As part of the farm out of the project, Advance Energy will fund the Buffalo-10 well on a free carried basis up to a cap of $US20 million.
According to Carnarvon, this means the drilling will be at no cost for the company unless the well is priced at more than $US20m.
It is expected that the transaction will be completed after Advance Energy receives shareholder approval, which is scheduled for mid-April.
Carnarvon managing director and chief executive officer Adrian Cook said the company congratulates Advance Energy on its capital raise and welcomes them to the project.
“The project team is well advanced in their work to drill the Buffalo-10 well in 2021. The well will be suspended so that it can be used for future production. Development plans will also be progressed this year so that is provides us with the opportunity to execute the planned operation to first oil in a short period of time,” Cook said.
“The Buffalo project is progressing well and looks to be posited for a windows in time where there are now forecasts of shortages of quality oil from projects like Buffalo.”
In addition, the company was awarded the WA-523-P permit, which included the previously developed Buffalo field, in May 2016 for an initial six-year term.
The field was discovered in 1996 by BHP and developed using four wells drilled from a small, unmanned wellhead platform installed in 25m water depth, tied back to a floating production, storage and offloading vessel.
Carnarvon secured Petrofac for a drilling management services contract for the project in February.
The scope of the work includes planning, detailed well design, drilling execution and all associated procurement, which will be managed via Petrofac’s well engineering group in Perth.
Petrofac managing director Nick Shorten said the company’s well engineering experts have drilled more than 400 wells for 100 operators.
“We very much look forward to deploying that experience in support of Carnarvon’s exciting advancement in East Timor,” Shorten said.