Following two recent and very important milestones (being the Bedout sub-basin asset divestment and Dorado regulatory approvals) Carnarvon as a business is very well positioned.

We now have a strong funding position for the world class Dorado asset, further de-risking of the project, and we hold sector leading growth potential, with the option for a low-cost tie-back of the discovered Pavo field and any future regional discoveries.

Added in with the Company’s blue sky exploration potential in the Bedout sub-basin, where the top 20 targets have the potential to host over 1.5 billion barrels of oil equivalent on a gross or full field basis, the stage is set to deliver growth.

I would expect with some further project clarification, especially around a target Dorado FID date, we will see the market (measured in the share price) more fully reflecting something closer to our view on value.

In February, we entered an important binding agreement to divest a partial interest across our assets in the Bedout sub-basin, including the Dorado and Pavo fields, to a wholly owned subsidiary of Taiwan’s national oil company, CPC Corporation.

The sale will see CPC hold a 10 per cent interest across WA-64-L (Dorado), WA-438-P (Pavo), WA-435-P (Phoenix South), WA-437-P (Roc) and WA-436-P.

Carnarvon will receive a total cash consideration of US$146 million from the divestment, comprising an upfront payment of US$56 million on completion of the deal – earmarked for June 2023 – and a further carry of US$90 million of Carnarvon’s forward expenditure in the Bedout permits once a Final Investment Decision (FID) is taken on the Dorado development.

Together with the Company’s strong cash position, Carnarvon’s liquidity is in excess of A$300 million.  I would note that this figure is larger than the Company’s current market value, as demonstrated in the chart below.

This liquidity level, combined with the debt carrying capacity of Dorado, puts Carnarvon in a strong position to fully fund its 10 per cent share of the world class Dorado development.

Following completion of the sale, Carnarvon will hold a 20 per cent interest in the Pavo discovery, in the WA-438-P exploration permit, which we expect to tie back to the Dorado facilities.

As I mentioned earlier, the top 20 prospects across Carnarvon’s Bedout sub-basin permits are estimated to hold more than 1.5 billion barrels of oil equivalent in gross mean prospective resources, highlighting the significant upside potential of the Company’s acreage for further oil and gas resources.

Last month also saw the Dorado Joint Venture reach a significant milestone, with the national offshore safety regulator, NOSPEMA, accepting the Dorado Offshore Project Proposal (OPP).

The accepted OPP covers approval to undertake the Dorado Phase 1 liquids development as well as the tie-back of future resources within the project area, such as Pavo and any future discoveries.

Carnarvon continues to work with Dorado operator Santos, and our new JV partner CPC, to progress Dorado towards FID, which we consider to be an important requirement for the equity markets to more fully recognise the value potential of this asset.

The Company also announced at the start of this month that Alex Doering will take over the Chief Financial Officer role from 1 June from our long-serving CFO Thomson Naude.

Alex is an experienced finance executive, qualified as a Chartered Accountant. He’s also an Associate of the Governance Institute of Australia and has a Graduate Diploma in Corporate Finance.

I also want to thank Thomson for his excellent service to Carnarvon for more than 13 years and his involvement in the divestment process of the Bedout assets, which has seen a quality partner join the joint venture while providing additional capital to fund Carnarvon’s commitments.

I’ll sign off by saying that we are in a strong position with the quality of our assets and financial strength and we’re well poised for future growth.

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