Carnarvon Petroleum Ltd (ASX:CVN) has secured a 100% interest in a newly awarded offshore exploration permit WA-521-P located in the Roebuck Basin.

The permit is positioned immediately adjacent to the Phoenix/Roc acreage on Western Australia’s North West Shelf (NWS).

Adding interest several structures are larger in area than the Phoenix / Roc discovery areas.

Carnarvon is the financial envy of many mid caps holding $100 million in cash no debt and minimal commitments.

The company with its partners is a leader in discovering a new hydrocarbon province on the NWS.


Adrian Cook managing director and CEO commented:

“Carnarvon continues to build its North West Shelf portfolio which now includes the Cerberus blocks (100% CVN) the Phoenix/Roc acreage (20-30% CVN) the Outtrim block (28.5% CVN) and now WA-521-P (100% CVN).

"As we continue to unlock the potential of the Lower Triassic petroleum systems along the North West Shelf Carnarvon has demonstrated its strategic focus by securing low-cost acreage in highly prospective locations that are capable of being matured ahead of a rising oil price cycle.”


Why the Lower Triassic petroleum system

For the past five years Carnarvon has been studying the potential of the Lower Triassic petroleum system.

The company believes the system lies along the entire length of the NWS.

The discovery of hydrocarbons (oil condensate and gas) at the Phoenix South-1 and Roc-1 wells in this Lower Triassic stratigraphy validates this theory and provides the justification for securing WA-521-P.

The Lower Triassic source rocks have potentially generated and trapped oil and gas into shallower overlying Jurassic sands.

Carnarvon applied to the Government for WA-521-P during the current low oil price cycle with a low-cost bid of purchasing 4000 kilometres of reprocessed 2D seismic during the first three year term and acquiring an optional 300 square kilometre 3D seismic survey in year 5 of the following discretionary three year term.

Keys:

- The potential for the proven Lower Triassic petroleum systems and source rocks from the Phoenix and Roc area to extend into WA-521-P;
- Lower Triassic generated hydrocarbons can directly charge into the overlying Jurassic Sands;
- Jurassic sands are sealed by regionally extensive Cretaceous shales; and
- Numerous structural closures and initial seismic mapping indicates the structures to be larger in area than the Phoenix South and Roc discovery closure areas.


Analysis

Today Carnarvon has further demonstrated its strategic focus on the NWS in Western Australia taking the opportunity to increase its portfolio at a time of oil price weakness therefore further leveraging itself to a recover in the commodity.

Carnarvon already has two discoveries in first two NWS exploration wells with another two wells planned for CY2016.

Carnarvon is the financial envy of many mid caps holding $100 million in cash no debt and minimal commitments.

And with a market cap of circa $80 million Carnarvon is trading well under cash backing.

Adding further to the financial opportunity is up to a $45 million receivable from future oil sales.

The cost carry on Roc-2 well net to Carnarvon is $8 million.

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