Carnarvon and its partner will license modern 3D and 2D seismic that is being acquired over the Phoenix area in the North West Shelf off Western Australia.
This will allow the joint venture including Apache Corporation (NYSE:APA), JX Nippon and Finder Exploration, to identify more oil and gas prospects.
In December, the Phoenix South-1 well in WA-435-P was confirmed as a light oil discovery with exceptional quality and highly favourable mobilities.
The Polarcus Asima seismic vessel has started acquisition of the large Capreolus 3D multi-client seismic program.
The JV will license about 5,100 square kilometres of this program over WA-435-P and WA-437-P.
This increases the total modern 3D seismic to about 10,000 square kilometres of the 22,000 square kilometres covered by the four contiguous Phoenix area permits.
Additionally, a new two dimensional seismic acquisition program will acquire modern 2D seismic data over most of the remaining acreage holding.
Carnarvon will invest about A$10 million from existing cash to fund its share of acquiring the seismic data.
"The Phoenix South-1 oil discovery last year is important in terms of the potential for the Phoenix South structure but on a larger scale it provides significant encouragement regarding the hydrocarbon prospectivity within the Phoenix area," managing director Adrian Cook said.
"To refine our understanding of this prospectivity we need to further build our regional understanding and these data sets will be integral to that.
"The decision by the Joint Venture partners to acquire such a large data set was driven by the current assessment of prospectivity and the current timing is based on significant cost efficiencies and consideration of the timeframes necessary to prepare future drill ready prospects.
"This initiative will become particularly important, and valuable, if the outcome of the Roc-1 well is as we hope later this year."
Carnarvon and Finder Exploration were the first to licence 3D seismic data in the Phoenix area that now contains the Phoenix South-1 oil discovery.
The first 3D seismic acquisition in this area (the Phoenix MC3D) covered 1,100 square kilometres and was acquired late in 2010 / early 2011.
In late 2011 / early 2012 a second 3D seismic acquisition program (the Zeester MC3D) acquired an additional 3,854 square kilometres.
Recently, the current JV agreed to licence this data following the success of the Phoenix South-1 well.
With the Capreolus MC3D, the JV will have modern 3D seismic data covering some 10,000 square kilometres of the approximate 22,000 km2 covered by the four contiguous Phoenix area permits (WA-435-P, WA-436-P, WA-437-P and WA-438-P).
This 3D seismic data is specifically intended to enable future exploration within the primary Triassic and Jurassic reservoirs within the Phoenix area.
Along with the Bilby 2D seismic, this will provide important new insights regarding the regional geology and its prospectivity. The objective will be to use this data to identify new and refine currently identified prospects and leads for possible future drilling.
Operator Apache Corporation is currently undertaking the technically complex and thorough process of assessing the Phoenix South-1 well results on behalf of the joint venture.
The length of the evaluation period is due to the discovery of a new oil bearing hydrocarbon province when gas was anticipated as well as low porosity rock interspersed with intervals of potential high flow characteristics.
Discovering a new oil bearing hydrocarbon province means that any previous work is either redundant or requires re-evaluation.
Carnarvon is fully funded for further activity in the North West Shelf in 2015.
Besides holding $48.5 million in cash as at the end of the September quarter, it has also reached an agreement to sell its remaining 20% interest in the Thailand oil production concessions to the Netherlands company Berlanga Group for US$58.2 million (A$68.5 million) in cash.
This is scheduled for completion on or before 16 February 2015.
Following this, the company is forecast to have more than A$100 million in cash, or about A$0.10 per share.
It also retains its US$32 million receivable as part of the Loyz transaction earlier in 2014.
Carnarvon Petroleum's investment of about $10 million from its existing cash demonstrates its confidence in finding more oil and gas prospects in Australia's newest hydrocarbon province.
The 3D and 2D seismic will also provide important new insights regarding the regional geology and its prospectivity.
Investors should also remember that the company is fully funded for its North West Shelf activities with the recent agreement to sell its remaining Thailand production assets poised to increase its cash balance to over A$100 million.
News flow ahead includes a more comprehensive update on Phoenix South-1 sometime toward the end of the first quarter of 2015; drilling of Roc-1 in the middle of 2015; and finding a partner for the Cerberus blocks in the offshore Carnarvon Basin, Western Australia.
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