Drilling of Dorado-3 well confirms production potential for Carnarvon Petroleum

Carnarvon Petroleum Santos ASX CVN STO Dorado-3 oil gas flow test
A flow test at Caley reservoir has exceeded 11,000 barrels of oil per day plus associated gas.

Initial flow testing of the Dorado-3 appraisal well within the offshore Dorado oil and gas field shared by Carnarvon Petroleum (ASX: CVN) and Santos (ASX: STO) has confirmed the Caley reservoir is capable of delivering oil at significant production flow rates.

The clean-up flow test across an 11m section, between 3,999 metres and 4,015m measured depth, was conducted over a 12-hour period and achieved a maximum measured rate of approximately 11,100 barrels of oil per day and 21 million standard cubic feet of associated gas per day.

The oil rate is one of the highest ever achieved from a North West Shelf appraisal well test.

The test indicated significantly high potential flow rates of around 30,000bpd from each production well in the Caley reservoir, located in the Bedout Basin offshore WA.

Carnarvon confirmed the composition of oil and associated gas which flowed to surface from Caley were “as anticipated” with no basic sediments and water and nominal non-hydrocarbon gases of around 1.8% carbon dioxide.

The completion of Caley will end the Dorado-3 well and Carnarvon’s 2019 well campaign.

Baxter tests

The results from the Caley reservoir complement formation flow test results released last month for the nearby Baxter gas and condensate reservoir, which confirmed excellent productivity and fluid quality.

A “better-than-expected condensate-gas ratio” is expected to bring higher well deliverability when the Dorado field is developed.

When combined, Carnarvon said the results from Baxter and Caley indicate potential for field production flow rates at the higher end of expectations and strongly support progress towards front end engineering and design (FEED) entry in early 2020.

Flow rates from both wells to date have been constrained by the capacity of the test equipment on the jack-up mobile offshore drilling unit, Noble Tom Prosser.

Successful program

Dorado-3 is located in petroleum permit WA-437-P, with Carnarvon retaining a 20% interest and Santos holding 80% as well as operator rights.

It is in Commonwealth waters approximately 160km north of Port Hedland and 1km north-west of the Dorado-1 discovery made in July last year.

Carnarvon managing director Adrian Cook said the results from Baxter and Caley have been the highlight of a successful 2019 appraisal program.

“We have now confirmed a very large resource of oil and gas at Dorado and prolific production flow rates,” he said.

“Dorado is an exceptional project given these appraisal outcomes and… we now move to a new form of value generation for our shareholders, focused on the development and production of the field.”

At mid-morning, shares in Carnarvon Petroleum were up 6.58% to $0.405.

Shares in Santos were 2.18% higher at $7.510.

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