CHAIRMAN’S REVIEW

Peter Leonhardt

It gives me great pleasure to introduce the 2020 financial report for Carnarvon Petroleum Limited (“Carnarvon” or “Company”), my last as Chairman. I am extremely pleased that this year is a landmark year for the Company as it begins its transformation from junior explorer to producer.

Successful appraisal and subsequent flow tests have confirmed the significant Dorado resources and work to date has confirmed the high-quality nature of the project. Dorado is one of the most exciting new oil developments within the industry and with follow-up exploration prospects near Dorado being equally impressive, your Company is in an excellent position.

The appraisal results justified an intense work program towards the Front End Engineering and Design workflows for Dorado, which are expected to commence shortly. The field development concepts are well advanced, the project is rapidly taking shape and I look forward to reaching key milestones on the path to the Final Investment Decision. Fortunately, the robust economics emerging from this work have enabled the work plan to progress substantially as envisaged, notwithstanding the impact of the current uncertainties in energy markets.

I would like the thank our Joint Venture operator, Santos, for their efforts in ensuring the Dorado appraisal was completed safely and successfully and the rapid progress of the development. The quality of Dorado’s operator is a key strength of the project and I know that our team very much appreciates the opportunity to work with them.

Following the ratification of the Maritime Boundary Treaty, in August 2019, between the governments of Australia and Timor-Leste, the Buffalo project will now continue under Timor-Leste’s jurisdiction. The signing of a Production Sharing Contract between Carnarvon and the Timor-Leste regulator provides security and clarity for the Buffalo redevelopment. Our work to date with the Government has been very positive and I look forward to Carnarvon working closely with the people of Timor-Leste as we progress the project. Technical work on the project has been actively advanced while at the same time discussions with prospective farm-in partners continue.

As we expand our operations from successful explorer to include a partnership in a significant and exciting production project, it is important that we nurture the values that have guided our progress. Carnarvon is committed to providing appropriate returns to our shareholders while protecting the health and safety of our employees, safeguarding the environment and working positively with our partners and the communities we work in. As part of this process, Carnarvon has released its inaugural sustainability report which highlights the work we are currently undertaking in this area and our future planning as we progress towards production.

On behalf of the Board I would like to thank the Carnarvon team led by our Managing Director, Adrian Cook, for their outstanding work over the last 12 months to ensure that the Company’s future remains bright. Maintaining the Company’s strong financial position was of utmost importance at this time. This was achieved notwithstanding the disruptions resulting from COVID-19 and turmoil in global energy markets. The team’s dedication and resilience to the challenges are much appreciated.

Adrian has been at the helm for almost 10 years of my time as Chairman and it has been a great pleasure working with him. I have also been fortunate to observe at close hand his achievements in building Carnarvon’s reputation and his personal development into a highly regarded industry leader. Thank you, Adrian.

My decision to retire as Chairman of the Company at this year’s Annual General Meeting was announced earlier in the year. I am confident that Carnarvon is well positioned for the development phase of Dorado and it is an opportune time to pass on the baton. We have been planning Board succession for some time now, and I can assure shareholders that Bill Foster, who is currently the Company’s Lead Independent Director, is superbly qualified to lead our future growth particularly bringing the Dorado project to fruition.

I would like to thank all of my fellow directors who bring an excellent balance of experience and skills to the Company. Carnarvon is in very good hands as it moves towards its transformation into a significant producer and explorer. Most importantly, I want to thank our shareholders for their continued support and involvement with the Company. I know we have a very loyal shareholder base and many of you have been with our team over many years on what has been an exciting journey. It has been an honour and a privilege to have led Carnarvon as its Chairman since 2005 and it brings me immense pride to reflect on Carnarvon’s achievements over this time. I very much look forward to closely following the next chapter to Dorado’s first oil as a fellow shareholder.

Peter Leonhardt
Chairman
Peter Leonhardt