Central Petroleum Ltd

Johnstone West 1 (EP 115) spudded 19 August, targeting up to 500 MMbbl oil high estimate (fully risked mean 32 MMbbl). Central also says preliminary advice shows little chance of significant CSG in the Pedirka wells, and plans a four-well coal stratigraphic programme in 4-8 weeks, favouring UCG/coal-to-liquids.

drilling spud

Merlin can earn 80% of Rawson's oil-prospective Pellinor Block in EP 97 (Pedirka Basin) by funding 100km of 2D seismic and one well; c.38km already acquired counts. Adds about 1,400 km2 of ground. Subject to the NT renewing EP 97, which expires 14 February 2011.

farm in farm out agreement

Ooraminna 2's acid squeeze lifted gas flow only from 142 to 152 Mcf/d, and the well will be plugged and abandoned. Logs show no significant natural fractures, so any development would need tight-gas methods like horizontal drilling or fracing. The rig moves to Johnstone West 1. Central now holds 100% of EP 82.

well test result

Central and Red Sky settled the farm-in dispute: Red Sky withdraws from all permits and returns its interests for an undisclosed sum, and the farmout agreement ends. This resolves the default-notice thread from 5 July and leaves Central free to seek other partners, per its MD.

farm in farm out completion

A flow-line test of the Pioneer Sandstone (1,261-1,302m) in Ooraminna 2 showed gas-saturated rock flowing about 190 Mcf/d with no water, versus 12 Mcfd in Ooraminna 1 (1963). No gas-water contact reached; drilling continues to 1,770m, and fracing or acid treatment could lift flows.

flow test result

Central has sent default notices to Red Sky for about $1.9m of unpaid cash calls, or about $3.8m in farm-out costs. Central still intends to finish Ooraminna 2 and Johnstone West 1, and drill Magee 2 if new seismic supports it. With PXA gone, Central's EP 82 stake is 90%.

debt default or forbearance

Central settled its cash-call dispute with PXA: PXA pays $4.25m and withdraws from the joint ventures, returning all its interests. This ends the arbitration and resolves the PXA thread, though PXA's share of the $13.23m unpaid calls is evidently settled for less.

farm in farm out completion

Ooraminna 2 (EP 82, up to 2 TCFG high estimate) spudded on 11 June, about 26 days planned to 1,770m TD. It targets the Pioneer Sandstone, poorly tested by Ooraminna 1 in 1963, and is the first of a planned 3-4 well 2010 programme.

drilling spud

CBM93-002 reached 1,044m TD on 7 June, intersecting just over 110m of cumulative coal in seams over 1m thick. It was the final well of the five-well 2009/10 CSG programme and is being plugged and abandoned, with further coal stratigraphic drilling under consideration.

drilling result

CBM107-002 reached 604m TD with 65m of cumulative coal, including 16m and 20m seams, at a 38 km updip stepout from CBM107-001 (130m of coal). Gas content is untested: desorption tests are pending, and a Netherland Sewell review may take 6-8 weeks after the last well.

drilling result

Central signed a drilling contract with Century Energy Services for up to 6 conventional NT wells in 2010. Rig mobilisation starts 17 May, and Ooraminna 2 (EP 82, up to 2 TCFG high estimate) will spud by 31 May, firming up the slipped mid-May target.

contract award

Central's rights issue raised $22.7m at 7.5c, with shareholders taking up 59% (178.5m shares). Underwriter Patersons will place the roughly $9.03m shortfall. Central says this funds Phase One and at least three conventional wells in 2010, despite JV disputes.

capital raising announcement

Central releases a consultants' report saying low-volume helium extraction could be commercial if enough gas is found: about $420m capex for a 20m cubic feet/day plant, NPV $111m-$556m at 8%. Magee 2 is conditionally planned for 2010. Depends on discovery.

other

Central launches a fully underwritten renounceable rights issue raising $22.6m: one new share for every two held at 7.5 cents, with a free 16c option per five new shares. Patersons underwrites. Cash would reach about $50m; Ooraminna 2 is due to spud in late April/May.

capital raising announcement

Red Sky says it will keep funding cash calls for the Pedirka coal seam gas wells in EP 93 and EP 107. It elects not to earn its 10% in a number of permits outside the Pedirka Basin, narrowing the 30 September 2009 Broadacre farm-in, which was in dispute with Central.

farm in farm out agreement

At Central's request, its shares and options are suspended from 12 March 2010 pending a material capital raising announcement. The suspension runs to the announcement or 16 March at the latest.

