Buffalo Advancing to Drilling

Carnarvon Petroleum Limited is pleased to update shareholders on the farm out of the Buffalo project to Advance Energy plc and the Buffalo-10 well.

Advance Energy has, subject to shareholder approval, successfully raised the capital to acquire a 50% interest in the Buffalo project. In return Advance Energy will fund the Buffalo-10 well on a free carried basis up to a cap of US$20m. This means the drilling will be at no cost to Carnarvon unless the well costs more than US$20m. The transaction has been approved by the government of Timor-Leste.

It is expected that the transaction will complete after Advance Energy receives shareholder approval, which is scheduled for mid-April 2021.

Carnarvon has also continued to make progress to drill the Buffalo-10 well this year. Tendering and procurement processes are already underway, including negotiations to secure a drilling rig.

Carnarvon Managing Director and CEO, Mr Adrian Cook, said:
“We congratulate Advance Energy on their capital raise and welcome them to this exciting project. The project team is well advanced in their work to drill the Buffalo-10 well in 2021. The well will be suspended so that it can be used for future production. Development plans will also be progressed this year so that it provides us with the opportunity to execute the planed operations to first oil in a short period of time. The Buffalo project is progressing well and looks to be positioned for a window in time where there are now forecasts of shortages of quality oil from projects like Buffalo”.

About Buffalo Redevelopment Project
Carnarvon was awarded the WA-523-P permit, which included the previously developed Buffalo field, in May 2016 for an initial six-year term. The Field was discovered by BHP in 1996 and subsequently developed using four wells drilled from a small, unmanned wellhead platform installed in 25 metres water depth, tied back to an FPSO. Production commenced in December 1999 at production rates up to approximately 50,000 stb/d and terminated in November 2004 after the production of 20.5 MMstb of highly-undersaturated, light oil (53°API) from the Jurassic-age Elang Formation. All existing facilities and wells were decommissioned and removed prior to Carnarvon being awarded the permit.

Carnarvon initially focussed its technical work on reprocessing of the 3D seismic dataset using state-of-the-art full waveform inversion (FWI) technology. This work supports the interpretation of a significant attic oil accumulation remaining after the original development, based on sub-optimal positioning of early wells using poorly processed seismic data. Reservoir modelling has been conducted using the latest structural interpretation and available well data, including an extensive history-matching effort to calibrate model/well performance to production rates and water-cut development (governed by strong aquifer drive) observed during the original production period.

Based on this work, independently audited volumetric estimates of contingent resources in the Buffalo oil field are 31.1 million barrels (2C) with low estimates of 15.3 million barrels (1C) and high estimates of 47.8 million barrels (3C) - Refer to Carnarvon Petroleum’s ASX announcement on 28 August 2017.

Resource Information
The estimates of contingent resources included in this report have been prepared in accordance with the definitions and guidelines set forth in the SPE-PRMS.

A combination of deterministic and probabilistic methods were used to prepare the estimates of these contingent resources.

The resource estimates outlined in this report were compiled by the Company’s Chief Operating Officer, Mr Philip Huizenga, who is a full-time employee of the Company. Mr Huizenga has over 20 years’ experience in petroleum exploration and engineering. Mr Huizenga holds a Bachelor Degree in Engineering and a Masters Degree in Petroleum Engineering. Mr Huizenga is qualified in accordance with ASX Listing Rules and has consented to the form and context in which this statement appears.

Carnarvon is not aware of any new information or data that materially affects the information included in this announcement and that all material assumptions and technical parameters underpinning the estimates in this Presentation continue to apply and have not materially changed.