• Carnarvon is progressing with its plans to drill the Buffalo-10 well, targeting 2H 2021.
• Petrofac appointed as drilling management services contractor
• Advance Energy farm-out completion on track for March 2021
• Approvals and procurement process underway 

Map source: Carnarvon Petroleum

Carnarvon Petroleum has today provided an update on the Buffalo project.

Carnarvon has awarded the drilling management services to Petrofac, which in the short term will include completion of detailed well design, procurement of long lead items and contracting the drilling rig and associated services, including the shore base location. The appointment followed a highly competitive evaluation process.

The objective is to drill the Buffalo-10 well in the second half of 2021. The well is targeting the crest of the proven Buffalo oil field and will be suspended as a future production well. Further details and updates on timing will be provided once Petrofac and Carnarvon have secured a drilling rig and long lead items.

On the 17 December 2020, Carnarvon announced a binding agreement with Advance where they will acquire up to a 50% interest in the Buffalo project by funding the drilling of the Buffalo-10 well up to US$20m on a free carry basis. In addition to this, the newly formed joint venture will acquire development funding from third party lenders and any additional funding requirements (in addition to that provided by third party lenders) will be provided by Advance as an interest free loan.

Carnarvon and Advance have made material progress in satisfying the conditions in relation to the farm-out and look forward to completing the transaction at the end of this quarter. 

Carnarvon Managing Director and CEO, Mr Adrian Cook, said:
“I am pleased to see substantial progress on the Buffalo project since announcing the farm-out to Advance Energy in December 2020.

Petrofac is an established and highly experienced global energy services provider and is well suited to ensure the success in the Buffalo project. They have already made encouraging progress in assessing our well plans, reviewing drilling rig alternatives and assessing the necessary long lead items for drilling. 

The Buffalo redevelopment opportunity is well placed for success given its known production capability and low development cost and will be greatly enhanced as oil prices continue their recovery.

We look forward to an exciting year with drilling at the Buffalo Project as well as our Dorado FEED activities and the Apus-1 and Pavo-1 exploration drilling campaign”.

Buffalo Redevelopment Project

Carnarvon was awarded the WA-523-P permit, which included the previously developed Buffalo field, in May 2016 for an initial six-year term. The Field was discovered by BHP in 1996 and subsequently developed using four wells drilled from a small, unmanned wellhead platform installed in 25 metres water depth, tied back to an FPSO. Production commenced in December 1999 at production rates up to approximately 50,000 stb/d and terminated in November 2004 after the production of 20.5 MMstb of highly-undersaturated, light oil (53°API) from the Jurassic-age Elang Formation. All existing facilities and wells were decommissioned and removed prior to Carnarvon being awarded the permit.

Carnarvon initially focussed its technical work on reprocessing of the 3D seismic dataset using state-of-the-art full waveform inversion (FWI) technology. This work supports 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. Reservoir modelling has been conducted using the latest structural interpretation and available well data, including an extensive history-matching effort to calibrate model/well performance to production rates and water-cut development (governed by strong aquifer drive) observed during the original production period.

Based on this work, independently audited volumetric estimates of contingent resources in the Buffalo oil field are 31.1 million barrels (2C) with low estimates of 15.3 million barrels (1C) and high estimates of 47.8 million barrels (3C) - Refer to Carnarvon Petroleum’s ASX announcement on 28 August 2017.

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