Welcome to Central Petroleum Limited
Breaking News
Overview
Central Petroleum is a ASX listed junior exploration and production company operating what is regarded as the biggest package of prospective acreage in Australia at over 270,000 km2.
The Company’s main goal is to maximise shareholder returns by enhanced share value and potentially by dividend payments. It aims to operate a central Australian petroleum hub connected to appropriate infrastructure to allow the export to domestic and overseas markets of both primary energy resources and value added petroleum and helium products.
The Company plans to potentially capitalise on early cash flow from any oil discoveries but is seeking to build gas resources to a threshold point where value–adding processes such as LNG and or GTL for example can be brought into play. With helium prices approaching $145 USD/1,000 scfg in the USA, helium production and sales are regarded as an intrinsic part of this overall strategy. Apart from conventional gas reservoir potential, the Company has had independent estimates of over 10,000 trillion cubic feet in UCG “syngas” prospective recoverable resources and as well has produced inhouse estimates coupled with external independent reports of up to c.200 trillion cubic feet of gas in CSG and other unconventional reservoirs. Prospective recoverable resources of oil are in the billion barrel class.
The acreage includes the majority of the Pedirka Basin in the Northern Territory and in South Australia, the majority of the Amadeus Basin in the Northern Territory, all of the known Lander Trough in the Northern Territory and approximately 25,000 km2 of the Southern Georgina Basin.
The Company was formed by Mr John Heugh and Mr Richard Faull in 1998 in a countercyclical strategy aimed at securing large acreage tracts with very large targets in prospective areas of strategically well placed parts of central Australia and later to examine potential for the monetization of gas resources via Gas to Liquids (GTL) Fischer Tropsch and LNG technology in the production of zero sulphur diesel, naphtha and jet fuel.
Key Points
- Robust exploration programme underway 2009/10
- Listed on the ASX March 2nd 2006
- Genesis of the Company 1998 when oil traded at $12/bbl
- Biggest acreage portfolio in Australia 60 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)
- CSG prospective recoverable resources Pedirka Basin 34–70 TCFG (P90–P10-subject to ongoing review)
- Horn Valley Siltstone unconventional shale gas and oil potential 12–90 TCFG UGIIP and 10 Bn.bbls respectively
- Trillion tonne coal Exploration Target Pedirka Basin
- Billion bbl and multi TCFG unconventional potential Southern Georgina Basin
- Helium potential of up to 200 BCFG Helium in UGIIP Mt Kitty Prospect alone
- Over 200 prospects and leads
- 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, and existing pipeline to Darwin–possible entry to LNG potential
- Experienced management and Board
- Good risk spread in different basins, different play types and different commodity marketing targets ie gas, oil, condensate, diesel, naphtha, jet fuel and Helium
- Dramatically underexplored given an average discovery success rate of over 4 MMboe per exploration well thus far in the Amadeus and with an average well density of c. 1 well per 5,000 square kilometres (1.2 million acres)
- Current Joint Venture participants include Petroleum Exploration Australia Limited (now owned be QGC, a BG Group Business, Trident Energy Limited, He Nuclear Limited and Red Sky Energy (NT) Pty Ltd, a wholly owned subsidiary of Red Sky Energy Limited.
Exploration Programme 2009/10
The Company plans, subject to various contingencies, a robust exploration ongoing programme which commenced Q4 2009 including :
Phase One 2009
- 5 fully cored CSG wells Pedirka Basin (initial exploration for 34–70 TCFG prospective resources CSG, >10,000 TCFG UCG)
- Gore survey Johnstone, Suprise, Stuart and North West Mereenie (c.900 MMbbls UOIIP)
- 1,350 line km seismic (Amadeus and Pedirka)
Phase Two 2010-the Company has a number of prospects either ready to drill or which will be ready to drill throughout 2010 including the following :
- 3 – 6 conventional wells (Amadeus Basin) :
- Ooraminna – 2, gas up to 2TCFG.
