Carnarvon raising funds for further Dorado plans

Australia-based Carnarvon Petroleum has revealed plans to raise around $84 million via two share placements for funding further work on the giant Dorado discovery offshore Western Australia. 

The placements will be split into a fully underwritten institutional placement to raise approximately $79 million and a non-underwritten share purchase plan to investors in Australia and New Zealand, which will raise around $5 million.

The fully underwritten institutional placement will have an equity raising price of $0.39 per share.

According to the company, the proceeds will be used to fund ongoing appraisal activities and initial phases of the Dorado development, including FEED.

More precisely, the funds will be directed towards ongoing appraisal of the Dorado discovery, including 3D seismic and well costs, FEED studies for the development, and contribution towards the equity component of the initial Dorado development.

The funds will also be used for general corporate purposes, working capital requirements, and contingencies, including costs to progress the other company projects.

Dorado FEED by the end of 2020

Dorado is a major oil and gas field located on Australia’s prolific North West Shelf in water depths of 70 to 100 meters.

The resource was discovered through the Dorado-1 exploration well and further evaluated through the Dorado-2 appraisal well which confirmed the presence of oil, gas, and condensate resources.

The discovery has been described as one of the largest ever oil discoveries in Australia’s North Western Shelf. It was originally made by Quadrant Energy, a company subsequently bought by Santos.

The Dorado-2 well also confirmed that all reservoirs intersected are in pressure communication with equivalent reservoirs in the Dorado-1 well, approximately two kilometers away.

Dorado is estimated to hold 162 million barrels of liquids on a 2C or best estimate basis. A second appraisal well, Dorado-3 is scheduled to spud late July 2019 using the Noble Tom Prosser jack-up rig to confirm sub-surface characteristics, reservoir connectivity, and carry out flow testing ahead of FEED.

FEED is expected to begin in early 2020 and completed by the end of the same year. The company believes that this equity raising will fund Carnarvon’s share of upcoming Dorado project costs as it progresses to the development phase.

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