Carnarvon's Dorado stake sits idle while managers wait on Santos

Collins St Asset Management and NGE Capital detail a sum-of-the-parts valuation of 20 to 40 cents per share

13 Apr 2026 · 5 min read

Carnarvon Energy remains, in the words of the fund managers who follow it most closely, a stock the market prices as if its stake in a major offshore oil and gas project were worth nothing at all.

Collins St Asset Management said in a Quarterly Report in December 2025 that despite its conviction that Carnarvon's exposure to the Dorado project is worth hundreds of millions, the market continues to price the company as if that stake were worth nothing. The manager said that with a market capitalisation of just $150 million, CVN sits on $100 million in cash, $80 million in listed shares, a $140 million capital call from PCP Taiwan and a 10% interest in a 500-million-barrel oil and gas project, and on its conservative valuations, CVN should trade above 20 cents per share but currently sits below 9 cents.

On our conservative valuations, CVN should trade above 20 cents per share but currently sits below 9 cents.

— Collins St Asset Management, Quarterly Report, December 2025

Why Dorado's fate rests with Santos

The reason for that gap comes down to who controls the timeline. NGE Capital said in a Monthly Report in August 2025 that Carnarvon's assets, comprising cash, a 19.9% shareholding in Strike Energy, a 10% stake in the Dorado oil and gas development offshore Western Australia, a development free carry, a 20% stake in the Pavo oil find and interests in exploration assets, could be worth 25 to 40 cents per share on a present value basis, comparing very favourably to a month-end share price of 10 cents.

The manager said its valuation range is driven by uncertainty around the Dorado development timeline, as operator Santos, which holds an 80% stake in the project, has dragged its feet on advancing the project through FEED to FID, having been unable to sell down a portion of its interest in 2024 to reduce its roughly US$2 billion share of upfront capex. NGE Capital said at its average entry price of around 10.46 cents, the fund is effectively paying only for Carnarvon's cash balance and Strike Energy shareholding, getting the Dorado stake, development free carry, Pavo interest and exploration assets for free.

Two named fund managers took opposite sides of that same bet in an Article in April 2026. Datt Capital called it a hold, saying Carnarvon has some really great assets and is asset-rich, but that its primary asset, the interest in Dorado, is essentially a stranded asset at the mercy of Santos as operator, adding that if you're already in it, you just never know what may happen tomorrow.

Acorn Capital disagreed, calling it a sell for similar reasons but reaching the opposite conclusion, saying Carnarvon is really not in control of its own destiny, and that because Santos is spending so much money on other projects, this just isn't a priority, no matter how good the discovery is.

It's a sell for me for similar reasons — it's really not in control of its own destiny. It doesn't matter how good it is, they're not going to fast-track the development because they just don't have the capital to spend on it.

— Acorn Capital, Article, April 2026

Catalysts Collins St and NGE Capital are watching

Collins St Asset Management listed the specific 2026 catalysts it is watching in its December 2025 Quarterly Report: a final investment decision by Santos on Dorado, still inexplicably delayed, which would represent a major re-rating event, and the outcome of Carnarvon's own strategic review, which could unlock value through a material capital return or buyback, the sale or partial sale of Dorado, or alternative strategic investments.

By March 2026, the same manager reported in a Quarterly Report that Carnarvon was among its top performers for the quarter, attributing the move to surging energy prices and the prospect of M&A activity they often spark, arguing Australia's ongoing energy crisis positions Dorado as a high-quality, near-term development that Santos might once again prioritise, even as the shares had climbed only from 8.6 cents to 10 cents.

NGE Capital's most recent detailed update, an Annual Report in February 2026, said Carnarvon detracted from performance in calendar 2025, with the share price down around 17% from its purchase price to close at 8.6 cents, attributing the slide mainly to a decline in the share price of Strike Energy and a delay to exploration drilling, with two wells originally expected in mid-2026 scaled back to one well in the first half of 2027.

The manager noted Santos had submitted its Environment Plan for a multi-well exploration campaign in the Bedout Basin and is separately targeting drilling on a permit jointly held with BP adjacent to Dorado, reading Santos' stated intention to soon work on a second drilling Environment Plan as a positive sign that it remains interested in these assets even while shedding other non-core positions.

What managers are watching next

With Santos still to commit to a Dorado FID, Carnarvon's own strategic review still open, and a single exploration well now pushed to the first half of 2027, the managers who remain invested describe the stock as an asymmetric bet: meaningful upside if the Dorado project or exploration campaign delivers, but limited near-term catalysts if Santos continues to prioritise capital elsewhere.