Apache Makes Major Oil Find at Phoenix South-1 Well in North West Shelf

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Apache makes a major oil discovery at Phoenix South-1 well in permit WA-435-P in the North West Shelf in Western Australia.

Carnarvon Petroleum Limited (Carnarvon) announced Monday a significant oil discovery in the Phoenix South-1 well in permit WA-435-P in the North West Shelf in Western Australia. The discovery represents one of the most significant developments in Australian oil and gas in recent times. At this preliminary stage it is too early to quantify the recoverable volumes of oil. Further technical evaluation of log and core data will enable Carnarvon and its partners to be in a position to make that information public by the end of 2014.

Managing Director, Adrian Cook said; “Carnarvon is excited to be part of this major new oil discovery at Phoenix South-1. This is the most significant new oil play in the North West Shelf since the Enfield discovery opened up the Exmouth Basin almost 20 years ago. The implications on the rest of our acreage are still being assessed, but the potential is extraordinary.

I’m very proud to be involved with the Carnarvon team in taking a very early position in this area with our initial partner, Finder Exploration. A great deal of credit for this discovery also rests with Apache Energy who is the operator of the Phoenix South-1 well. Despite some initial challenges and setbacks, this well has delivered a significantly better outcome than any of us could have imagined.”

The cost estimate for the well to completion, including additional drilling, is within the guidance previously articulated to the market, and Carnarvon’s net cost for this well is expected to be around $5.59 million (AUD 6 million). Carnarvon reported cash holdings of $46.57 millin (AUD 50 million) as at June 30 and accordingly is in a strong position to fund these costs.

A technical evaluation of the results to date is provided at the end of this report.

The discovery of oil in the Phoenix South-1 well in WA-435-P has significant implications for the rest of the permit and the surrounding 7,722 square miles (20,000 square kilometers), of which Carnarvon is holding a material equity interest. Work is currently underway to re-evaluate the previous Phoenix-1 discovery, and also the implications for the prospects at Roc-1 well in WA-437-P (Carnarvon 20 percent) and other prospects in the adjoining acreage. The technical work on this well and the basin wide work will take some time to evaluate to discover the full potential in this new oil play fairway.


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