Dorado Delay Tests Carnarvon’s Patience as 2027 Drilling Looms
Carnarvon Energy advances its Bedout Sub-basin exploration with a major drilling campaign planned for early 2027, while maintaining a robust financial position and strategic investment in Strike Energy.
- Bedout Sub-basin drilling planned for H1 2027 targeting large new prospects
- Strong balance sheet with $98 million cash and no debt
- 19.9% strategic equity stake in Strike Energy secured
- Enhanced seismic data improves resource prospectivity across permits
- Dorado project development deferred pending further appraisal
Exploration Momentum Builds in Bedout
Carnarvon Energy Limited (ASX, CVN) has outlined a clear path forward for its Bedout Sub-basin assets, signalling a return to exploration drilling in the first half of 2027. The company is progressing procurement of long-lead items and advancing environmental approvals, setting the stage for a campaign focused on the northern play fairway. This area holds significant promise beyond the 450 million barrels of oil equivalent (boe) already discovered, with seismic data revealing new structural and stratigraphic features that could unlock substantial additional resources.
Financial Strength Supports Growth Strategy
With a cash balance of approximately A$98 million and zero debt, Carnarvon maintains a strong financial footing. This liquidity is complemented by a US$90 million development carry for the Dorado project, providing capital efficiency as the company advances its portfolio. Administrative and corporate costs remain lean, largely offset by interest income on cash holdings, reflecting disciplined financial management amid ongoing exploration and development activities.
Strategic Investment in Strike Energy
In a move to diversify and gain exposure to near-term gas production, Carnarvon completed a strategic investment in Strike Energy Limited, acquiring a 19.9% equity stake for A$86 million. This positions Carnarvon to benefit from Strike’s projects in the Perth Basin, including the South Erregulla gas-fired peaking plant targeted for commissioning in 2026. The investment complements Carnarvon’s oil-focused portfolio and provides a foothold in Western Australia’s domestic gas and electricity markets without compromising its financial capacity to develop Bedout assets.
Dorado Project Development on Hold
The Dorado oil and gas field, one of Australia’s largest undeveloped discoveries, remains a key asset for Carnarvon. However, the operator Santos has deferred progress on the project to allow further appraisal of the broader Bedout exploration potential before making a Final Investment Decision (FID). Carnarvon estimates Dorado and surrounding fields contain 249 million barrels of light oil and condensate and 1.1 trillion cubic feet of gas (2C resources), with upside potential of 1.6 billion barrels of liquids and 9 trillion cubic feet of gas in prospective resources. The company continues to collaborate with Santos on innovative development solutions aimed at accelerating the timeline and capital efficiency.
Looking Ahead
As Carnarvon prepares for its next drilling campaign and navigates the evolving energy landscape, its strategy balances exploration upside with financial prudence. The company’s strengthened seismic dataset and strategic partnership with Strike Energy position it well to unlock value across multiple fronts. Investors will be watching closely for updates on the 2027 drilling program and progress toward the Dorado FID, which will be pivotal in defining Carnarvon’s growth trajectory.
Bottom Line?
Carnarvon’s 2027 drilling plans and Strike investment set the stage for a pivotal year in unlocking Bedout’s potential.
Questions in the middle?
- What specific targets will the 2027 Bedout drilling campaign prioritize beyond current discoveries?
- How will the Dorado project’s deferred development impact Carnarvon’s near-term production timeline?
- What synergies and risks arise from Carnarvon’s significant stake in Strike Energy?