listing compliance notice

PXA demands Central withdraw its default notices and has started arbitration disputing the notices, the 2010 budget and cash calls. Central holds its position and issues a letter of intent for MB Century Rig 7 (two firm wells plus four options), starting as early as mid-April.

joint venture update

Central issues default notices to several JV partners over about $3.2m of unpaid cash calls (about $6.2m of farm-out costs in total). It says 2010 works budgets of $17.7m gross are deemed approved, and it will drill Ooraminna 2 and Johnstone 1 regardless, with the first spud by mid-April.

joint venture update

CBM107-001 reached 1,251m TD with 120m of coal in seams over 1m, against a prognosis of 20-40m, as in the earlier Pedirka wells (138m and 144m). Central says coal may need remapping, possibly lifting its coal exploration target. Results are preliminary.

drilling result

Central formally notifies the NT Government of a coal discovery in EP 93, citing 144m of coal at CBM93004 and 143m at CBM93001. It says the coal appears widespread and could suit CSG, gas-to-liquids or underground coal gasification projects. No volumes or commercial resource are stated.

regulatory community update

CBM93004 reached 978m total depth with about 144m of coal in seams over 1m, versus 138m at CBM93001, showing coal continues updip without thinning. Gas results were fair to excellent, no oil or sandstone gas found. Rig moves to CBM93003, spud due 7 Jan.

drilling result

Red Sky said it reached further agreement with PXA, resolving the dispute over its 10% farm-in of 30 September 2009 across Central's permits. Red Sky would fund up to 20% of the first three conventional wells and 20% of the first $3m of seismic per permit, as a right rather than an obligation.

joint venture update

Central spudded CBM93004, the first of five fully cored coal seam gas wells, in EP 93 about 9 km updip of CBM93001, which found over 140m of net coal in 2008. It targets Permian Purni coals prognosed from 550m, with 80-90m of net coal and a planned depth of 1,020m.

drilling spud

Central signs Wallis Drilling to drill five fully cored coal seam gas wells in the Pedirka Basin over about five months, first spud due first week of December. A 1,350 km seismic contract with Terrex was also signed. Phase One 2009 programme valued at A$32m.

contract award

Central submits a minimum work programme that it says is deemed unanimously approved under the JOA. It will contract Wallis Drilling for 5 cored coal seam gas wells and Terrex for 1,380 line km of seismic. PXA dispute talks continue to at least 6 November.

drilling scheduled

Great Southern Gas exercises its pre-emptive right over the EIR offer on EPA 130, on the same terms. If completed, GSG holds 45% and Central 55%, GSG funding the initial work. It still needs a formal farmout agreement. This replaces the EIR deal.

farm in farm out agreement

Central's board resolves to issue a notice of dispute against PXA over the unsigned deeds. PXA hopes to reply by 21 October. Central sees outcomes as Red Sky proceeding, being blocked, or PXA pre-empting; delays may continue.

joint venture update

PXA has not signed the deeds of assumption needed for Red Sky to join, despite Central's 14 October deadline. Central warns the programme may be delayed, the Ooraminna 2 rig is no longer available, and permit standing could be at risk.

joint venture update

Red Sky Energy signs a farmout to take at least 10% of 27 Central permits, funding 20% of the first three wells and first $3m of seismic per permit. It pays a $5m reserve premium per trillion cubic feet of 3P reserves. Excludes EP 97, Magee and Mt Kitty.

farm in farm out agreement

ASX queries a price rise from $0.088 to $0.17 over twenty trading days. Central attributes it to nothing unannounced except the 22 September grant of mineral exploration licences covering about 14,750 sq km of coal-bearing Pedirka Basin, following its earlier coal applications.

price query

Central signs a non-binding term sheet for EIR to earn 25% of EPA 130, cutting Central to 55%. EIR funds 60% of initial work and pays $10m per TCF of 3P reserves. Subject to board approval of a formal farmout.

farm in farm out agreement

The rights issue succeeded, raising about $25.7m at 10c, plus a roughly $5m placement at the same price and options, for over $30m total. Central says it is fully funded for its share of the 2009-10 programme starting August/September.

capital raising announcement

Seismic remapping lifts the Johnstone oil prospect (EP 115) to up to 998 MMbbls undiscovered oil in place, 669 MMbbls in the Pacoota Sandstone, over three times earlier. Company estimate, untested; Johnstone-1 is planned for the second half of 2009, subject to partner approval.

