Carnarvon Petroleum (ASX: CVN) has been granted a new oil exploration permit in shallow water in the prospective Bonaparte Basin within Western Australia’s North West Shelf.
The new exploration permit AC/P62 encompasses 1,512 square kilometres in the Vulcan Sub-basin and is near to producing oil fields Montara, Jabiru, Skua and Challis.
A Cygnus 3D survey was conducted over 682 square kilometres of the permit area, which Carnarvon believes will assist with interpretation and provide added value than previous exploration data.
The company has identified several large targets with multiple reservoir levels.
As part of its current work program, Carnarvon will investigate a number of geoscience workflows, including a satellite seep survey, high-resolution biostratigraphy, fluid inclusion analysis, petrophysical reviews, burial modelling, fault sea analysis, rock physics analysis and seismic inversion of the Cygnus 3D.
“This is Carnarvon’s first permit within the Vulcan Sub-basin, adjacent to the Skua and Montara oil fields,” Carnarvon managing director Adrian Cook said.
“Given the shallow water depths, jack-up drilling is possible, meaning the potential for lower cost drilling and field developments in the permit,” he added.
In addition to this latest permit, Carnarvon owns interests in various other permits off the coast of northern Western Australia including its 100%-owned Buffalo project.
The Buffalo project has a contingent resource estimated of 31 million barrels, with potential revenue of US$1.5 billion at current oil prices.
In September, Carnarvon put out an ASX announcement regarding Buffalo after receiving several investor queries about how previous operators missed such a significant volume of oil.
The company responded saying it had been able to gather more precise detail from seismic data and full waveform inversion, which, combined, enabled the company to better-understand the oil field structure.
Carnarvon claims using the latest technology will help unlock potential like this at its other projects including the newly acquired AC/P62 permit in the Vulcan Sub-basin.
Oil market outlook
In its Monthly Oil Market Report, the Organisation of the Petroleum Exporting Companies (OPEC) revealed the OPEC reference basket rose to US$54.44 per pound in September – the highest it’s been since mid-2015.
The report attributes the rising oil price to improving market fundamentals and the oil market rebalancing.
Global oil demand is expected to rise by 1.5 million barrels of oil per day in 2017 compared to 2016 levels.