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Carnarvon Petroleum Updates On Thailand Oil Wells, Shares Up 52% Since January

Carnarvon Petroleum (ASX: CVN) and operator Towngas have completed and placed into production four oil wells in their onshore Thailand concessions since the beginning of this year.

The company is selling half its 40% interest in SW1, L44/43 and L33/43 to Singapore's Loyz Energy (SGX: 594) for up to US$65 million (A$72 million).

Gross production from the Wichian Buri Extension area in L44/43 - including the new wells - has varied from 1,200 barrels of oil per day to 3,600bopd over the past few days.

Drilling

Three wells have been drilled and completed in the Wichian Buri Extension area in L44/43 targeting the igneous V1 and V2 reservoirs, namely WBEXT-4BST1, WBEXT-2AST2 and WBEXT-3C.

A further well has been drilled in the L33/43 permit to the north targeting the igneous, L33-2D.

The final well in the current campaign, the WBEXT-5A exploration well targeting sandstones to the east of the extent of the current production area, is currently being drilled.

Production

Gross daily oil production, including testing from the recently completed wells, has varied in the range of 1,200bopd to 3,600bopd over the past few days, with one well in particular in initial testing phase exhibiting typical flush production responses with rates over 2,500bopd.

Previous wells in this region, in similar reservoir, have produced at similar rates for one to three months before water ingress results in significant declines in production rates.

After the initial testing phase of one to two weeks, it is anticipated that the well flow rates will be reduced, by decreasing the tubing choke size, in order to sustain production rates.

Analysis

Shares in Carnarvon Petroleum have risen 52.7% in the past three months.

Proactive Investors had on 21 November 2013 noted that Phoenix South could provide a double or triple "play" on its market cap of $71.27 million at that time. Since then, its market cap has risen to circa $93 million and we continue to believe there is room for growth.

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