We recently provided an update to the market on the Dorado project, offshore Western Australia. We advised the project had substantially completed the Front-End Engineering and Design (“FEED”) phase, however the current inflationary cost environment and supply chain uncertainty does not support a Final Investment Decision (“FID”) in 2022.

Dorado is a large field containing an estimated 160 million barrels of liquids, which expands to over 200 million barrels when this year’s Pavo discovery is included. There is also a substantial gas resource at Dorado and the nearby Roc field.

The FEED work shows Dorado represents a very strong investment proposition based on long term oil price assumptions and it remains a priority for development by Carnarvon and its partner, Santos.

In terms of FID timing, the Joint Venture plans to maintain a strong and disciplined approach to the project and in doing so progress the regulatory approval and monitor cost trends into the new year. In the meantime, the Dorado project team at Santos will be working on assessing the effective integration of the Pavo resources into the Dorado facilities.

As outlined by the Operator on 17 August 2022, the Dorado field has the benefit of both gas and liquids resources, which are expected to be developed in a number of phases, albeit in an integrated form.

Our future exploration initiatives are expected to look for opportunities which will increase both the gas and liquids resources for development. We are working with the Operator on these and look forward to announcing more detail on our drilling plans in the coming months. But to be clear, the Dorado Phase 1 project is a strong economic resource that does not require further exploration success to support its development.

On Carnarvon’s first renewable diesel project in the Shire of Narrogin, material progress continues to be made, with roughly 75% of the base feedstock secured for a targeted 10-year period and negotiations for the balance of the feedstock are well advanced.

FEED work on the Narrogin renewable diesel project also continues to progress, with Technip Energies anticipated to deliver final documentation later this quarter.

The Narrogin facility will have initial production capacity of 18 million litres of renewable diesel per annum and is the first step towards Carnarvon’s overall goal of being involved in the development of production capacity of at least 500 million litres per year by 2030.

Beyond these activities, we continue to advance discussions with parties on the potential divestment of a portion of our interests in the Bedout basin and maintain the progress achieved to date with financiers to support the funding of our interest in the Dorado development.

In wrapping up, my very strong view is that we hold very high-quality assets in terms of the Dorado and Pavo fields together with the broader Bedout exploration opportunities. While it was very difficult to see the Dorado FID deferred, it was the right decision in the current market and gives us time to ensure the Pavo resource can be integrated into the Dorado facilities for a superior overall outcome.