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New oil discovery off Port Hedland

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A new oil strike off the North West shelf in WA has investors excited, as it may prove to be one of the biggest discoveries in Australia.

Explorer Carnarvon Petroleum announced the find to the ASX yesterday, causing a 38 per cent boost for their share price from $0.18 to $0.25 before 3pm, which then closed at $0.23.

Carnarvon Petroleum owns 20 per cent of the interest in the Phoenix South-1 project, along with Apache energy (40 per cent), JX Nippon (20 per cent) and Finder Exploration (20 per cent).

Although further testing is required, preliminary permeability estimates indicate the find will be a productive reservoir, with four discrete oil columns confirmed.

Carnarvon Petroleum managing director Adrian Cook said although the implications of their WA-435-P exploration acreage were still being assessed, the discovery was “potentially extraordinary”.

“Despite some of the challenges and setbacks, this well has delivered a significantly better outcome than any of us could have imagined,” he said.

The well site is in a completely new oil province, just outside of the Carnarvon Basin and 180 kilometres north of Port Hedland.

WA-435-P covers approximately 20,000 square kilometres, and other acreage holders in the area include Woodside and Shell.

The samples recovered from Phoenix South-1 indicate light oils of 46 to 48 degrees API, a positive sign for an area which has not been drilled for 20 years.

The samples were taken from within the Triassic Lower Keraudren formation, at around 4160 and 4540 metres of measured depth.

Carnarvon’s estimates for the production yield are cautiously wide spanning, between 30 to 375 million barrels.

Cook said Carnarvon Petroleum and its partners will be in a position to reveal evaluations of log and core data by the end of 2014.

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