Carnarvon Boosts Reservoirs in Thai Concessions

Carnarvon announced the results of an independent reserves evaluation of its Thailand concessions as at December 31, 2010.

Carnarvon has a 40% equity interest in the SW1, L33/43 and L44/43 on-shore concessions (Pan Orient Energy Corp. 60%). The reserves estimates data has been certified by international energy consultants Gaffney, Cline and Associates (GCA).

At the end of the calendar year, proved and probable reserves at Carnarvon's Thailand concessions totaled 20.4 million barrels. This comprised proved reserves of 4.7 million barrels plus probable reserves of 15.7 million barrels.

The estimates include new oil field discoveries in 2010 in the Wichian Buri Extension (WBExt) field within the L44/43 concession and the L33 field in the L33/43 concession. The increase in reserves in these fields was offset by a downward revision of previously announced reserves in the NSE Central and NSE-F1 fields within the L44/43 concession. Carnarvon indicated the potential for the downward revision at these two reservoirs in October 2010.

The net present value of proved and probable reserves after tax for the three concessions in Thailand, using forecast oil prices and discounted at 10%, is A$307 million, representing A$0.45 per Carnarvon share, based on the current 687.8 million shares outstanding and an exchange rate of A$1.00 / US $1.04.

CEO Comment

Carnarvon CEO Ted Jacobson said, "These reserves estimates provide us with a much better understanding of this series of oil fields and give us greater confidence in the assessment of remaining oil.

"These are important assets for Carnarvon; they provides us with important cash flow and exploration and appraisal upside whilst enabling us to continuing to focus on upside via exploration and acquisitions in other regions.

"While we expected the revisions in reserves for the NSE Central and NSE-F1 reservoirs, the greater percentage of more conventional sandstone reservoirs means a longer, more consistent and predictable production for Carnarvon moving forward once these sandstone reservoirs have been fully developed.

"We have a long future in this range of assets and are excited about the broader opportunities for Carnarvon that the long term positive cash flows can achieve," said Mr Jacobson.