"During December, the SW1A Joint Venture, in which Carnarvon Petroleum NL has a 40% interest, generated a cash operating profit before royalty of over $US100,000," Carnarvon said. "Most of the JV costs are fixed and the results illustrate the high leverage of the profit margins and cash flow that will improve significantly as production levels increase."

Carnarvon said the net contribution to the company, before royalty to Gemini Oil & Gas of 12.5%, was some $70,000.