Welcome to Central Petroleum

Overview

  • Listed on the ASX March 2nd 2006
  • Biggest acreage portfolio in Australia 50 million acres 100% operated
  • Whole of basin exploration opportunities
  • “Yet to find” Amadeus resources unrisked up to 35 TCFG or 6 billion bbls (NTGS 2005)
  • CBM prospective recoverable resources Pedirka Basin 34–70 TCFG (P90–P10)
  • 6 well initial programme targeting 300 MMbbls oil, 3.4 TCFG and 105 BCF Helium subject to additional capital and/or farmouts
  • Over 200 prospects and leads
  • Genesis of the Company 1998 when oil traded at $12/bbl
  • Long range GTL plans for gas, 10,000–140,000 bbl/day pre-feasibility studies completed
  • Recently completed (Jan 2004) infrastructure direct link to Port Darwin
  • Experienced management
  • Good risk spread in different basins, different play types and different commodity marketing targets ie gas, oil, condensate, diesel, naphtha, jet fuel and Helium
  • Farm-outs completed and in progress towards formal agreements:
    1. 50% for 25% pre-drilling seismic Mt Kitty and Magee prospect blocks with farmin partner He Nuclear Limited-formalised
    2. 40% for 20% of $3 million seismic and up to 3 wells over every permit with Petroleum Exploration Australia Limited-formalised
    3. 20% for 10% of $3 million seismic and up to 3 wells on EP 115 with Trident Energy Limited-MOU expected to progress to formal agreement

Rationale

The Company believes that the oil and gas potential of central Australia has been significantly overlooked and the area remains one of the true under-explored and under-developed proven petroleum provinces within Australia. To date over 14.5 MMbbls of oil and 285 BCF of gas have been produced within central Australia leaving existing known resources significantly under-developed. Estimates by the Northern Territory Geological Survey estimate up to about 6 billion barrels of oil equivalent (35 TCFG equivalent) unrisked recoverable hydrocarbons (650 MMbloe “risked”) remain to be discovered in the Amadeus alone while the Pedirka is estimated to contain at P10 level upside potentially recoverable resources of about 200 MMbl of oil in just two prospects considered mature for drilling by the Company.

A recent CBM and GTL pre-feasibility study undertaken by Mulready Consultants and Holt Campbell and Payton consulting engineers details prospective recoverable CBM resources ranging from P90–34 TCFG to P10–70 TCFG which according to the study have potential for fueling a 140,000 bbl/day GTL plant located at Alice Springs to produce ultra clean diesel, jet fuel and naptha over a 70 year plus lifetime The breakeven prevailing oil price of such a plant would be c. US$30/bbl. Smaller intermediate plants fuelled by conventionally reservoired gas are also under consideration.

The extensive coal measures in the Pedirka Basin have recently been added to with the acquisition, subject to grant and transfer, of Exploration Permits EPA 104, 105 and 106 currently operated by Traditional Oil Pty Ltd. This package will add some 8,000 km2 of additional coal measures as well as significant exploration potential for conventionally reservoired oil, gas, condensate and Helium.

There are numerous untested other leads not evaluated yet. Both Ooraminna and Waterhouse prospects in the Amadeus have flowed gas to surface but remain un-evaluated; both prospects are over 300 square kilometres in upside closure.

Since 1998, when oil traded at $12/bbl, the Company has undertaken a highly focused strategy to secure acreage within the areas it considers to be the most prospective for oil and gas within central Australia and will seek to increase its presence in this focus area. The Company will also pursue the acquisition of a reserve based asset or assets internal or external to this area if such opportunities can provide early monetisation to aid in funding the exploration and development of the Company’s current interests.

Early exploration in the 1960s by such groups as the French Petroleum Company, a wholly owned subsidiary of Total, Santos, Beach Petroleum and North Broken Hill produced some encouraging results. Indeed Magellan and others discovered the still producing Mereenie and Palm Valley oil and gas fields which at one time were Australia’s biggest onshore oil and gas fields with over 140 MMbbls of oil equivalent in reserves.

Several factors conspired to thwart development of central Australia from the 1960s to the advent of Central Petroleum’s current strategy. These factors included the remoteness of the region, the relatively unattractive economics of developing sales gas for transport by pipeline to the east coast domestic markets, the lack of rail transport links direct to export markets and low oil prices rendering GTL economics unattractive. With the advent of prevailing higher oil prices and the commissioning of a rail link to direct to port facilities in Darwin, the area is now ripe for development.

Several new play types being developed by Central include:

  1. The Horn Valley fractured source unconventional gas play including basin centred gas plays in this extensive formation gas mature over c.100,000 square kilometres
  2. Flanking “halo” plays over very wide synclinal features with reservoir targets terminating on the flanks of steep anticlinal features; some of these are up to 70 km in length and 25 km wide
  3. The Pioneer Sandstone-Aralka Formation petroleum system, hitherto unrecognised, this occurs over 100,000 square kilometres according to recent analysis
  4. Various untested potential oil plays drilled through with air and potentially overlooked
  5. Very large anticlinal targets with Aralka—Pioneer and Heavitree petroleum system potential; largely ignored because of a previous blind focus on Ordovician petroleum systems
  6. Very large Ordovician hanging wall fault terminated 3 way dip closures with attendant sub-thrust potential

It is clear that the basins operated by Central, the Amadeus, the Pedirka, the Lander Trough and parts of the Georgina Basin represent probably some of the least explored prospective basins in the world onshore.

Central aims to develop with its joint venture partners a significant production base in central Australia based value adding to petroleum and Helium products prior to shipment to domestic or international destinations via the recently established rail link to Port Darwin as an alternative to piping products via Moomba.