Carnarvon Petroleum (ASX:CVN) has provided an update on the Phoenix South resource estimates following further technical work on the Phoenix South-2 well results.
Phoenix South is located on the North West Shelf of Australia, and Carnarvon holds a 20% interest.
Hydrocarbons were discovered in the Caley Member at the end of 2016.
Further technical work has determined that due to the pressures encountered, and the nature of the gas observed, the resource estimates in the Phoenix South Caley have been increased from pre-drill estimates.
The gross mean estimate is currently 489 bscf recoverable gas and 57 million barrels of associated condensate (being 143 million barrels of oil equivalent (boe), gross, Pmean) in a conventional anticline trapping structure.
Adrian Cook, managing director for Carnarvon, commented:
"Our strategy to test a number of prospects in our Phoenix project has produced the very real possibility of us having over one trillion cubic feet of gas and over 100 million barrels of oil and condensate within an area capable of being aggregated into a central development, only 150 kilometres offshore from important gas infrastructure near Port Hedland.
"The potential size of the Phoenix South Caley resource adds to the excitement of the recent Roc Caley discovery and its historic well test.
"Incorporating the large Dorado Caley prospect, that is expected to be targeted later this year, and this significant outcome is looking very possible.
"There is a great deal of work still to be undertaken, but our progress and success to date clearly makes this one of the most exciting projects in the Australian oil and gas sector at the current time."
Analysis
Certain data from the Phoenix South-2 well suggests there could be a stratigraphic component to the Caley structure which could materially increase the resource.
Carnarvon held $60 million in cash at the end of December 2016, and with a market cap of circa $95 million, the company has an enterprise value of $35 million.