Carnarvon Energy (ASX: $CVN) Dorado Project Update

Carnarvon Energy Limited (ASX: $CVN) has provided an update on the progress of its Dorado Phase 1 liquids development, offshore Western Australia. The Joint Venture, comprising Santos Limited (80%, Operator), Carnarvon (10%), and OPIC Australia Pty Ltd (its ultimate holding company is CPC Corporation, Taiwan) (10%), is finalizing key optimization opportunities to improve project economics and lower upfront CAPEX. The assessment includes the potential re-purposing of idle FPSOs for the project, with FEED re-entry expected later this year and FID in 2025. Carnarvon anticipates the overall CAPEX prior to first oil to be below the previous guidance of ~US$2 billion (gross).

Executive Commentary on Dorado Phase 1 liquids development

I am pleased with the progress the Dorado project has made and am excited by the re-shaping of the project, which is expected to reduce the total capital outlay by Carnarvon. While the FID timing is slightly later than previously envisaged, the Joint Venture is taking the requisite time to assess the optimization and FPSO redeployment opportunities, and to materially progress EP approvals prior to FID. These are important activities which require additional time and are expected to unlock considerable value for shareholders. Carnarvon's estimates for up-front capital expenditure savings are expected to be material to the Company. With the Company's A$176m (~US$115m) cash balance (31 March 2024), US$90m development funding cost carry and optionality for a prospective debt facility, Carnarvon expects to be fully funded for its share of development costs to first oil under the optimized project.

Summary of Dorado Phase 1 liquids development update

Carnarvon Energy Limited (ASX: $CVN) provided an update on the progress of its Dorado Phase 1 liquids development, offshore Western Australia. The Joint Venture, in collaboration with Santos Limited and OPIC Australia Pty Ltd, is making positive progress towards finalizing key optimization opportunities for the project, including the assessment of idle FPSOs for potential re-purposing. The FEED re-entry is expected later this year, with FID anticipated in 2025. The company estimates that the overall CAPEX prior to first oil will be below the previous guidance of ~US$2 billion (gross). CEO Philip Huizenga expressed optimism about the project's progress and the expected reduction in capital outlay, emphasizing the Company's strong balance sheet and funding arrangements. The assessment of optimization and FPSO redeployment opportunities, along with the progress of EP approvals, are expected to unlock considerable value for shareholders.