It’s been a transformative year for Carnarvon Energy (ASX: CVN), with the oil and gas explorer undergoing a corporate overhaul aimed at positioning itself for the future. CEO Philip Huizenga provided key insights during an interview at the RIU New Energy Conference, laying out the company’s new strategy and vision. The key takeaway? A laser-sharp focus on their prized Dorado oil project, the largest undeveloped oil field in Australia.
A Corporate Overhaul
Reflecting on the past 12 months, Huizenga noted that while operational progress has been steady, most of the action has taken place at the corporate level. With three new directors onboard—two with strong investor credentials—the company has been reshaping its strategy to ensure it delivers maximum value for shareholders.
“We know we’ve got great assets and management that know oil and gas,” said Huizenga. “It really allows the company to focus on our shareholders and returns to shareholders, which as an ASX-listed company, that’s very important for us.”
This shift reflects a broader emphasis on balancing operational execution with disciplined capital management and investor-focused decision-making.
Dorado: The Centrepiece of Carnarvon’s Future
When asked what the new-look Carnarvon, or “Carnarvon 2.0,” would focus on, Huizenga didn’t mince words.
“We’re very much focused on our core asset, which is Dorado. We’re 10% of the largest undeveloped oil field in Australia. It sits in the Northwest Shelf of West Australia. We’re looking to get that to FID [Final Investment Decision] next year, and First Oil a few years after that.”
Dorado, co-owned with operator Santos, boasts a 160 million-barrel liquid resource and is central to Carnarvon’s growth ambitions. The path forward involves getting Dorado to FID by 2024, with production slated to start a few years after that. While this timeline has been publicly discussed, it will become more concrete as environmental approvals and other regulatory steps move forward.
Huizenga emphasised that exploration will continue around the Dorado field, with Santos leading the way on drilling activities. “We just want to find more oil and gas,” he said, signalling that while Dorado is the company’s crown jewel, there’s still potential to unlock further value in the surrounding area.
A Leaner, Meaner Balance Sheet
Carnarvon isn’t just banking on Dorado’s success—it’s literally banking on smart financial management. Huzinga was quick to highlight the company’s robust financial position, with $180 million in cash reserves, largely the result of savvy deals in recent years.
“One of the great things about Carnarvon at the moment is we’ve got $180 million of cash in the bank. We’ve secured that by doing some very good deals in recent history,” said Huizenga. He added that with interest from that cash covering corporate costs, the company can conserve these funds for capital investments in Dorado.
In addition to its cash pile, Carnarvon has secured another US$90 million in capital from last year’s agreements, earmarked for further investment in Dorado and exploration around the area. With the company’s cost structure streamlined and overheads reduced, Carnarvon is well-positioned to fund its share of Dorado’s development without overextending its balance sheet.
What to Watch for in 2024
For investors looking to track Carnarvon’s progress, Huizenga advised keeping an eye on Dorado’s FID timeline. The lead-up to FID is likely to be marked by public filings and environmental approvals, providing visible signals that the project is moving forward.
“There’ll be environmental plans. We’ll see things in the paper, etc. It just shows you that there is progress going forward,” Huizenga said.
Looking further ahead, the first barrel of oil from Dorado could flow in a few years, with the company targeting initial production soon after FID. For shareholders, this marks the point where Carnarvon’s investment in Dorado will start to pay off, potentially transforming the company into a serious producer on the global stage.
Lean, Focused, and Funded for Growth
Huizenga’s message at the conference was clear: Carnarvon is entering its next phase with a streamlined focus, a well-capitalised balance sheet, and a core asset that has the potential to drive significant value. The recent corporate changes, coupled with a strong partnership with Santos and a disciplined financial approach, mean Carnarvon is primed for a new chapter.
“Exciting times ahead for Carnarvon and its shareholders,” Huizenga remarked, and the market will no doubt be watching closely as the Dorado story continues to unfold.
