Carnarvon jumps after staggering oil find

Shares in Carnarvon Petroleum were up 57 per cent today after the company revealed its joint venture partner, Quadrant Energy, had made an oil discovery described as staggering.

Carnarvon announced the Dorado-1 discovery in the Bedout sub-basin, part of the broader Carnarvon Basin, to the ASX today.

It comes four years after the West Perth-based business hit oil at the Phoenix South-1 well, also in the Carnarvon Basin, which it then called the most significant offshore oil discovery in Australia in three decades.

Carnarvon holds 20 per cent of Dorado, while Quadrant Energy, the operator, holds 80 per cent.

Speaking at a Petroleum Club industry dinner last night, Quadrant group executive subsurface Fred Wehr said the company was in the middle of a two-well drilling program, with work at the Phoenix South 3 well under way this week.

Mr Wehr said he expected it to be a game changer for Quadrant.

“This (Dorado) is an historic oil discovery on the North West Shelf,” he said.

“We see this as going to be a big deal.

“I hope I'm not overstating this or overselling it but this is something I've never seen in a 35-year career.

“It’s just staggering what we’ve got here.”

Mr Wehr said the discovery would be enormously material.

“The low case is solidly commercial, the mid case is awesome and the upside is staggering,” he said.

Mr Wehr said there had been very little exploration in the sub-basin since the 1980s, but it had been a difficult journey in the past four years after the oil price collapsed.

For example, previous partners Finder Exploration, a private West Perth-based business, and Japanese company JX Nippon, had both left the project, with Quadrant consequently upping its stake.

Quadrant had been considered for an initial public offering earlier this year, but the deal fell through.

Shares in Carnarvon were changing hands at 27.5 cents each at the close.