The well will be a critical test to hopefully answer many of the unresolved questions left by the Phoenix South-2 well that discovered gas and condensate at the top of the Caley interval but could not be properly tested.

 

Quadrant, which is reportedly looking at an initial public offer later this year, is designing the well to account for the high pressures seen in the PS-2 well, and to allow full evaluation of the Caley Formation where there is an estimated prospective resource of 143 million barrels of oil equivalent or 489 billion cubic feet of gas and 57 million barrels of condensate deeper than the Barret Sandstone discovery in PS-1.

 

Carnarvon expects its costs in the PS-3 well may be covered by insurance claims for the successful control of the increased pressure encountered in the earlier well.

 

The claims are in the final stages of assessment by the insurance underwriters.

 

Quadrant is in the market evaluating tenders for a semi-submersible drilling rig. 

 

Carnarvon, which has been keen to drill the Dorado target, which sits adjacent to the Roc discovery, said the decision to drill two wells would allow the partners to take advantage of drilling program synergies, which should provide additional synergies in what remains a depressed drilling market.

 

Quadrant had been looking for a jack-up rig, but limited options for a well slot this year meant pushing the well into next year made both economic sense, and would help avoid cyclone season.

 

Carnarvon said Quadrant was still looking for a suitable jack-up for Dorado-1, with the plan for a mid-2018 spud. 

 

Dorado-1 will also target multiple stacked reservoirs within the Caley Sands, where the top zone alone is estimated to contain a gross mean recoverable prospective resource of 545Bcf and 31MMbbl.

 

Carnarvon managing director Adrian Cook also confirmed that the partners had started pre-front-end engineering and design work aimed at determining the most robust concept for developing the discovered hydrocarbons in the Phoenix project area. 

 

The work includes detailed reservoir modelling at Roc in order to determine the ideal development, with a focus on the northern extend on the structure, which should allow greater certainty on the gas and condensate resource and ultimately support the reclassification of volumes into the more robust proved category for making a final investment decision.

 

All of the development scenarios being progressed include options for the tie-back of future discoveries and appraisal resources, and can fold in Dorado and Phoenix South if required. 

 

Carnarvon shares were at 8.2c this morning.