BUFFALO PROJECT

Figure 4. Map of WA-523-P permit and the Buffalo PSC.
Exchange of Gifts at the Buffalo PSC Signing Ceremony.

Buffalo Project Background
(Carnarvon 100% and Operator)

Carnarvon was awarded the WA-523-P permit within the Bonaparte Basin of Australia in May 2016, which included the previously developed Buffalo oil field.

The initial technical work was focused on reprocessing the 3D seismic data using a number of new technologies, including Full Waveform Inversion (FWI) technology. The FWI reprocessing considerably improved the data quality, allowing clearer analysis of key intervals in and around the Buffalo oil field. The subsequent technical work supported 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.

In March 2018, the Australian and Timor-Leste Governments signed a Maritime Boundary Treaty (“Treaty”) in order to redefine the maritime boundary between the two countries. The Buffalo project was to be affected by the boundary change, resulting in the Buffalo oil field redevelopment being undertaken within Timor-Leste’s jurisdiction. A portion of WA-523-P, however, was to remain within Australia’s jurisdiction, which contains undrilled exploration prospects.

Following the signing of the Treaty, Carnarvon commenced extensive negotiations to secure a Production Sharing Contract (“PSC”) with the governments of Timor-Leste and Australia, and in consultation with the respective government regulators, Autoridade Nacional do Petróleo e Minerais (“ANPM”) and Noational Offshore Petroleum Titles Administrator (“NOPTA”).

The Treaty between Australia and Timor-Leste was ratified in August 2019 which finalised the maritime boundary change. Immediately following the ratification, Carnarvon signed a PSC confirming ongoing title to the Buffalo oil field and the surrounding exploration acreage.

One of the key conditions of the Treaty was that the affected parties, such as Carnarvon, would be granted security of title with conditions equivalent to those previously in place under Australian domestic law. Importantly, Carnarvon’s PSC achieves a similar net back after government taxes and duties to Carnarvon, when compared to Australia’s offshore PRRT regime.

Carnarvon also received formal recognition for previous work undertaken whilst WA-523-P was under the Australian regulatory regime. In particular, the approval of the Environmental Plan to drill three wells into the Buffalo field by NOPSEMA was accepted by Timor-Leste authorities and will continue to be utilised in the project.

Buffalo Project (TL-SO-T 19-14 PSC)
(Carnarvon 100% and Operator)

Following the finalisation of the maritime boundary change, Carnarvon expeditiously established its operations in Timor-Leste. This included the establishment of an office and the employment of staff in Dili, the capital of Timor-Leste. Carnarvon has continued to advance its operational readiness to ensure it, or an incoming operating partner, has the appropriate systems required for the development, drilling and production of the Buffalo oil field. The continuation of these workflows will ensure that the Buffalo project is poised to recommence once a suitable partner has been introduced to the project.

Carnarvon has also undertaken additional technical work to refine the follow up potential to the Buffalo oil field. The technical work includes geochemical studies to assess the Triassic prospectivity and source rock potential within the project in light of the compelling evidence for these working Triassic petroleum systems across the North West Shelf of Australia and within the Timor Sea.

In particular, Carnarvon has identified the Buffalo Deep prospect, which lies below the Buffalo oil field. A comprehensive geochemistry study aims to provide identification of a working Triassic petroleum system and to de-risk the charge concepts for the Triassic targets, including Buffalo Deep.

Carnarvon continued its process to introduce a partner to the Buffalo project. Acquiring a suitable partner will assist with financing the project which will be vital as Carnarvon works towards bringing both the Dorado and Buffalo fields into production.

Figure 4. Map of WA-523-P permit and the Buffalo PSC.
Exchange of Gifts at the Buffalo PSC Signing Ceremony.