Chairman’s review

While global market turbulence and uncertainty has proven a challenge to negotiate over the course of the last twelve months, I believe there has been merit in being prudent during this time to ensure the Company remains on a strong footing to progress its world class assets.

To that end, your Company is in good standing, with considerable funds available for investment in a quality development asset in Dorado and unrivalled exploration opportunities in the Bedout Sub-basin, offshore Western Australia.

Over the course of the last twelve months, the Company has made clear and tangible progress in high grading its exploration portfolio, with a particular focus now on the Bedout Sub-basin offshore Western Australia and progressing financing for the Dorado development within this basin.

While I would like to thank the Carnarvon team who worked hard to prepare the Dorado asset for a Financial Investment Decision (FID), I would also like to record my personal frustration with the progress of development, especially around the delay to FID that we reported to shareholders in August 2022. Our partner and operator of the Dorado development has not progressed development activity at a pace that Carnarvon wishes, despite best efforts by Carnarvon. This delay to FID had a knock-on impact to Carnarvon’s share price which was particularly disappointing for shareholders. Strategically, we had been running multiple funding options that enabled us to secure capital for the Dorado development from an asset sell down rather than an equity raising.

The decision to sell a 10% equity in the Dorado and Pavo fields, along with a 10% interest in the Company’s four Bedout exploration blocks to CPC Corporation, Taiwan (CPC), Taiwan’s national oil and gas company, ensures the Company is in a very strong and selfsufficient financial position.

I’m very pleased that, at the time of writing this report, we have successfully completed the divestment and I welcome CPC to the Bedout Joint Venture.

Decarbonisation efforts to mitigate climate change worldwide have accelerated in recent times, though there are many obstacles, including available finance and technology solutions. Carnarvon has experienced this first-hand in its efforts to produce renewable energy products. This has resulted in the Company taking a cautious approach to investing in this area until solutions to these challenges are better defined. Whilst renewable energy has been the main technical solution to decarbonisation, the need for petroleum products remains and will do so well beyond 2050.

Adherence to the environmental, social and governance policies that Carnarvon has adopted has been excellent, and carbon emissions from Carnarvon’s current activities have been offset. These policies are also constantly reviewed to match regulatory requirements and community expectations and the Company is active in mitigating the risks associated with future offsetting of its scope 1 and 2 emissions.

During the past year, Carnarvon staff have demonstrated a dedication to furthering the future of the Company and my fellow Board members have provided excellent counsel in developing the strategies for the Company’s future, and the execution of these. I wish to thank everyone for their efforts in what has been a difficult climate to progress activity.

For those shareholders who have been with us on the journey throughout the past year and beyond, my appreciation for the patience you have demonstrated and for your continued support of the Company.

William (Bill) FosterChairman