Australia’s Carnarvon Energy (ASX:CVN) reported that the recent Pavo-1 exploration well drilled offshore Australia proved up a “substantial volume of light oil in excellent quality reservoirs” and “significantly increases Carnarvon’s oil resources for potential development through the Dorado facilities.”
The Pavo-1 exploration well, about 46 kms from the Dorado field offshore Western Australia in the Bedout sub-basin, made a “significant oil discovery” that has an estimated breakeven cost at less than $10 per barrel, operator Santos (ASX:STO) said in March.
“As we reported a little over a month ago, the Pavo-1 well result is another stellar exploration success in Carnarvon’s history in the Bedout Sub-basin,” Carnarvon managing director Adrian Cook said in a statement on Monday.
“When we consider Carnarvon’s share of the Dorado field oil resource is 32 million barrels (2C), the addition of 13 million barrels (2C) in Pavo North and 16 million barrels (prospective Pmean) in Pavo South holds great significance to the company and its shareholders,” he added.
“Importantly, Pavo has the potential to maintain high flow rates through the Dorado production facilities and thereby preserve the field’s low operating costs per barrel for an extended period of time,” said Cook.
“The success of the Pavo-1 well has also led the joint venture to consider its upcoming appraisal and exploration campaigns in the Bedout Sub-basin. Carnarvon is working closely with the operator, Santos, to define these targets and will provide more information to shareholders in due course,” he noted.
The Dorado field and facilities are located in the WA-64-L production licence, in which Carnarvon holds a 20% interest. Pavo is located in the WA-438-P exploration permit, in which Carnarvon holds a 30% interest.
The Dorado production facilities will consist of a wellhead platform connected to a floating production, storage and offloading (FPSO) vessel located approximately 2 kilometres from each other. The design for the facilities allows for flexibility to bring in hydrocarbon fluids (liquids and/or gas) from other fields for processing and storage, with provision for a future phase of gas production and export, said Carnarvon.
During initial oil production of the Dorado field (Phase 1), gas will be re-injected to enhance the oil recovery. This will result in very high initial rates of oil production, with the facilities being designed to handle rates of up to 100,000 barrels of oil per day.
Fluid production rates from Dorado are expected to naturally decline after a plateau period of one to two years, at which time there will be spare capacity in the crude oil handling facilities, allowing for back-fill from new fields such as Pavo.
“Given the excellent reservoir quality in the Caley Member, the Pavo North field could be developed with a relatively low number of production wells and tied-back to the Dorado FPSO. The Pavo South accumulation (once drilled and confirmed) could also be tied-back with additional wells potentially being connected to the Pavo facilities,” added Carnarvon.