Carnarvon Energy’s (ASX:CVN) sale of a 10% stake in the Dorado project will see it shift from an exploration model to production, company CEO Adrian Cook has said.
“Carnarvon is transitioning from explorer to producer through development of the Dorado and Pavo discoveries in collaboration with operator Santos. The company plans to fund about half of its share of developing Dorado with cash and the balance will be debt-funded,” he told Energy Voice.
Cook was commenting, via email, after the company reached a binding agreement with Taiwan’s OPIC Australia, a subsidiary of CPC. OPIC is buying a 10% stake in Dorado – half Carnarvon’s interest – for $146 million.
Santos holds the remaining 80% stake.
The CPC unit will pay $56mn upfront on completion. OPIC will pay another $90mn to carry Carnarvon’s share of costs, following a final investment decision (FID).
“The company plans to fund about half of its share of developing Dorado with cash and the balance will be debt-funded,” the Carnarvon CEO said.
Carnarvon expects completion before the end of August. The Foreign Investment Review Board (FIRB) has approved the sale, marking the last hurdle before completion.
“Dorado is expected to produce an initial 75,000-100,000 barrels per day gross”, Cook said. The group will extend the oil rate plateau extended “significantly as Pavo North and Pavo South (currently undrilled) come online”.
Pavo is 46 km to the west of Dorado. This bolt-on discovery “complements Dorado’s production profile and will help achieve development scales of economy”, the executive said.
Dorado and Pavo together hold 189 million barrels of liquid gross 2C resources.
Australia’s National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) approved the offshore project proposal for Dorado in February this year.
Santos has said the initial phase will include gas reinjection with a well head platform and FPSO. Under the second phase, the operator will recover the gas and pipe it onshore, for domestic markets and LNG.
“Carnarvon has significant exploration upside across its Bedout sub-basin licence areas,” said Cook. “We’ve identified another 100 prospects in the Bedout with the top 20 estimated to hold more than 1.5 billion boe of liquids (Pmean, gross). These are priorities of future methodical and high grade drill campaign considerations.”