A total of five new wells have been drilled in the Bo Rang North (BRN) production license over the past couple months which have resulted in extending the envelope for potential oil reserves but have not added significantly to oil production rates. A sixth well is currently drilling ahead just above the target. A summary of the six wells, being the L44-W and NSE group of wells, is outlined below.

Drilling rates have improved with the rig currently drilling between 3 and 4 wells per month, and consequently drilling costs per well have decreased compared to 2009 levels. However, the anticipated 400 BOPD (gross) increase per well has not eventuated with the result that current production rates are in the order of 6,500 BOPD gross (2,600 BOPD net to Carnarvon).

A further 6-9 development wells are scheduled for drilling within the Bo Rang North and Na Sanun East (NSE) production licenses in 2010.

The Operator, Pan Orient, continues to evaluate opportunities for increased oil production apart from drilling new wells, with the deepening of the NSE-H3 well with a workover rig a good but modest example of what can be achieved.

An exploration well in L33 (Carnarvon 40%), to the north of L44, is expected to be drilled before the commitment date in July 2010. Carnarvon is confident of further production increases over the next few months as more infill wells are drilled within the tested outlines of the NSE and BRN production licenses.

Permit Equity

L33, L44 and SW1A Pan Orient Energy (TSX:POE): 60% and Operator Carnarvon Petroleum (ASX:CVN): 40% and Non Operator

Bo Rang “B” Field L44W-A15-2, a deviated appraisal well located approximately 1.1 kilometres east of the BR-3 and BR-4D1 surface location, encountered the top of the Bo Rang “B” volcanic target at a depth of - 473m true vertical depth subsea (TVDSS) and the base at -510.58m TVDSS. The well has been on production for approximately four weeks and is currently flowing at a rate of 360 BOPD gross (144 BOPD net) after initially producing at approximately 500 BOPD gross.

L44W-A15ST1, a step out horizontal appraisal well drilled from the same surface location as the L44W-A15-2 well and a target location approximately 500 metres south of the L44W-15-2 well. The well encountered the Bo Rang “B” volcanic target at a depth of -439m TVDSS and the base at - 463m TVDSS. The well has been on production for approximately five weeks at a rate of 56 BOPD gross after initially coming on at approximately 300 BOPD gross. It is believed the unexpected low rates relative to the deviated L44W-A15-2 well above, may be due to drill cuttings lodged in the fracture system behind the perforated liner that was used in the completion.

L44W-A14, a step out appraisal well located approximately 1.1 kilometres east of the L44W-A15 surface location was drilled to test the areal extent of the Bo Rang “B” field assigned as possible reserves in the December 31, 2009 reserve report (“3P”). The main Bo Rang “B” volcanic reservoir was encountered at a depth of -539m TVDSS, two metres below the estimated oil water contact of - 536m TVDSS assigned as probable reserves in the December 31, 2009 reserve report (“2P”) and the base of the volcanic at -564m TVDSS, four metres below the 3P estimated oil water contact of - 560m TVDSS. The well is planned to be tested over three intervals, of which the bottom two have been completed:

Tags: Carnarvon Petroleum Limited