• Commencement of the Buffalo-10 well is on schedule to spud in early November
• Mid case recoverable volume estimate is 31 million barrels (gross, 2C contingent resource)
• Strong likelihood Buffalo-10 will confirm a sanctionable development project based on the minimum economic field size
• Buffalo-10 to be retained in the success case as first production well in development program
• Planning work is in progress to compress the time to first production

Carnarvon Petroleum provides the following update on the Buffalo project.

The Buffalo project involves the redevelopment of the Buffalo oil field in the Timor Sea. The field resides in only 30 metres of water with a reservoir depth between 3,200 and 3,300 meters below the sea bed.

The previous field proved the existence of very high deliverability reservoir containing high quality light oil that is expected to sell at a premium to Brent in today’s market.

Carnarvon, as the operator of the project, is preparing to drill a well that will penetrate the existing oil column remaining (because the field was still producing when it was shut-in in 2004), and assess the extent of the revised mapped attic oil column.

Carnarvon’s mid case recoverable volume estimate is 31 million barrels (gross, 2C contingent resource). With the minimum economic field size estimated to be significantly lower than the mid case estimate, there is a strong likelihood the Buffalo-10 well will confirm an economic project. Accordingly, Carnarvon’s drilling plans provide for the Buffalo-10 well to be retained as the first production well in the redevelopment program.

For the above reasons, Carnarvon is also working with its project partner, Advance Energy Plc, on plans to compress the timeline to first production once the Buffalo-10 well confirms the expected recoverable oil resource. These plans include engaging with industry for supply and installation of suitable equipment to produce the oil.

As announced on 1 September 2021, the VALARIS JU-107 drilling rig has been contracted to drill the Buffalo10 well. The rig will move to the Buffalo drilling site once it has completed its current operations which are around 300 kilometres from the Buffalo location. Timing wise, the rig is expected to commence Buffalo drilling operations in early November, namely in around 6 weeks’ time. A site survey of the anticipated surface location has been undertaken, with confirmation that the location is suitable for the jack-up drilling rig.

Aside from the drilling rig, a number of ancillary contracts have now been signed with support vessels, helicopters, drilling service providers and shore base and logistics providers. Equipment is being mobilised in preparation for drilling to commence within a few weeks.

While the majority of support services for the drilling have been confirmed, the final well timing will be subject to the release of the rig from the previous operator, and securing the last remaining services and equipment, and receiving the necessary joint venture and regulatory approvals.

Carnarvon Managing Director and CEO, Mr Adrian Cook, said:
“Our preparations for drilling the Buffalo-10 well are in good shape and we’re looking forward to commencing drilling relatively soon.

We continue to work well with and enjoy the support of our joint venture partner, Advance Energy Plc, who have contributed US$20 million towards the cost of the Buffalo-10 well and now hold a 50% interest in the project.

Once drilling commences, we expect to reach the target in around 35 days and, given our modelled economics, this well has the potential to be value transforming for Carnarvon.”