Carnarvon Secures Funds to Drill at its North West Shelf Permits

Carnarvon Petroleum Limited (Carnarvon) disclosed Tuesday that it has entered into new agreements with Apache Northwest Pty Ltd (Apache) which secure additional funding for drilling activities on its highly prospective North West Shelf permits off Western Australia.

Apache has agreed to fund Carnarvon’s share of costs for the Phoenix South-1 well and the Roc well (contingent) up to an increased cap of $70m (gross cost per well).

Carnarvon retains its 20 percent interest in the wells, which are contained within WA-435-P and WA-437-P respectively.

Carnarvon and Finder Exploration Pty Ltd (Finder) will grant Apache an option to acquire a 40 percent interest in WA-436-P and WA-438-P (20 percent from Carnarvon and 20 percent from Finder), for a nominal consideration to be exercised on or before July 3, 2014. Upon exercising the option, Apache will assume operatorship of these permits and Carnarvon will hold a 30 percent interest in each of WA-436-P and WA-438-P.

Managing Director and CEO, Adrian Cook said, “this transaction, in conjunction with the recently completed Entitlement Offer, enables Carnarvon to be fully funded through the Phoenix South-1 and Roc wells and if Apache exercises the option, will secure a world class operator across these four contiguous permits.

In addition to drawing forward value to the more immediate Phoenix South-1 well and the contingent Roc well, the transaction creates the platform to commercialize the value of the Company’s North West Shelf acreage and create increased value for shareholders. In the event of success at Phoenix South-1 well, we anticipate this increase will be significant.”

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