Company Profile

Central Petroleum is an ASX listed junior exploration and production company operating what is regarded as the biggest package of prospective acreage in Australia. The Company gained admission to the Official List of the ASX on March 3rd 2006 with shares and options commencing to trade on Tuesday the 7th March. The acreage has been assembled since 1998 when the Company was first formed as Merlin Synergy NL.

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 10,000 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 technology in the production of zero sulphur diesel, naphtha and jet fuel.

The recent completion of the Alice Springs to Darwin rail link is a major factor behind the Company’s decision to acquire 100% of the unlisted companies Ordiv Petroleum Pty Ltd, Helium Australia Pty Ltd and Frontier Oil and Gas Pty Ltd, delivering to the Company over 80,000 km2 of prospective ground in the Amadeus Basin surrounding the Santos/Magellan producing fields of Mereenie and Palm Valley.

BOC Global Helium, Inc., one of the world’s leading suppliers of Helium and Central Petroleum Limited have signed a Memorandum of Understanding to exchange information and to work towards the joint exploitation of helium targeted by Central’s exploration and appraisal programme planned in central Australia where previous exploration has resulted in confirmation of a sub-salt hydrocarbon and helium play type thought to be directly analogous to some of the petroleum fields of the Siberian Platform and the Sichuan Basin.

Central’s exploration expertise is headed up by its non-executive Chairman Dr Henry Askin at board level and has been bolstered by the recent addition of Greg Ambrose, ex Deputy Director of the Northern Territory Geological Survey and an experienced industry geologist and previous team leader in Santos and the Libyan National Oil Company. Greg has been credited as team leader with the discovery of over 400 MMbbls of oil in place previously overlooked in onshore basins in Australia and Libya. Also joining Central is Jason Storey who brings considerable experience in geophysical operations, program management and analysis gained from working in many basins both within South-East Asia/Australasia and internationally. John Heugh, the Company Managing Director has worked in exploration operations or in prospect development in 14 different basins in Australia and overseas with companies such as Ampol, Santos, Arco, Exxon, Pancontinental, Phoenix, Kufpec and others and was responsible for putting together the acreage package Central now operates commencing in 1998 when the oil price was trading at USD$12/bbl. Central also uses well credentialed external service providers to back up its in-house expertise and has an active forward looking programme to identify and fulfil its needs in additional staffing.

Corporate Goal

The Corporate Goal of the Company is “to become the predominant producer of petroleum and value added products in a central Australian energy hub.”

Business Strategy

The Company aims to achieve its Corporate Goal by:

  • Consolidation of prospective acreage
  • Focus on big targets
  • Early oil target monetisation via existing infrastructure
  • Application of value adding technology-GTL/Helium (see below for further information on the BOC Helium MoU)
  • Farmouts/joint ventures

Exploration and Appraisal Plans

Subject to additional funding becoming available via farmouts, joint ventures and/or additional capital raisings together with exploration results providing ongoing vindicaton the Company plans a:

  • 6 well, 2 year programme¹ targeting:

    • 300+ mmbls oil—for early cash flow-3 wells
    • 3,400+ bcf gas-3 wells-2 appraisals of previous discoveries
    • 105+ bcf Helium (MoU with BOC for jv development)

    ¹ at the $10.6 million level of funding raised in the IPO an initial two wells plus seismic targeting 200 mmbls oil of upside potentially recoverable resources is planned.

  • Amadeus basin-appraisal—ex Santos ground
  • Pedirka Basin-discovery
  • Lander Trough-exploration
  • Georgina Basin-exploration
  • Existing infrastructure linking reserves to export or domestic markets via Darwin
  • GTL value adding technology for clean diesel, jet fuel, naphtha feedstock
  • Additional farmouts under discussion

