Carnarvon shares rocket on major find

Oil and gas exploration company Carnarvon Petroleum's shares nearly tripled in value today after it announced a major oil discovery on the North-West Shelf, which it claims represents the largest in Australia for 30 years.

Carnarvon was up more than 190 per cent to close at 24 cents, after ending last week at 8 cents a share.

The company’s Phoenix South-1 well has encountered four oil columns, with an estimated volume of 30 million to 375 million barrels.

The project is a joint venture with US-based Apache Corporation (40 per cent), JX Nippon (20 per cent) and Finder Exploration (20 per cent), with Carnarvon holding 20 per cent.

Carnarvon has said it was too early to quantify recoverable volumes of oil, but estimated the net cost of completing the well to be $6 million.

The company reported cash holdings of $50 million.

Managing director Adrian Cook said the discovery had extraordinary potential but the implications were still being assessed.

“This is the most significant new oil play in the North West Shelf since the Enfield discovery opened up the Exmouth Basin almost 20 years ago,’’ he said.

“The implications on the rest of our acreage are still being assessed, but the potential is extraordinary.

”I’m very proud to be involved with the Carnarvon team in taking a very early position in this area with our initial partner, Finder Exploration.

“A great deal of credit for this discovery also rests with Apache Energy who is the operator of the Phoenix South-1 well.

“Despite some initial challenges and setbacks, this well has delivered a significantly better outcome than any of us could have imagined.”

Apache executive vice president international, Thomas Voytovich, said it was an exciting result.

“The oil and reservoir quality we have seen point to a commercial discovery,’’ he said.

“If these results are borne out by further appraisal drilling, Phoenix South may represent a new oil province for Australia.”

Carnarvon also announced that JX Nippon and Apache Northwest had committed to drilling the nearby Roc prospect, paying earn-in costs of up to $70 million.