Following completion of the farm-out to Advance Energy, Carnarvon received US$20 million to fund the drilling of the Buffalo-10 well. This means the drilling will be at no cost to Carnarvon unless the well costs more than US$20 million.
The procurement of long lead equipment has commenced, with orders placed for the supply of conductor pipe, well head, liner hanger and associated services. This long lead equipment is planned to be available before the end of 3Q21.
A tender process for the drilling rig is nearing completion, with the requirement for a suitable jack-up rig to be available in 4Q21.
Carnarvon has also commenced the process of securing the necessary Timor-Leste Government approvals for drilling the well.
Carnarvon Managing Director and CEO, Adrian Cook, said: “I’m pleased to be able to report that the Carnarvon and Petrofac teams are making clear progress in our preparations to drill the Buffalo-10 well this year.
A drilling result that meets pre-drill expectations will provide a material value catalyst for Carnarvon and its partner, particularly given the low capital and operating costs per barrel that are expected to arise from production operations.
The nature of the field, particularly in terms of it being in shallow water, also enables a development facility to be installed in a timeframe that has the potential to result in the generation of earnings and cash flows well ahead of that arising from our larger Dorado development.
The consequence of these outcomes is important in terms of its value generation and strategic optionality for the company.”
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The consequence of these outcomes is important in terms of its value generation and strategic optionality for the Company.”