- Johnstone –1 oil up to 500 MMbbls UOIIP Ordovician (Mereenie style) and other horizons, Surprise, Stuart, NW Mereenie, all within EP 115
- Magee – 2 gas, condensate, Helium, up to 500 BCF UGIIP,15 BCF Helium UGIIP, subsalt
- An oil well in the Rawson Resources Limited EP 97 Simpson Prospect Block
The initial focus is planned to be be :
- Ooraminna 2, EP 82, a 2 TCFG UGIIP gas prospect close to Alice Springs, first drilled in 1963 and which has flowed gas to surface before. The Company plans to drill a deviated well to maximise fracture intersection produceability. Essentially this second well is a step-out to a previous discovery.
- Johnstone 1, EP 115, a 500 MMbbl UOIIP oil prospect designed to test similar oil horizons to the Mereenie Field further to the south-west. A number of other prospects are available within EP 115 for drilling in 2010 if the first well may be successful. One of these, the Surprise Prospect, close to Johnstone 1, may host up to over 700 MMbbls UOIIP.
- Magee 2, within the He Nuclear Limited Magee Prospect Block within EP 82, a up to 800 TCFG UGIIP prospect drilled for the first time 1992 when a technical discovery was reported with gas flowing to surface from the sub-salt Heavitree Formation, The gas contained 6.3% Helium, (which currently sells in the USA for over USD$100/1,000 cubic feet in its pure form) as well as a mix of other gases including hydrocarbons and condensate.
UGIIP : Undiscovered Gas Initially In Place (“high estimate”)
UOIIP: Undiscovered Oil Initially In Place (“high estimate”)
In summary, Central Petroleum holds and operates a highly prospective portfolio of under explored onshore acreage, with a variety of exploration plays spread over a number of basins, one of which hosts producing fields. Very importantly, it seems no longer the case that only the very large discoveries can be economically developed.
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 c. 20 MMbbls of oil and 0.5 TCFG of gas have been produced within central Australia from the Mereenie and Palm Valley fields 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 Johnstone oil prospect, considered mature for drilling by the Company may host up to 300 MMbbls of UOIIP.
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 fuelling 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 of Exploration Permits EPA 104, 105 and 106 currently operated by Traditional Oil Pty Ltd. This package added some 8,000 km2 of additional coal measures as well as significant exploration potential for conventionally reservoired oil, gas, condensate and Helium.
A report on viable coal "Exploration Target" of over 1 Trillion tonnes above 1,000m depth in the Company's Pedirka Basin petroleum acreage has been recently published and the Company has also taken up mineral exploration permit applications over most of the same petroleum acreage in the Pedirka to cover the possibility of the Northern Territory government classifying UCG (Underground Coal Gasification) as an activity under the Mining Act. In addition the area may have as yet unexamined potential for other minerals such as potash and phosphate.
There are numerous other untested 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 and are still in production.
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 sea ports linking 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:
- The Horn Valley fractured source unconventional gas play including basin centred gas plays in this extensive formation gas mature over c.10,000 and oil mature over 7,000 square kilometres are considered to be potential analogues of the Baxter and Bakken Shale plays in the USA
- The Company's Southern Georgina Basin permit applications host a regionally extensive shale body, the Arthur Creek Shale, mature variously for oil and gas with an average thickness of 500m which compares well in terms of source rock characteristics with the Baxter and Bakken Shales in the USA
- 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
- The Pioneer Sandstone–Aralka Formation petroleum system, hitherto unrecognised, this occurs over 100,000 square kilometres according to recent analysis
- Various untested potential oil plays drilled through with air and potentially overlooked
- Very large anticlinal targets with Aralka–Pioneer and Heavitree petroleum system potential; largely ignored because of a previous blind focus on Ordovician petroleum systems
- Very large Ordovician hanging wall fault terminated 3 way dip closures with attendant sub–thrust potential.
