Carnarvon Petroleum Limited (ASX:CVN) is buoyed by the release of early concept select information by Santos Limited (ASX:STO), the operator of the Dorado oil & gas joint venture project on the North West Shelf, offshore Western Australia.
Dorado oil, gas and condensate field was discovered in 2018 and has been successfully appraised this year.
Preferred development model
The project is in the late stages of the concept select phase for the liquids development with a view to beginning the Front End Engineering & Design (FEED) phase in early 2020.
A liquids development with gas-re injection is the preferred development model at present.
Carnarvon has a 20% interest and Santos has an 80% interest in the Dorado project.
“Potential for strong flow rates”
Managing director Adrian Cook said, “The information released by the operator demonstrates that the Dorado project has the potential for incredibly strong flow rates.
“Ultimately the initial flow rates will be dependent on the nature of the development.”
FEED phase in early 2020
During the FEED process, the final development and contracting strategy will be selected for key components of the development.
These include the number of wells and whether the joint venture leases or acquires an appropriate Floating Production Storage and Offtake (FPSO) vessel.
Cook added, “We look forward to finalising the concept select in the coming months and announcing the commencement of the FEED work in the new year.”
Early financing discussions
Carnarvon is in early discussions with domestic and international banks who have indicated interest in financing the majority of its share of the development capital with senior debt.
Oil traders have also indicated interest in providing structured finance as an additional source of funding to senior debt.
The company will begin a formal financing process once the development concept and contracting strategy has been finalised.