Carnarvon Energy Limited ('Carnarvon') (ASX: CVN) has completed its Pavo resource assessment and is pleased to report on the contingent and prospective resources.

The successful Pavo-1 oil discovery significantly increases Carnarvon's oil resources for potential development through the Dorado facilities, located around 46 kilometres from Pavo.

The greater Pavo closure comprises a northern structure, from which the Pavo-1 well recovered hydrocarbons (Pavo North contingent resource), and a southern structure (Pavo South prospective resource). The two structures are separated by a narrow syncline, with the depth of the syncline being shallower than an interpreted residual oil-water contact noted in Pavo-1. This supports the position that Pavo South is likely filled with the same oil encountered in Pavo North.

Carnarvon Managing Director and CEO, Mr Adrian Cook, said: 'As we reported a little over a month ago, the Pavo-1 well result is another stellar exploration success in Carnarvon's history in the Bedout Sub-basin. I'm now pleased to be in a position to report on the contingent and prospective resources within the Pavo structure. When we consider Carnarvon's share of the Dorado field oil resource is 32 million barrels (2C), the addition of 13 million barrels (2C) in Pavo North and 16 million barrels (prospective Pmean) in Pavo South holds great significance to the company and its shareholders. Importantly, Pavo has the potential to maintain high flow rates through the Dorado production facilities and thereby preserve the field's low operating costs per barrel for an extended period of time. The success of the Pavo-1 well has also led the joint venture to consider its upcoming appraisal and exploration campaigns in the Bedout Sub-basin. Carnarvon is working closely with the operator, Santos, to define these targets and will provide more information to shareholders in due course.' ASX disclosure: Prospective resources are the estimated quantities of petroleum that may potentially be recovered by the application of a future development project and may relate to undiscovered accumulations. These prospective resource estimates have an associated risk of discovery and risk of development. Further exploration and appraisal will be required to determine the existence of a significant quantity of potentially moveable hydrocarbons.

Contact:

Thomson Naude

Tel: (08) 9321 2665

Email: investor.relations@cvn.com.au

Potential development

The Pavo structure is located around 46 kilometres east of the proposed location of the Dorado production facilities. The Dorado production facilities will consist of a wellhead platform connected to a Floating Production, Storage and Offloading ('FPSO') vessel located approximately 2 kilometres from each other. The design for the facilities allows for flexibility to bring in hydrocarbon fluids (liquids and/or gas) from other fields for processing and storage, with provision for a future phase of gas production and export. During initial oil production of the Dorado field (Phase 1), gas will be re-injected to enhance the oil recovery. This will result in very high initial rates of oil production, with the facilities being designed to handle rates of up to 100,000 barrels of oil per day. Fluid production rates from Dorado are expected to naturally decline after a plateau period of 1-2 years, at which time there will be spare capacity in the crude oil handling facilities, allowing for back-fill from new fields such as Pavo. The Pavo field lies within industry standard ranges for tie-back distance and could be delivered to the Dorado facilities at a time and rate that enables very efficient utilisation of the Dorado facility and extends the period of time the Dorado project can produce at capacity

Resource information

Carnarvon calculates reserves and resources according to the Society of Petroleum Engineers Petroleum Resource Management System ('SPE-PRMS') definition of petroleum resources. Carnarvon reports reserves and resources in line with the ASX Listing Rules. There are numerous uncertainties inherent in estimating reserves and resources, and in projecting future production, development expenditures, operating expenses and cash flows. Oil and gas reserve engineering and resource assessment must be recognised as a subjective process of estimating subsurface accumulations of oil and gas that cannot be measured in an exact way. 'Gross Contingent Resources' are 100% of the volumes estimated to be recoverable from the discovery without any economic cut-off being applied. Volumes reported are 'unrisked' in the sense that no adjustment has been made for the risk that the project may not be developed in the form envisaged or may not go ahead at all (i.e. no 'Chance of Development' factor has been applied). The Chance of Development for the Contingent Resources shown here has been estimated to be 75%. This is based on further appraisal, development being at concept assess phase and distance to infrastructure. Contingent Resources have been sub-classified as 'Development Unclarified' under the SPE-PRMS. Unless otherwise stated, all petroleum resource estimates are quoted at standard oilfield conditions of 14.696 psi (101.325 kPa) and 60 degrees Fahrenheit (15.56 deg Celsius).

Forward-looking statements

This announcement contains certain 'forward-looking statements', which can generally be identified by the use of words such as 'will', 'may', 'could', 'likely', 'ongoing', 'anticipate', 'estimate', 'expect', 'project', 'intend', 'plan', 'believe', 'target', 'forecast', 'goal', 'objective', 'aim', 'seek' and other words and terms of similar meaning. Carnarvon cannot guarantee that any forward-looking statement will be realised. Achievement of anticipated results is subject to risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. You should bear this in mind as you consider forward-looking statements, and you are cautioned not to put undue reliance on any forward-looking statement.

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