- Carnarvon Petroleum’s (CVN) farm-out of its Buffalo Project to Advance Energy is now closer to being completed
- Advance Energy has successfully raised enough capital to acquire a 50 per cent interest in the project
- In return, Advance Energy will fund drilling of the Buffalo-10 well on a free carried basis up to roughly A$26.3 million
- The transaction, which has gained approval from Timor-Leste’s Government, is expected to complete in mid-April 2021
- Carnarvon Petroleum is up 3.85 per cent and trading at 27 cents per share
Carnarvon Petroleum’s (CVN) farm-out of its Buffalo Project to Advance Energy is now closer to being completed.
Subject to shareholder approval, Advance Energy has successfully raised enough capital to acquire a 50 per cent interest in the project. In return for the interest, Advance Energy will fund drilling of the Buffalo-10 well on a free carried basis, up to US$20 million (roughly $26.3 million).
As a result, drilling of the Buffalo-10 well will not cost Carnarvon anything, as long as the cost does not exceed the $26.3 million.
Carnarvon has continued making progress towards drilling the well this year and is currently in the midst of processes for tendering and procurement. In particular, the company’s progress has included negotiations to secure a drilling rig.
The transaction for the farm-out of the Buffalo Project to Advance Energy has been approved by the Government of Timor-Leste. The companies expect that the transaction will be complete after Advance Energy receives approval from its shareholders, which is scheduled for some time in mid-April 2021.
Carnarvon Petroleum’s Managing Director and CEO, Adrian Cook, congratulated Advance Energy on its capital raise and welcomed the company to the Buffalo Project.
“The project team is well advanced in their work to drill the Buffalo-10 well in 2021. The well is suspended so that it can be used for future production,” he said.
“Development plans will also be progressed this year so that it provides us with the opportunity to execute the planned operations to first oil in a short period of time. The Buffalo project is progressing well and looks to be positioned for a window in time where there are now forecasts of shortages of quality oil from projects like Buffalo,” he added.
Carnarvon Petroleum is up 3.85 per cent, trading at 27 cents per share at 10:59 am AEDT.