Australia’s Carnarvon Petroleum has completed the farm-out of the Buffalo project, located offshore Timor-Leste, to Advance Energy and the two partners will move to develop the field quickly to take advantage of the strengthening oil markets.
Advance Energy and Carnarvon have satisfied all of the conditions precedent and all completion requirements have been met, Carnarvon said in an update on Tuesday.
On 17 December 2020, Carnarvon announced that Advance Energy will acquire 50 per cent of the Buffalo project by funding the drilling of the Buffalo-10 well up to $20 million on a free carry basis.
Advance has met this funding requirement by raising the capital to acquire the interest and now has a 50 per cent in the project.
The Buffalo-10 well is on track to be drilled in late 2021, subject to securing a drilling rig, where the tendering process is already underway.
Carnarvon Petroleum has already awarded a drilling management services contract to Petrofac.
Following the well, the joint venture will acquire development funding from third party lenders and any additional funding requirements (in addition to that provided by third party lenders) will be provided by Advance as an interest free loan.
Carnarvon Managing Director and CEO, Adrian Cook , said: “The completion of this transaction is fantastic news for Carnarvon and Advance Energy and now we look forward to drilling the Buffalo-10 well later this year.
“The joint venture will move to develop the field quickly to take advantage of the strengthening oil markets. This will be achieved by suspending the well as a future production well and commencing early development studies during 2021.
“The Buffalo field has the advantage of being in shallow water which enables a low cost project. This together with the certainty of the fields historical production characteristics enables a fast track timetable and makes Buffalo an exciting project for Carnarvon shareholders”.
The Buffalo field was originally discovered in 1996 by BHP and subsequently developed using four wells drilled from a small, unmanned wellhead platform installed in 25 metres water depth, tied back to an FPSO, the Buffalo Venture.
The previous project was decommissioned in 2005 due to low oil prices and limitations on seismic processing capability to optimise well locations at that time. No facilities were left behind and all wells were safely plugged.