The funds, which were provided by specialist oil and gas finance group Gemini Oil & Gas Ltd, will enable the hydraulic fracturing of the oil wells WB-N2 and WB-N3 as well as the drilling of three development wells to exploit the oil producing F Sandstone, Carnarvon said. The fracturing operations are scheduled for completion next week.

"The development wells will be drilled in Production License I commencing early October, pending the mobilisation of the rig from elsewhere in the country," Carnarvon said. "The drilling of the development wells is planned to take 15 to 20 days with oil production from the new wells expected to come on-stream within a further ten days."

The Wichian Buri Oil Field is said to contain proven and probable reserves in excess of 23 million barrels.

In line with the increase in reserves, Carnarvon has also negotiated a reduction in the long-term royalty rate from the original 8% to 7.5%. The reduction in rate is in exchange for an increase in the initial rate from 10% to 12.5% to be applied until Gemini recoups Carnarvon's portion of its original investment of US$800,000.

"Effectively, Carnarvon has negotiated a lower overall royalty cost in exchange for Gemini receiving a shorter payback period. The amending documentation is now being finalised," the company said.