shallow water and services advantages, given its proximity to shore and supporting infrastructure which will aid development and operational costs.

"Our strategy set us a clear plan a number of years ago and we have pursued this consistently and tenaciously, even with recent challenging industry conditions.

"We are now very proud and excited to announce these results and in effect the highly successful conclusion of our assessment of the Dorado resource.”

Second flow test

The Caley flow test was the second of two for the Dorado field, following the Baxter test late last month which confirmed excellent productivity and fluid quality.

Together, these results indicate the potential for field production flow rates at the higher end of expectations.

The JV considers that they strongly support progress towards FEED entry in early 2020.

Dorado-3 is in petroleum permit WA-437-P, in which Santos is the operator and has an 80% interest, with Carnarvon holding the balance.

It is in Commonwealth waters about 160 kilometres north of Port Hedland and 1-kilometre northwest of the Dorado-1 discovery, made in July last year.

“Significant step”

Santos managing director and chief executive officer Kevin Gallagher said the test result was extremely positive and represented a significant step in progressing Dorado as one of Santos’ most exciting new development projects.

He said, “The test was conducted over only an 11-metre net section of the Caley from a total net reservoir interval of 53 metres, which demonstrates the high quality of the Caley reservoir.

“The results are very encouraging for development of the shallow-water Dorado field, with the test indicating very high potential flow rates of around 30,000 barrels per day from each single production well in the Caley reservoir.”

Dorado-3 was drilled using the jack-up mobile offshore drilling unit, Noble Tom Prosser, in a water depth of 95 metres and reached a total measured depth of 4,643 metres.

Final well in 2019 program

Once operations are completed, the well will be plugged and abandoned as planned, thereby concluding the JV’s 2019 offshore drilling program.

Cook said, “Our future now moves to a new form of value generation for our shareholders, namely focused on the development and production of the Dorado field.

“Whilst focused on development, we also retain our intention to pursue a suite of the most exciting exploration prospects in Australia situated around the Dorado field.

"We look forward to advancing the Dorado project and our exploration opportunities with our partner and thank them and their team for their efforts this year in delivering a successful 2019 drilling project in a safe and cost-effective manner.”

The composition of oil and associated gas that has flowed to surface on the test from the Caley reservoir are as anticipated with no basic sediments and water.

Non-hydrocarbon gases are nominal with around 1.8% carbon dioxide.

Testing of the Caley reservoir has continued beyond the initial clean-up flow with a series of pressure build-ups and multi-rate flow tests to gather important reservoir information.

A significant amount of hydrocarbon fluids was also collected to assist in the development studies.

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