Carnarvon Petroleum NL

September 2002 Quarter

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30 October 2002

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Dear Sirs,

QUARTERLY REPORT FOR SEPTEMBER 2002

Please find attached Carnarvon Petroleum NL’s Mining Exploration Entity Quarterly Report for the quarter ended 30 September 2002 incorporating:

-Report on activities for the September 2002 quarter (3 pages); and

-Appendix 5B (5 pages).

Yours faithfully,

CARNARVON PETROLEUM NL

Leonard Troncone

Company Secretary


30 October 2002

REPORT FOR SEPTEMBER 2002 QUARTER

HIGHLIGHTS

  • The draw down by the SW1A Joint Venture of Gemini’s US$ 2 million funding was finalised during September allowing operations to begin on the Phase 2 Development program.
  • Hydraulic fracturing of wells WB-N 2 and 3 was conducted during September and was an operational success with both wells showing an increase in production from pre-frac levels.
  • Production License II (PL II) and Exploration License L44/43 were awarded. PL II contains the WB-N1 well and the highly prospective Huai Phai feature as well as the extension to the Wichian Buri Oil Field.
  • Three successful wells (WB-N4, N5, and N6) were drilled during early October and encountered oil in the F Sandstone as well as two additional intervals. Production testing will begin during late October/early November with the wells to come on stream shortly thereafter.
  • The Company raised nearly $2 million in capital, with the raising being strongly supported by existing shareholders.

EXPLORATION & DEVELOPMENT ACTIVITIES

SW1A Concession – Thailand

(Carnarvon 40%)

The first part of the Phase 2 Development of the Wichian Buri Oil Field, comprising the fracturing of two existing production wells, was an operational success. The operations consisted of hydraulic fracturing the WB-N2 and WB-N3 producing oil wells. The WB-N2 well was fractured on 15 September and WB-N3 on 16 September. The wells were brought back on production at levels much higher than the pre-frac levels but have since settled at production rates some 50% higher than previous levels.

Deliberations are under way to re-enter WB-N1 which lies within the recently awarded PL II and to either re-perforate a lower zone or to frac the well or both.

WB-N4, N5, and N6 were drilled in quick succession during the first half of October and were all successful oil wells having encountered oil in the F Sandstone as well as in the E and G Sandstones. Markedly improved porosities and permeabilities compared with previous N wells were observed in these latest wells and the greater Wichian Buri Field within the F Sandstone has been extended considerably towards the north.

The presence of oil in the E and GSandstones is encouraging and these oil bearing zones will be perforated at a later stage after production rates have been established for the proved F Sandstone.

The SW1A Joint Venture partners are having discussions with respect to the Phase 3 Development of the Wichian Buri Oil Field which could include follow up drilling targetingall the discovered intervals as well the drilling of Huai Phai, a separate but adjacent structure within the recently awarded PL II.

CarnarvonBasin (Western Australia)

EP 110

(Carnarvon 25.8585%)

This permit is located onshore/offshore at Onslow, Western Australia, and is adjacent to the Tubridgi Gas Field. The Operator, Gulliver Productions, has been reinterpreting the existing seismic database with a view to defining a drillable prospect. Carnarvon Petroleum has a free-carried interest in this seismic interpretation program. The proximity to Tubridgi will make the economics very attractive and reduce the time required to bring on stream a new discovery.

PapuanBasin (Papua New Guinea)

PRL 4 and PRL 5 including the Stanley, Elevala, and Ketu discoveries.

(Carnarvon 15%)

These licenses are located in the foreland of the PapuanBasin in Papua New Guinea near the port town of Kiunga on the Fly River. Three gas/condensate discoveries were made in the old PPL 157 and are now retained in the Production Retention Licenses (PRLs) 4 and 5. Total reserves are estimated to be in the order of 1 trillion cubic feet of gas and about 50 million barrels of condensate based on estimates made by the permit’s Operator, Santos Niugini Exploration Limited.

CORPORATE

An extraordinary general meeting of the Company’s shareholders was held on 5 September 2002 during which shareholders approved certain capital raising initiatives, namely:

-The issue to existing shareholders of up to 18,750,000 ordinary shares at 4.2 cents per share pursuant to a share purchase plan. The Company received acceptances for 17,073,200 shares and raised $717,074; and

-The issue of up to 30,000,000 ordinary shares at 4.2 cents per share pursuant to a placement of shares. The placement was fully subscribed and the Company raised $1,260,000.

Overall, the Company raised a net $1,830,500 after allowing for costs associated with the capital raising of $145,574.

The capital raising was strongly supported by the Company’s existing shareholders who subscribed for approximately two-thirds of the shares offered for subscription.

On 6 September 2002 the SW1A Joint Venture partners drew-down US$2 million in funding provided by Gemini Oil & Gas Limited. The funding is a royalty arrangement whereby Gemini will fund the majority of the costs for the Phase 2 Development program for the Wichian Buri Oil Field in exchange for future royalty payments from oil produced from the proved F Sandstone reservoir.

For and on behalf of

CARNARVON PETROLEUM NL

30 October 2002

Enquiries can be directed to:

Ken Tregonning on 03 9824 2104

or Len Troncone on 08 9288 4522.

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