- Numerous salt structure plays
- A giant interpreted Devonian rimmed carbonate platform play type in the Pedirka Basin considered to be analogous in general geology to many prolifically producing fields in central Asia
- Numerous long channel sands descending into tempestites in the Southern Georgina Basin which are interpreted to have viable reservoir, source and seal characteristics
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 but prospective onshore basins in the world. The Pedirka Basin is considered to be analogous with the Cooper Basin in Australia while the Amadeus Basin, Lander Trough and the Southern Georgina Basin are considered to be analogous with the producing basins in Oman, the Eastern Siberian Platform and the Sichuan Basin in China by virtue of the inherent geology and structures present.
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.
Competent Persons Statement and General Disclaimer
The information in this website report which relates to mineral (coal) Exploration Results is based on information compiled by Mr Allen Maynard, who is a Member of the Australian Institute of Geosciences (“AIG”) and a Corporate Member of the Australasian Institute of Mining & Metallurgy (“AusIMM”) and an independent consultant to the Company. Mr Maynard is the principal of Al Maynard & Associates Pty Ltd and has over 30 years of exploration and mining experience in a variety of mineral deposit styles. Mr Maynard has sufficient experience which is relevant to the styles of mineralisation and types of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Maynard consents to inclusion in this website report of the matters based on his information in the form and context in which it appears. Potential volumetrics of gas may be categorised as undiscovered prospective recoverable gas in accordance with AAPG/SPE guidelines. Since some oil volumetrics are derived from gas estimates the corresponding categorisation applies.
Resource estimates included in this report by the Company, have not been reviewed by either PXA, QGC, Trident Energy Limited or He Nuclear Limited. Therefore those resource estimates represent the views of the Company and are not necessarily held by PXA, QGC, Trident Energy Limited or He Nuclear Limited. The Company, is interested in UCG applications in its own right, outside of the Joint Venture with PXA and references to UCG potential do not necessarily reflect the views of PXA or QGC.
Exploration programme recommendations in this report have not been approved by relevant Joint Venture participants and accordingly constitute a proposal only.
Risks
This website report is partially based on the potential of the acreage concerned to host a viable Exploration Target for coal which, if successfully explored for, discovered and proven, could feasibly be exploited utilising technology (Underground Coal Gasification or “UCG”) which has not yet been applied on a large commercial scale in the western world. Apparently commercial scale former Soviet Union, Russian and Ukrainian applications of UCG are difficult to assess and apply in the Australian context due to a lack of detailed information following the collapse of the Soviet Union as a viable entity. Two Australian companies have however, published results from pilot UCG programmes, Carbon Energy Limited and Linc Energy Limited and it is the publically available results from these two programmes, inter alia, that have been applied in this report as a basis for the computation of potential volumes of gas and/or liquid hydrocarbons that may be available from the application of UCG and GTL technology in the Company’s permits and applications for permits in the Pedirka Basin. These published results include the conclusion that in an area suitable generally for UCG, approximately 50% of a given area of coal can be burned via UCG producing approximately 20,000 SCFG per tonne or 20 Gigajoules per tonne. Published results of Gas to Liquids (GTL) plant output have given industry at large a benchmark of 1 barrel of liquid petroleum product such as diesel, jet fuel or naphtha being produced from 10,000 SCFG or 10 Gigajoules of gas input.
Forward Financial Forecasts
Forward financial estimations or forecasts which may be presented in this website report or reasonably to be concluded by an examination of this report should not be regarded as a recommendation to hold, purchase or sell the Shares of the Company, any related entity or any other company involved in similar market segments. Actual exploration results and any financial forecasts may differ greatly from any proposed results. Forecasts by their very nature are subject to significant contingencies and uncertainties outside of the control of the Company and its consultants. The Company does not hold any reserves of oil, gas, condensate or helium at the time of this report.
