THE MARKET has reacted with scepticism to a lack of details confirming the true size of a potentially massive oilfield discovered on the north west shelf in August.
Apache Energy and Carnarvon Petroleum’s Phoenix South 1 well discovery was touted as potentially the biggest in 30 years when it was discovered earlier this year and technical evaluation of the site has since been ongoing.
Carnarvon reported “exceptionally good quality” oil at the field on 11 December, but did not release details of the confirmed size of the field.
The company said operator Apache had provided it with a detailed update on the field, but said a lack of data meant preliminary outcomes would not be released.
“Because this is such a unique discovery in terms of the type of oil discovered and the nature of the reservoir rocks, together with key data not yet being available from the laboratories, the data set is incomplete and it is not possible for Carnarvon to provide specific information about the size of the discovery at this time,” Carnarvon said in a statement.
Shareholders reacted sceptically to the lack of confirmation of the field’s potential size, with Carnarvon’s share price falling more than 30 per cent on 11 December when the announcement was made.
Falling from $0.175 to $0.12 with news of the announcement, the share price had recovered slightly to $0.14 on 6 January.
The company said that a lack of complete information, analysis and evaluation meant it was unwilling to potentially mislead stakeholders.
Chief executive Adrian Cook said the discovery had caused joint venture partners to “re-evaluate everything it previously assumed about the basin”, saying the exceptional circumstances added time and complexity to the work schedule.
“Further there are no obvious analogous oil plays to provide guidance on how to evaluate this basin,” Mr Cook said.
He said Apache needed more time to receive, consider and integrate data before details of oil-in-place estimates and recoverability factors could be provided.
“I can confirm that the oil sampled from the Phoenix South-1 well is exceptionally good quality light black oil (not condensate) with a high API gravity around 470 and highly favourable mobilities,” Mr Cook said.
He said he expected a more comprehensive update would be provided at the end of the first quarter of 2015.
“I expect we will be in a better position to provide a more comprehensive update sometime toward the end of the first quarter of 2015.”
Mr Cook said another prospective and commercially attractive well identified on the Phoenix block, the Roc well, was expected to be drilled in mid-2015.