Carnavon Petroleum Limited (ASX: CVN) is leading the share market gainers today after it reported a “significant” oil discovery at its Caley Sandstone tenement off the coast of Western Australia.
Investors sent the stock 55% higher on the back of the news and the oil explorer suggested there could be more good news ahead with it still to complete its drilling program across the area where it has already struck the black gold.
“This is a significant discovery given the quantum of the net pay thickness, the quality of the oil and the extremely good reservoir characteristics,” boasted Carnavon’s managing director Adrian Cook.
For the 12 months to June 30 2018 Carnavon went through $10 million in operating cash flow due to the exploration costs of its drilling efforts, although it still has a healthy $63 million cash in hand with investors that participated in a recent $20 million capital raising sitting on handsome profits this afternoon.
Elsewhere in the energy space Oil Search Limited (ASX: OSH) shares are down 2.6% today after it handed in a mixed quarterly production update.
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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.