Carnarvon Petroleum Limited (ASX:CVN) surged more than 51% on news of a significant oil discovery at the Dorado-1 well on the North West Shelf, off the coast of Western Australia.
The joint venture between Carnarvon and Quadrant Energy has made the discovery in the primary target of the well, the Caley Member.
Light oil has been recovered from an excellent reservoir in highly porous and permeable sands.
The reservoir contains a gross hydrocarbon package of 96.1 metres and a net pay thickness of 79.6 metres.
“Transformation result”
Carnarvon managing director Adrian Cook said the result was transformational for the company and investors responded, lifting shares to a new 12-month high of 26.5 cents.
“This is a significant discovery given the quantum of the net pay thickness, the quality of the oil and the extremely good reservoir characteristics,” he said.
“Currently, we estimate the net oil pay is around 80 metres and with more drilling still to come this is very exciting for Carnarvon Petroleum.
“With multiple targets still left, the focus now is to complete the drilling program through the Baxter, Crespin and Milne members.
“In April we highlighted the possibility that the Dorado structure could contain a substantial oil accumulation.
“Given this outcome has now occurred, Carnarvon will make an assessment of and issue a revised volume estimate as soon as we possibly can once drilling operations have finished.”
The results were confirmed after wireline testing was undertaken at the Dorado-1 well, after it drilled down to around 4,044 metres measured depth (MD) in 8-1/2 inch hole.
Currently, the well is still in a hydrocarbon-bearing column.
Excellent reservoir characteristics were interpreted from the logging with average porosity of around 20% with hydrocarbon saturation of 82.5%.
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The high quality of the reservoir was further reinforced by the rapid time taken to extract the oil samples and the high mobility recorded while undertaking formation testing.
A combination of light oil and excellent reservoir characteristics support the potential for high flow rates on production.
Predicted Lithology at Dorado from the 2017 Seismic Inversion Project.
Baxter Member shows promise
Drilling at Dorado-1 has also identified hydrocarbon-bearing sand in the Baxter Member with drilling and evaluation still to be completed in this section.
The well will be deepened to about 4,550 metres MD to evaluate the newly discovered sand and the secondary targets in the Crespin and Milne members.
It is likely that a 7-inch liner will be set prior to drilling into the Crespin and Milne members.
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Carnarvon previously disclosed prospective resources for Dorado of 545 Bscf of gas and 30 million barrels of associated condensate, being 125 million barrels of oil equivalent.
On April 30, Carnarvon noted that there was a possibility for the structure to contain a substantial oil accumulation.
Given the oil discovery outcome, Carnarvon a revised volume estimate will be issued as soon as it can following the completion of drilling, which will be a contingent resource of oil.