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Carnarvon Petroleum Ltd's Partner Outlines Outtrim East-1 Oil Discovery

Carnarvon Petroleum Ltd (ASX:CVN) partner Quadrant Energy has updated on drilling operations at the Outtrim East-1 well, located within the WA-155-P(1) exploration permit in the North West Shelf of Australia.

The North West Shelf is Australia's most prolific oil and gas region.

Quadrant is the operator with 71.5%, and Carnarvon 28.5%.

Progress

Since the last report the well has completed the coring operation, drilled down to final depth of 1,441 metres, and completed a revised wireline logging program.

Forward Plan

This completes the Outtrim East-1 well drilling operations and the rig will leave the location shortly.

Rig site evaluation

As planned, a total of 91 metres of core was cut with close to 100% of the core being recovered to surface.

The core is now being transported to shore for evaluation at laboratories in Perth.

The core evaluation is critical to determine the extent and quality of the net reservoir and estimate the in place and recoverable volumes in the Outtrim and Outtrim East structures.

The joint venture partners decided not to complete the full suite of logging activities, believing sufficient information has now been acquired to assess the well results to the extent planned.

Analysis

Carnarvon holds a market value of circa $100 million with $96 million cash, future cash flow up to $44 million and a well carry of $8 million.

Board and management, made up of North West Shelf experts, own 7% of the company.

Carnarvon has two material drilling outcomes within the next 6 months.

The first is the Outtrim East-1 exploration well where the target is to prove an oil aggregation play.

The second is at the Roc-2 appraisal well which aims to confirm that Carnarvon will take part of a material domestic gas project.

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