Why Carnarvon Petroleum Ltd Jumped Higher Today

At the time of writing, shares of Carnarvon Petroleum Ltd [ASX:CVN] are up by 24.74%, to 60.5 cents per share. Carnarvon Resources is an oil and gas explorer, with offshore leases across Western Australia.

Why did Carnarvon Petroleum Ltd shares do this?

The company announced that it hit another 40 metres of net oil pay in the Crespin and Milne Members of its Dorado-1 well.

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What now for Carnarvon Petroleum Ltd?

Carnarvon’s Managing Director, Adrian Cook said the latest results make the Dorado result all the more impressive:

The oil discovered in the Caley Member is very significant in terms of its likely scale and in proving that this play works in the basin. Discovering more oil in the Crespin and Milne Members makes this a truly incredible find, for Dorado and for similar structures nearby that have been identified in Carnarvon and Quadrant’s prospect list.

Traders and investors agreed with Cook, sending the share price higher. The market capitalisation stands at close to $720 million at 60.5 cents.

The discovery could be a massive boost for the struggling oil and gas sector ― especially at the junior end of the market. In the future, with drilling and evaluation of the Dorado-1 completed, Carnarvon’s assessment of the hydrocarbon volumes is underway.

The bottom line: I like where the company is going. But the story now comes down to the hydrocarbon volumes ― how big is this discovery? The Dorado structure at the Caley interval is estimated to hold roughly 125 million barrels of oil equivalent. If the actual volume exceeds this estimate, the share price could explode ― especially if the oil price pushes higher!

Jason Stevenson,
Resources Analyst, Markets & Money

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Jason Stevenson is Markets & Money’s resource analyst. He shares over a decade’s worth of investing and trading experience across resource stocks and commodity futures and options. He originally studied accounting and finance at Curtin University, where he was awarded a first-class honours degree. His professional background stems across high-net-worth, top tier accounting (corporate finance, tax and auditing), and sell-side equities research. Before joining the team at Markets and Money, Jason worked at boutique firms which advised fund managers and high-net-worth clients on where to invest. Whether it’s gold, crude oil, copper or an obscure metal like vanadium, you can rely on an in-depth analysis in Markets and Money. Jason also brings you extensive macro, political and geopolitical analysis from around the world. He leaves no stone unturned when it comes to telling the truth. Jason is also the lead analyst of Gold Stock Trader, a premium service for investors serious about precious metal stocks. Websites and financial e-letters Jason writes for:


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