Highlights

  • Initial focus on early monetisation of potential oil discoveries. Three oil prospects (Avalon, Blamore and Johnstone) with 300 MMbbl potential at “best” level
  • A total of six prospects for early attention subject to additional capital raising and/or farmouts in first two year programme targeting 300 MMbbl oil, 3.4 TCFGand 105 BCF Helium potentially recoverable resources at “best” estimates
  • Internationally experienced board with good mix of corporate, commercial and technical skills at high level headed by Chairman Dr Henry Askin, previously Exploration Manager for Shell Australia
  • Mix of advanced previously drilled technical success prospects for appraisal drilling, (Ooraminna and Waterhouse) undrilled prospects, leads and frontier basin grass roots exploration;
  • Operations confined initially to Australia with low sovereign risk and favourable fiscal regimes
  • Provisional Patent (Australian Patent Application No. 2005903202 issued 20 June 2005 which is held by Central Petroleum Limited) and conceptual pre-feasibility study of Gas to Liquids (GTL) plant in central Australia aimed at monetisation and potential value adding to possible gas discoveries
  • Access to prospective ground with drilled evidence of gas of high 6% helium content, a well-priced commodity and MoU with the BOC group for potential joint development and marketing of any Helium discoveries
  • Socially and environmentally responsible corporate philosophy in dealings with traditional owners.
  • All exploration and development assets are close to established or planned infrastructure—lowers drilling, development, production and transport costs;
  • Potential to rapidly translate drilling success into cash flow via trucking and railing on the recently completed Alice Springs to Port Darwin to market for oil.

Further Information on the BOC (Helium) Memorandum of Understanding

The full contents of the BOC Memorandum of Understanding are confidential between the Company and BOC and the summary below is the only authorised publication. The BOC Group is one of the worlds largest international producers and marketers of helium with a 2004 gross turnover and profit of some $9 billion and $1 billion respectively and has recently commissioned the construction of a helium extraction plant in Darwin aimed at the domestic and export markets.

The most recent available figures for global helium demand for 2009 stand at about 6.0 BCF which sold for prices ranging up to USD$125-145 per thousand cubic feet of 99.999% pure grade A helium within the USA. There has been a significant drawdown in helium in storage in the USA of about 6 BCF total from 1999 to 2003 inclusive. Helium demand on a global basis has grown at about 5-6% per annum for the last 10 years and total projected demand by 2020 is anticipated to be as high as 20 BCF per annum.

Helium is regarded as a valuable commodity and has many specialised uses:

  • widely used as an inert gas shield for arc welding
  • in the production of printed circuit and silicon chip wafers in the mass electronics production industry
  • medical scanning devices such as MRIs
  • high speed push gas inside air to air missiles for guidance corrections
  • protective gas in growing silicon and germanium crystals, and in titanium and zirconium production
  • cooling medium for fourth generation nuclear reactors: helium does not become radioactive
  • a mixture of helium and oxygen is used as an artificial atmosphere for deep sea divers
  • cryogenics and superconductivity
  • rare document preservation (i.e. Declaration of Independence)
  • as a gas for supersonic wind tunnels
  • pressurizing agent for liquid fuel rockets (inert so won’t react with other substances)
  • leak detection agent for extremely small leaks
  • nuclear detonation simulations (using conventional explosives)
  • isotopic dating by helium ratios (seawater, ocean beds, etc)
  • helium/neon lasers
  • helium cardio-pulmonary resuscitation pumps (heart surgery)
  • helium filled border patrol “AEROSTAT“ monitoring blimps

One of the prospects that Central plans to drill, the Mt Kitty Prospect, has potentially Undiscovered Gas Initially In Place (UGIIP) at “high“ estimate of up to 3.0 TCFG and the play type targeted by this prospect is regarded as being directly analogous to the Heavitree Quartzite play drilled at Magee No. 1 in 1992 which contained up to 6.3% helium on test which had been sealed effectively by salt of the Gillen Member of the Bitter Springs Formation. This means that the Mt Kitty Prospect may host up to over 175 billion cubic feet (BCF) of helium. Similar reasoning applied to the Magee Prospect gives a figure of up to 15 BCF in this smaller but better known prospect.

Many commercial extracts of helium from hydrocarbons take place with concentrations of only 0.3% or higher.