Comment

More oil discovered in Carnavon Petroleum's Dorado-1 well

Following Carnavon Petroleum Ltd's announcement  regarding confirmation of more oil discoveries at Dorado-1 well, Wood Mackenzie's upstream analyst David Low said:

"A sizeable discovery is significant for Quadrant, whose private equity backers are looking to exit, and Carnarvon, which is a pure-play explorer. A standalone oil discovery is easier to monetise than gas, as it does not require LNG contracts or gas infrastructure.

"We have not seen a 50 million barrel discovery in Western Australia since 2003, and the last discovery of more than 100 million barrels was way back in 1996.

"An FPSO is the most likely development concept for Dorado. While an FPSO avoids the construction or installation of any fixed platforms, significant upfront capex funds for wells, subsea equipment, buying or leasing an FPSO etc., will need to be in place.

"The Dorado oil find is in the under-explored Bedout Basin, which is georgraphically between the large hydrocarbon accumulations in the Carnarvon and Browse Basins.

"A new exploration play, it should increase the interest in exploration for many companies and may lead to M&A opportunities, as companies pursue what could be the next big opportunity in Western Australia."