The Carnarvon Energy Ltd (ASX: CVN) share price has returned from its trading halt with a bang.
In morning trade, the energy producer's shares were up as much as 36% to a 52-week high of 43.5 cents.
The Carnarvon Energy share price has since pulled back but remains up 16% to 37 cents at the time of writing.
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Why is the Carnarvon Energy share price shooting higher?
Investors have been bidding the Carnarvon Energy share price higher today following the release of drilling results from the Pavo-1 well.
The Pavo-1 well is covered by the WA-438-P exploration permit, which Carnarvon Energy has a 30% interest in, with Santos Ltd (ASX: STO) owning the balance.
According to the release, drilling activities confirm that the Pavo-1 well has made a material oil discovery. Light oil has been recovered from excellent reservoirs and the highly porous and permeable sands contain a net pay thickness of 46 metres from within a gross hydrocarbon package of 60 metres.
These results are expected to add significant value to the Dorado development plan.
Carnarvon's Managing Director and CEO, Adrian Cook, commented: "Today we announce another important oil discovery in the Bedout Basin, with high quality oil having now been recovered to surface from excellent quality reservoirs. This discovery is material because Pavo lies only 46 kilometres from the proposed Dorado production facilities and is expected to be an ideal resource to tie back to Dorado."
What's next?
Mr Cook notes that it will soon be time to decide on the future of the Dorado operation.
He said: "Subject to the joint venture making a final investment decision (FID) this year, the Dorado production infrastructure is planned to be in-place by the end of 2025 and will have the capacity to tie-in other fields like Pavo with no material increase in operational costs."
"Pavo proves the extension of a working petroleum system some 46 kilometres east of Dorado. The well demonstrates that quality reservoir and trapping mechanisms are effective in this area, which hosts a suite of other exploration targets. These will now warrant further assessment for drilling."
"We have a number of additional drilling activities to undertake in the Pavo-1 well before moving the drilling rig to the Apus-1 well location. Overall, we are extremely pleased with the Pavo-1 result and are looking forward to it adding significant value within what is now expected to be an expanded Dorado production hub," he concluded.
