Carnarvon Secures Funds for Thai Development Project

Carnarvon Petroleum has reached agreement with Gemini Oil & Gas Limited, a specialist oil and gas finance group, to fund the Phase 2 development of the Wichian Buri Oil Field in the SW1A Concession in Central Thailand. Carnarvon has a 40% working interest in the field and in SW1A.

US $2 million will be provided to the SW1A Joint Venture partners in proportion to their respective participating interests to enable the drilling of up to four development wells to exploit the oil producing F Sandstone. The development wells will be drilled in Production License I and, when awarded, PL II. PL I is a 2 square km area containing the producing wells WB-1, WB-A1, WB-N2 and WB-N3. PL II is a similar-sized area to the east of PL I and includes the WB-N1 well which is currently shut-in pending the formal award of the license. The entire SW1A Concession is some 37 square km in area. Under the funding arrangement, the JV partners will pay a percentage of the sales proceeds of oil produced from the F Sandstone in PL I and PLII. The percentage decreases once Gemini receives US$2 million.

The provision of the funding underscores the confidence in the potential of the field of both the JV partners and an independent technically-respected international financier. The new wells will be drilled as part of the Phase 2 development of the Wichian Buri Oil Field. The objective is to optimally exploit the proved recoverable reserves of some 5 million barrels of oil already discovered in the F Sandstone as well as to appraise its further potential.

Proved reserves have been discovered by wells WB-1, WB-A1, WB-N1, WB-N2 and, most recently, WB-N3. The reservoir rock, oil properties, reservoir pressures and other technical data indicate that the wells are in a common accumulation. Most likely (proved plus probable) reserves are calculated as 10 million barrels.

The SW1A Joint Venture consists of Carnarvon Petroleum NL (40% interest) and Pacific Tiger Energy Inc (60% - operator).