Carnarvon Energy (ASX:CVN) said that Santos (ASX:STO), the operator of the Dorado joint venture project, has decided not to purchase the floating production storage and offloading vessel for the project's phase 1 development, according to a Tuesday filing with the Australian bourse.

This decision also delays the project's entry into front-end engineering and design, pushing back its final investment decision previously targeted for 2025, the filing said.

As a result, the joint venture in which Santos has an 80% stake and the company has a 10% stake is reassessing the project timeline, the filing added.

Despite the delay, the joint venture, which includes OPIC Australia, remains confident in the project and plans further exploration drilling in 2026, the company said.

Shares of the company fell almost 23% in recent Tuesday trade, earlier hitting a 52-week low, while shares of Santos were down past 2%.