PHOENIX PROJECT

Figure 1. Schematic image of the Dorado field and Dorado-1 and Dorado-2 well locations.
The Nobel Corporation’s Tom Prosser rig utilised in the Dorado drilling campaign
Figure 2. Proposed Dorado Field Development Layout.
Figure 3. Map of top Caley/TR15 with well locations and significant prospects in the Bedout Sub-basin.

Dorado Project Background

In 2009, Carnarvon and its Joint Venture partner at the time, secured considerable acreage in the Bedout Sub-basin, offshore of Western Australia, through interests in four exploration permits (WA-435-P, WA-436-P, WA-437-P and WA-438-P). The permits lie approximately 110km from the coast, offshore of Port Hedland in Western Australia.

Prior to Carnarvon securing the exploration acreage, this considerable area of the Bedout Sub-basin had been relatively underexplored in comparison to the prolific Carnarvon basin to the south-west and the Bonaparte basin to the north-east. Following the completion of a string of four wells in the 1970’s, the Phoenix-1 and Phoenix-2 wells were drilled in the early 1980’s. These Phoenix wells were initially considered to be gas discoveries and were subsequently not pursued, which was the driver for Carnarvon’s original interest in the permits three decades later.

The initial work on the permits involved an extensive geological study and the acquisition of modern 3D seismic which was a marked upgrade to the existing legacy 2D seismic. The 3D seismic acquisition confirmed two significant prospects in Phoenix South within WA-435-P and Roc in WA-437-P. As a result, interest in the permits grew and the Joint Venture farmed out interests in the project to new partners who funded the exploration drilling costs to test the Phoenix South and Roc targets.

The Phoenix South-1 well was drilled in the WA-435-P permit in 2014 discovering light oil which became the catalyst for further Bedout-Sub basin exploration. This discovery was followed by the Roc-1 well in WA-437-P in late 2015 which discovered a condensate rich gas. The Roc field was successfully appraised in 2016 with the achievement of a historic flow test during the Roc-2 well, confirming the ability of the hydrocarbons to flow from the quality Caley reservoir at depths of over 4,000 metres.

In 2018, the Dorado-1 exploration well discovered a significant light oil column and condensate rich gas in a number of additional reservoirs. The reservoir qualities exceeded pre-drill estimates and hydrocarbons were recovered across the four reservoirs in the well (being the Caley, Baxter, Crespin and Milne reservoirs) with a total hydrocarbon net pay of 132 meters.

Dorado Appraisal (WA-437-P)
(Carnarvon 20%, Santos is the Operator)

In 2019, the Joint Venture moved expediently to appraise the landmark Dorado discovery. The appraisal program commenced with the Dorado-2 well which was completed at the beginning of the financial year and confirmed the major oil and condensate rich gas resource at Dorado.

The Dorado-2 appraisal well, located around two kilometres from the Dorado-1 exploration well, intersected an oil-water contact as planned which enabled the refinement of the range of recoverable oil resource. High quality oil was extracted from the reservoir and the excellent reservoir properties encountered were comparable to those discovered in the Dorado-1 well. Significantly, the well encountered high quality and productive reservoirs in each target.

Condensate rich gas was also extracted from the Baxter reservoir with wireline logging confirming that a hydrocarbon column was encountered with no gas-water contact, as expected. Pressure data indicates that the column likely extends for several hundred meters below the depth encountered in the well. Highly condensate rich gas samples were also recovered from the Milne reservoir. Importantly the reservoirs down to the Milne level were also of high quality which will be important in development.

The Dorado-3 well, being the second and final Dorado appraisal well, was located approximately 900 meters north-west of the Dorado-1 well discovery location. With the successful appraisal in the Dorado-2 well, the Dorado-3 well was designed to enhance the Joint Venture’s confidence in the subsurface characteristics. Importantly, the key highlights of the Dorado-3 well were the highly successful flow tests in the Baxter and Caley reservoirs.

The first flow test, of the Baxter reservoir, achieved a maximum possible measured rate of approximately 48 million standard cubic feet (“MM scf”) per day of gas and 4,500 barrels (“bbls”) per day of associated condensate through a 60/64” choke. This is equivalent to approximately 15,300 barrels of oil equivalent (“boe”) per day using Carnarvon’s 4.45 Bscf per MMBoe conversion rate for the Baxter gas. The well test was conducted over an approximate 7.4 metre interval of net Baxter reservoir and importantly was achieved with only 150 psi drawdown.

The second test, of the Caley reservoir, was completed soon after and successfully confirmed that the Caley reservoir was capable of delivering oil at significant production flow rates. The oil flow rate achieved in the Caley reservoir was one of the highest from a North West Shelf appraisal well test.

The Caley reservoir was tested over an approximate 11 metre section of reservoir. The initial clean-up flow rate achieved a maximum possible measured rate of approximately 11,000 barrels per day of oil and 21 million standard cubic feet per day of associated gas through a 68/34” choke. The results were achieved with a 220 psi drawdown and, as with the Baxter test, the Caley flow rate was constrained by the capacity of the test equipment on the rig. The results indicate the very high potential for flow rates of up to 30,000 barrels per day from each future production well in the Caley reservoir.

The Dorado appraisal program was successfully completed with the well and flow test results exceeding pre-test expectations and confirming the high quality of the reservoirs in Dorado.

The Joint Venture also completed the Roc South-1 exploration well during the year. While the well did not encounter a commercial quantity of hydrocarbons, Carnarvon is confident the result does not materially impact other exploration targets in the region.

