The September quarterly activities for Carnarvon Energy Ltd (ASX:CVN) involved momentum on its flagship Dorado Phase 1 liquids development project, a key appointment to its board and a strong cash position.
Dorado development
Progress continued on the Dorado WA-64-L project, where Carnarvon holds a 10% interest with Santos as the operator at 80%.
Dorado, 150 kilometres off the coast of Western Australia, is the nation’s largest undeveloped oil field.
The project targets include an initial Phase 1 liquids extraction phase followed by a Phase 2 gas export phase.
The joint venture is refining the project’s development plan, which includes a fixed wellhead platform (WHP) connected to a floating production, storage and offtake (FPSO) vessel.
This set-up will handle various processes, including oil and condensate stabilisation, gas compression and reinjection and water treatment.
With gas reinjected to boost oil and condensate production during Phase 1, the gas resource is expected to support the Phase 2 export phase.
Current technical studies to optimise production rates and infrastructure sizing are on track and front-end engineering design (FEED) re-entry is anticipated for the December quarter, setting the stage for a targeted final investment decision (FID) in 2025.
Carnarvon CEO Philip Huizenga said: “While we eagerly anticipate FEED re-entry for the Dorado Project during the next quarter, we are encouraged by the ongoing progress being undertaken with respect to the various technical studies that are supporting the conceptual re-shaping of the initial liquids’ development project.
“As noted previously, the re-shaping has allowed the joint venture development team to assess various options for the key infrastructure, which continued during the quarter.
“With FEED re-entry anticipated for the December quarter, expected to build on the extensive work already undertaken, we look forward to the joint venture being able to progress the project towards FID, which is targeted in 2025.”
Bedout exploration
In the Bedout sub-basin, where Carnarvon holds between 10–20% interests, exploration planning is advancing with a focus on unlocking substantial gas resources to support the Phase 2 Dorado gas export development.
The sub-basin, regarded as one of Australia’s most promising exploration areas, holds a prospective resource estimate of 9 trillion cubic feet (Tcf) of gas and 1.6 billion barrels of liquids.
With sufficient liquid resources in Dorado and the nearby Pavo field, the partnership will be able to optimise throughput at the Dorado facilities.
Exploration drilling is planned for 2026, pending rig availability and environmental approvals.
Corporate changes and financial position
During the quarter, Carnarvon welcomed Susan Jones, an industry veteran with more than 25 years in the energy sector, as non-executive director.
Jones succeeds William Foster, who retired after 14 years of service. She brings expertise spanning legal, commercial, asset management and environmental, social and governance (ESG) leadership, with previous roles including executive vice president of Legal and ESG at Beach Energy (ASX:BPT).
“Susan’s experience will be a valuable addition to the board as it drives Carnarvon’s strategic directives, especially with respect to entering FEED and progressing to FID,” said Huizenga.
“I would also like to thank Bill Foster for his significant contributions to the company over the past 14 years.”
Carnarvon concluded the quarter with a robust A$177 million cash balance and no debt, bolstered by a US$90 million free carry on Dorado development costs.
The company said it had taken a prudent approach to cash management, balancing funds in Australian and US dollars to hedge against currency fluctuations.
Although it recorded an unrealised foreign exchange loss of A$3.12 million, interest income continued to exceed corporate expenses, reflecting effective cost controls throughout 2024.
Carnarvon’s sharpened efficiency strategy involved the recent surrender of non-core exploration permits EP509 and TP29.
This decision allows the company to train its exploration focus on the high-potential Bedout Sub-basin.