The move adds another high quality asset to Carnarvon's growing portfolio of oil and gas exploration projects in the area.
WA-523-P is highly prospective with circa 1.3 billion barrels of oil equivalent nearby.
Adrian Cook, managing director, commented:
"This area of the North West Shelf has tremendous opportunity and is an important addition to our portfolio.
"The permit could clearly fulfil our strategic intent: 'to find and commercialise major oil and gas resources on the North West Shelf'.
"Without doubt, the mapped prospectivity in this proven oil province, and within the permit, has outstanding development potential."
WA-523-P includes the Buffalo Oil Field that produced around 20 million barrels of high quality oil and was flowing around 4,000 barrels of oil a day when operations ceased in 2004.
Depending on oil price and remapping of the field, Buffalo may be a commercially attractive re-development opportunity in the future, perhaps for tie-back to nearby facilities.
Carnarvon acquired WA-523-P through the Government gazettal process by successfully bidding a work program comprising reprocessing existing 3D seismic data and interpretation and analysis of the data within the initial firm three year term.
Carnarvon has already initiated the reprocessing work which is expected to take around 12 months to complete.
If the results prove successful, Carnarvon at its discretion may commit to acquire new 3D seismic data and drill a well over the course of the following three years.
North West Shelf footprint
Carnarvon's present acreage on the NWS is circa 35,000 square kilometres (~18,700 squre kilometres net to CVN).
WA-523-P covers 4,220 squre kilometres and is located in the northernmost extent of Western Australian waters.
The new permit is also closely proximal to proven oilfields at Laminaria, Corallina, Kitan, Jahal, and Kuda Tasi that collectively contain around 280 mmbbl initially recoverable all lying within 15 kilometres of WA-523-P.
Further south, the giant Bayu-Undan gas/condensate field, and the Kakatua and Elang oil fields lie just 25-40 kilometres to the east of WA-523-P.
In total, within about 40 kilomertes around WA-523-P, these discovered fields
are estimated to collectively contain about 730 million1 barrels of oil and 3.4 Tcf of gas.
This is a quality acquisition secured at the right time in the cycle, securing a rare opportunity for a fraction of the cost of the commitments made by peers in bid rounds only a year or two ago.
Carnarvon has picked up assets before during difficult times, and benefited from the move, such as the acquisition of the Phoenix project during the GFC period of 2009.
Prior to this acquisition, Hartleys placed a Speculative Buy and a $0.16 12-month price target on Carnarvon.
Carnarvon's current cash balance is close to A$100 million, or $0.098 per share.
Carnarvon last traded at $0.097, under cash-backing.
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