Carnarvon Energy Limited provided the following update on the Dorado development occurring within Production License WA-64-L, and Pavo pre-development studies in Exploration Permit WA-438-P. The Dorado Front End Engineering and Design (FEED) process is substantially complete and has progressed to the point of the Dorado development being close to Financial Investment Decision (FID) ready. The main outstanding matter is the finalisation the Engineering Procurement and Construction (EPC) contract for the Floating Production Storage and Offloading (FPSO) vessel. The Joint Venture has been working with the relevant contractor to ensure the contract is in an acceptable form.

This requires the cost environment to be more stable and more certainty around supply chain capacity. Because the FPSO represents more than 50% of the expected project cost, it is important that this work scope is carefully contracted and managed, especially in the current supply chain environment. The engineering work for the well-head platform ("WHP") and FPSO is essentially complete, with a robust technical design able to extract the oil and gas from the Dorado field as planned and allowing for further tie-back opportunities such as Pavo.

The initial development incorporates 10 wells being drilled into the four reservoirs (Caley, Baxter, Crespin and Milne) and the hydrocarbons being produced via a 16-slot WHP to an FPSO. The FPSO has a design capacity to process 100,000 barrels of oil per day, along with 215 million scf/day of gas injection and storage for around 1 million barrels of oil & condensate. Pre-development work has commenced for the Pavo discovery, with a Discovery Assessment report being filed with the regulator while studies are being undertaken for development of this resource.

The Pavo-1 well discovered 43 million barrels (2C, gross) of oil as a Contingent Resource - referred to as Pavo North. This highly valuable resource is intended to be tied back to the Dorado FPSO. The studies being undertaken are to ensure the current Dorado FPSO design is capable of receiving the Pavo fluids with minimal requirement for further enhancements during tie back operations.

The Pavo South structure is estimated to contain an additional resource of 55 million barrels of oil (Pmean, gross), and has the potential to generate significant further value. The Joint Venture is assessing options to drill this prospect as soon as possible. A formal process for Carnarvon to fund its share of the Dorado development is underway.

The company has received a number of proposals for traditional reserve-based, non-recourse senior debt facilities and alternative funding options including subordinated debt, offtake prepayments and royalties. The financing process will be progressed once the FPSO EPC contract and other key contracts have been substantially agreed. As part of the funding process, Carnarvon is undertaking a formal process to potentially divest a portion of its share of the Dorado project and associated exploration acreage prior to taking FID.

This process is ongoing, and the company will provide shareholders with an update if a binding agreement is reached.