Carnarvon Confirms Condensate Rich Gas Find at Roc-1 Well in Block WA-437-P

Carnarvon Petroleum Limited (Carnarvon) provided Monday the following update on drilling operations as advised by the operator of the Roc-1 well in permit WA-437-P offshore Western Australia, Quadrant Energy.

Progress

Since the last report the wireline logging program has been successfully completed and the rig has left the Roc-1 location.

Laboratory analysis of the gas recovered from the well has confirmed condensate rich gas. Important information from the initial analysis is the confirmation of a condensate to gas ratio at the top end of the range previously announced of 20 to 40 barrels per million cubic feet of gas.

Forward Plan

Carnarvon estimates it will be in a position to advise the market on the expected range of recoverable volumes of gas and condensate within the next six weeks.

Carnarvon’s joint venture partner, privately owned Finder Exploration, recently released on its website preliminary information on the well results. In the interests of ensuring that stakeholders in the Roc-1 well possess similar information relating to the well, the release of Finder Exploration is attached for the information of Carnarvon shareholders. Carnarvon reiterates that the information provided is preliminary, subject to the completion of well data analysis and does not comply in all respects with the disclosure standards of information prepared for release to the market by Carnarvon. As such, shareholders should exercise caution in their use of the information released by Finder Exploration. (Carnarvon retracted the information provided by Finder later the same day upon request by the Australian Stock Exchange as it prohibited under ASX Listing Rule 5.25.3).

Appreciating the Roc-1 well has just completed and data from the well needs to be properly assessed, a decision on the timing and location of the Roc-2 well has not yet been considered by the joint venture. This will be done in due course and will be subject to joint venture and government approvals and rig availability.

Cost Estimate

The cost for the Roc-1 well was on budget inclusive of success case logging, sampling and coring costs. Under previous farm-out agreements, in exchange for equity in the permits, Carnarvon bore no cost for this well.

Under the above mentioned farm-out agreements there remains a carry contribution towards any further drilling or testing in the WA-437-P permit of approximately $20.7 million (AUD 30 million) to $27.6 million (AUD 40 million) (gross).

Managing Director’s Comment

Carnarvon’s Managing Director, Adrian Cook in commenting on the well results said “On behalf of the Carnarvon board and management I extend our appreciation to the Quadrant Energy team for their efforts in successfully executing these drilling operations in a safe, timely and cost effective manner.

I’m becoming increasingly encouraged by the initial well results that we’ve seen to date, particularly the new information pointing to a strong condensate to gas ratio. Whilst significant work will be undertaken in the coming months, a key priority will be to complete an estimate of the recoverable volumes involved, a process that is currently underway.”

Location

The Roc-1 well is located in WA-437-P, approximately 12 miles (20 kilometers) south-east of the 2014 Phoenix South-1 oil discovery, and around 93 miles (150 kilometers) north of Port Hedland.

The equity interest holders in WA-437-P are:

• Carnarvon Petroleum - 20 percent
• Quadrant Energy (Operator) - 40 percent
• JX Nippon - 20 percent
• Finder Exploration - 20 percent