Carnarvon Petroleum Limited (CVONF) Phoenix South-3 Drilling Commenced

Highlights

- Drilling of the Phoenix South-3 well has now commenced

- Currently preparing to run 36" surface conductor

- Significant resource being targeted of 143 million barrels of oil equivalent (gross, Pmean)

- Objective is to fully evaluate the gas and condensate discovered in the Phoenix South-2 well

Progress

Since arriving on site, the rig successfully completed the 'ready to operate' process and has finished drilling the 42" hole in preparation to run surface casing.

Forward Plan

The 42" surface hole was drilled to around 240 metres MD in preparation for setting the 36" surface conductor. This conductor is slightly deeper than Phoenix South-2 to accommodate heavier casing strings as allowed for in this well's drill program. Following the setting of this conductor, the rig will drill the 26" hole, and set and cement the 20" casing. These operations are planned to take around 10 days to complete.

Well Objective

The primary objective for the Phoenix South-3 well is to evaluate the gas and condensate potential of the Caley Member within a large, faulted anti-clinal closure that was partially penetrated with the Phoenix South-2 well.

Phoenix South-2 encountered gas and condensate in the Caley Member but was unable to drill through and evaluate the formation. The Phoenix South-3 well has been optimally designed to penetrate and evaluate the hydrocarbon bearing formations of the Caley Member.

Phoenix South-3 is located around 560 metres North-North East of the Phoenix South-2 well. The well will target a closure that is estimated by Carnarvon to contain a gross mean recoverable prospective resource of 489 Bscf of gas and 57 million barrels of associated condensate (being 143 million barrels of oil equivalent ("boe"), gross, Pmean) - Refer to ASX Announcement on 28 March 2017.

The well is also expected to encounter sandstones within the Hove Member that may be hydrocarbon bearing.

Well Timing

Drilling of the Phoenix South-3 well is estimated to take around 90 days to reach the target depth of approximately 5,500 m MD. The Operator's plans encompass staged drilling just above and through the Caley reservoir section. The result is that drilling through the Caley reservoir section will progress slower than through the other sections of the well bore.

Formation Prognosis and Evaluation

The primary objective in this well, the Caley Member, is anticipated to be penetrated just above 5,200 m MD. The evaluation for the formations above this will be based on Logging While Drilling ("LWD") tools. Evaluation of the Caley Member will be initially via LWD tools as the section is drilled. Further evaluation is planned to be undertaken using a complete suite of wireline formation evaluation tools, including pressure testing and fluid sampling. No flow testing is planned for this well. The Caley formation was previously tested by the Roc-2 well and flowed at rates of around 55 MM scf/day and 3,000 barrels of condensate per day in well test operations successfully conducted in 2016.

 
Carnarvon Petroleum             20% 

Quadrant Energy (Operator)      80% 

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About Carnarvon Petroleum Limited:

Carnarvon Petroleum Limited is an oil and gas exploration company, listed on the Australian stock exchange (ASX:CVN), Frankfurt (FRA:CJB) and US OTC (OTCMKTS:CVONF). Carnarvon has an extensive acreage position in the North West Shelf of Western Australia that is designed to offer investors high alpha leverage to the energy sector. The company's near term focus is on maturing oil, gas and condensate discovered in its Phoenix project, with partner Quadrant Energy, and on bringing into production oil from the Buffalo field.

Source:

Carnarvon Petroleum Limited

Contact:

Mr Thomson Naude
Company Secretary
Phone: +61-8-9321-2665
Email: investor.relations@cvn.com.au