Carnarvon Energy has expanded its Bedout prospective resource inventory by 92% and secured a rig for a 2027 exploration campaign, but Dorado remains stalled before FEED and FID. The company ended FY26 with A$97.7 million in cash, no debt and a A$4.2 million after-tax loss.
- Bedout prospective resources increased 92% to 6,256 million boe gross, unrisked Pmean
- Transocean Equinox contracted for one firm and one contingent well in 2027
- Ara-1 is the likely firm well, subject to environmental approval
- Dorado development remains deferred pending FEED and FID
- A$86 million Strike investment leaves Carnarvon with 19.9% ownership and A$97.7 million cash
Carnarvon Energy Limited (ASX:CVN) has spent another year waiting for Dorado, but its exploration portfolio is now materially larger. The company’s Bedout Sub-basin prospective resource inventory rose 92% to 6,256 million barrels of oil equivalent across 130 prospects after the completion and interpretation of its Mega-Merge 3D seismic dataset.
2027 drilling campaign takes shape
The next test of that subsurface optimism is scheduled for the first half of 2027, subject to environmental plan approval. Carnarvon has contracted the Transocean Equinox semi-submersible rig for one firm well and one contingent well in its permits, with the campaign expected to cost about A$20 million if both wells are drilled.
Ara is the likely firm target. The prospect sits about 80 kilometres north of Dorado and carries an estimated 191 million boe of gross, unrisked Pmean prospective resources, with a 37% geological chance of success. The proposed Ara-1 well would test two separate play systems, including an Archer Formation trap comparable to the reservoir developed at Dorado. Yuma, Hutton, Goats Eye and Pavo South remain on the shortlist for the contingent well.
Dorado still waits for a final investment decision
The resource growth does not change the more immediate uncertainty around Dorado. The field is estimated to contain 162 million barrels of gross 2C liquid hydrocarbons, with nearby Pavo holding a further 43 million barrels of gross 2C oil. Yet Carnarvon said finalisation of Dorado plans had again taken longer than expected, following the deferral of FEED and FID in early 2025.
The proposed Phase 1 concept remains a 60,000-barrel-a-day development using a fixed wellhead platform linked to a floating production, storage and offloading vessel. Carnarvon says development activities are expected to recommence alongside further exploration evaluation, but the project has not reached FID and the company reports no reserves. Those distinctions matter: the headline resource numbers remain contingent or prospective, rather than booked production.
Strike investment changes the capital picture
Carnarvon deployed A$85.95 million, including transaction costs, into Strike Energy (ASX:STX) during FY26, securing a 19.9% stake and a board seat for William Barker. The investment is intended to provide exposure to Western Australia’s domestic gas and electricity markets while leaving Carnarvon’s Bedout interests intact.
That allocation reshaped the balance sheet. Cash and cash equivalents fell to A$97.678 million from A$186.144 million a year earlier, although Carnarvon remained debt-free and retained a US$90 million capital expenditure carry for Dorado. The Strike investment was carried at A$81.842 million at year-end, compared with a market value of A$71.628 million, after Carnarvon recognised its A$5.040 million share of Strike’s loss for the period.
Loss highlights the cost of waiting
Carnarvon reported a A$4.234 million after-tax loss for FY26, reversing a A$3.649 million profit in FY25. Interest income still covered corporate and administrative costs, generating A$4.447 million against A$1.318 million of administrative expenses, but the share of Strike’s loss and lower interest income weighed on the result.
The company says it can fund the proposed 2027 exploration campaign from its existing cash balance. The more consequential funding question lies beyond that campaign: how long the remaining cash, Dorado carry and Strike exposure can support a company with no operating production while the flagship development continues to wait for FEED and FID.
Bottom Line?
Carnarvon now has a clearer exploration catalyst in 2027, but the investment case still turns on converting large prospective resources into discoveries and moving Dorado from deferred planning to FID.
Questions in the middle?
- Will environmental approval arrive in time for the Transocean Equinox campaign to begin in the first half of 2027?
- Will Ara-1 become the firm well, and which prospect will ultimately be selected as the contingent target?
- When will Santos and the Dorado joint venture provide a firm FEED and FID timetable, and what funding will Carnarvon require beyond its existing carry?