Dorado Development (WA-437-P)
(Carnarvon 20%, Santos is the Operator)

The scale and quality of the Dorado project enabled the Joint Venture to move quickly to the development planning phase. Key milestones towards this goal were reached during the year, as the project evolved through the concept select phase and then into pre-Front End Engineering Design (“pre-FEED”) workflows.

The work to date strongly supports an initial development concept which focuses on extracting the liquids (oil and condensate). The field’s gas and LPG’s can be reinjected into the reservoir and through a process of miscible flooding, will maintain reservoir pressures and importantly, improve oil displacement and recovery. The gas and LPG’s can then be considered for subsequent production in a potential second stage development.

Plans for this first stage liquids extraction were considerably advanced during the year with the preliminary field development plan encompassing a single Well-Head Platform (“WHP”) connected to a nearby Floating Production Storage and Offtake (“FPSO”) vessel via sub-sea flowlines and control lines.

The WHP is designed to be a normally unmanned installation with minimal processing facilities. It will be remotely operated from the FPSO using sub-sea control lines. Expressions of interest have been received from a significant number of companies for the construction and installation of the WHP in 90 metres of water depth, and an invitation to tender has been extended to a short list of those companies.

The WHP has the capacity to accommodate up to 16 individual wells from a single drill centre. During the initial phase of development, gas will be reinjected via some of these wells into the reservoir, as previously mentioned, to enhance oil recovery.

The FPSO is planned to be located around two kilometres from the WHP and will be connected to the seabed by a disconnectable turret mooring system. The FPSO includes the processing facilities for the oil and gas being delivered from the reservoir via the wells and WHP and allows for storage of oil and condensate as well as offloading to a separate offtake tanker.

Pre-FEED contracts were awarded to three leading FPSO vessel contractors during the year. Under the terms of the contracts, the parties will work independently to advance their FPSO designs and mature their vessel construction plans and supply terms. This competitive process will ensure the Joint Venture is able to consider the optimal technical design, cost and schedule for the provision of the FPSO. This process will also determine the contracting strategy for the FPSO.

The FPSO and WHP are connected via around two kilometres of flowlines and control umbilicals that are laid on the sea-floor, together referred to as SURF (Subsea Umbilicals, Risers and Flowlines). A local engineering contractor is undertaking the pre-FEED design work on the Dorado SURF components. This will lead to detailed field layout definition.

The work to date has been critical towards formally commencing FEED work for the project. Carnarvon is working very closely with the operator to ensure that the components required to formally commence FEED are completed in order to achieve, subject to market conditions, a Final Investment Decision (“FID”) in 2021.

Exploration – Greater Bedout Area (WA-435-P, WA-436-P, WA-437-P and WA-438-P)
(Carnarvon 20%-30%, Santos is the Operator)

The Roc-1 and Dorado-1 well discoveries have provided important information unlocked the greater Bedout sub-basin, which was historically under-explored prior to the Phoenix South-1 well drilled in 2014 by Carnarvon and its joint venture partners at the time. Over the years, the joint venture partners have changed but Carnarvon has remained as the one core constant since the beginning of the modern journey in unlocking the frontier Bedout Sub-basin.

The next step in unlocking the exploration potential of the Bedout was the Keraudren 3D seismic acquisition which completed Phase 1 during the year. The purpose of the survey was to improve on the existing 3D seismic, specifically over the Dorado development area and nearby exploration targets.

Carnarvon has already received the fast-tracked version of the Keraudren data, with the final data set to be merged with the existing Capreolus 3D Seismic. This work will be completed towards the end of this calendar year. The data quality of the Keraudren 3D seismic has been a marked improvement over the existing data and has not only enhanced the Dorado development but it has also illuminated the exciting near field exploration targets.

Most importantly, the structural integrity of the Apus and Pavo prospects have been confirmed by the Keraudren 3D seismic. In many ways, these are both similar to Dorado in that they are stratigraphic traps along the middle Triassic canyon escarpment cuts of the area.

Apus has a larger closure in area than Dorado with similar stacked reservoir objectives. Pavo is more like Dorado in scale, although on seismic there appears to be more reservoir at this prospect. Apus and Pavo also contain shallower reservoir targets compared with Dorado that would likely lower future drilling campaign costs.

In addition to Pavo and Apus, there are numerous new prospects and leads being advanced on the Keraudren 3D, some of which are within tie back distance to the Dorado field.

Carnarvon’s acreage across the Bedout Sub-Basin is of a scale which is equivalent in size to the inboard Carnarvon basin that is made up of the Dampier, Barrow and Exmouth sub basins. These basins contain a large number of successful oil and gas fields. The scale and under explored nature of the Bedout sub-basin presents an exciting exploration future and a very rare opportunity in Australia, and in fact the world, for Carnarvon to continue on this journey of uncovering a brand-new petroleum basin and to explore its most significant targets.

Carnarvon plans to continue its journey of uncovering this brand-new petroleum basin and maturing the 200 plus prospects and leads currently identified and adding to this portfolio as the sub-basin becomes more comprehensively understood.

Figure 1. Schematic image of the Dorado field and Dorado-1 and Dorado-2 well locations.
The Nobel Corporation’s Tom Prosser rig utilised in the Dorado drilling campaign
Figure 2. Proposed Dorado Field Development Layout.
Figure 3. Map of top Caley/TR15 with well locations and significant prospects in the Bedout Sub-basin.