resource reserve update

By consent, the Federal Court sets aside the Central Land Council's December 2007 refusal on EPA 92, with costs to Central, reviving that application. EPA 147 was refused on 29 May; Central is considering legal options. EPA 152 and 162 are being resubmitted.

regulatory community update

After airborne gravity work over SPA 7/04-5, Central applies for three Western Australian exploration permits totalling 14,000 km2, its first move into WA. Applications may not be granted; any spending needs partner consent. Central says several Amadeus-style play types were identified.

regulatory community update

Central amends its convertible bond facility with Asia Convertible Bond Opportunities, lowering the floor price (below which no bonds issue; shares had been under the old 15c floor since September 2008) to 80% of 21-day VWAP. The remaining $74m facility needs shareholder approval around June 2009.

debt financing

Central announces a 1-for-1 renounceable rights issue at 10c, raising up to $25.7m (257,013,526 shares), with a free $0.16 option (expiring 2014) per two shares taken up. Funds are for exploration with JV partners and acquisition opportunities. Not underwritten.

capital raising announcement

A commissioned independent report put the Pedirka Basin coal 'Exploration Target' at 0.6-1.3 trillion tonnes above 1,000m and 1.5-2.1 trillion tonnes in total. It built on the 2008 coal finds in EP 93 but is not a JORC resource, as there has not been enough drilling.

resource reserve update

Trident takes a second farm-in, over application EPA 111 (9,000 km2, next to Mereenie), alongside EP 115. It funds 20% of the first three wells and $3m of seismic on each permit to earn 10% of each. The EPA 111 share is subject to permit grant.

farm in farm out agreement

Trident Energy paid Central $550,000 as the first step to earn 10% of EP 115 (including the Johnstone prospect, up to 320 MMbbl), and will fund 20% of the first three wells and the first $3m of seismic. This firms up the Trident talks flagged earlier.

farm in farm out agreement

Managing Director John Heugh's term is extended five years, from March 2010 to March 2015. The chairman calls it a signal of the company's growth strategy.

director officer appointment

PXA's sale to QGC pays out over $18m gross, about $0.18 per PXA share. PXA keeps up to 20% of Central's permits by funding 40% of the first $3m seismic and first 3 wells per permit. Fully funded, this is about $170m.

joint venture update

PXA, Central's 15% Simpson partner and broadacre joint venture partner, has been sold to QGC (Exploration) and its directors replaced. Drilling and seismic stay suspended until the wet season ends.

joint venture update

Central formally notified the NT Government of a coal discovery in EP 93, with over 100m of coal in each of Blamore 1 and CBM93001. It says seismic suggests coal across about 9,000 km2. Extent and commercial potential are still unappraised.

regulatory community update

Simpson 1 is plugged and abandoned at 2,165m after no significant hydrocarbons were found, so the well targeting up to 190 MMbbl is a dry hole. Partner talks may influence the rest of the program.

drilling result

Simpson 1 spudded on 1 October, c.100km southeast of CBM93001, targeting up to 190 MMbbls (high-case) oil. The spud was delayed from 27 September by a sandstorm and a contractor equipment failure. Farm-in talks continue with potential partners, and the program could change.

drilling spud

CBM93001 finished at 1,266m with up to 140m of coal over 0.2m thick and a single bed near 30m. Central says Blamore 1's coal package, c.50km away, has not thinned appreciably. Well to be suspended as a potential producer. Simpson 1 is next, spud expected by end September.

drilling result

CBM93001 reached about 1,265m total depth, past the planned c.1,200m, with high connection gas of 172 units and an aquifer flow near 1,218m. Both drill stem tests showed strong blows. The well is to be logged and completed as a potential CBM gas producer.

drilling result

DST #2 on CBM93001 began with a very strong blow over 973-1007m, a thick coal that gave 132 units of gas while coring. About 75m of coal has been seen in total. Central admits progress was slowed by coal volume and contractor deficiencies.

well test result

CBM93001 cored a coal at 977-981m with gas peaking at 132 units, about 22 times background, the strongest gas yet in the well. Central calls the preliminary results quite positive for its CBM programme. DST #2 is expected soon.

drilling result

Central outlines the Madigan Prospect, straddling EP 93 and the EP 97 Simpson block, with up to c.500 MMbbls oil in place (high, unrisked estimate). It may be drilled after Simpson 1 if that succeeds. Deeper targets may exceed the contracted rig's capacity.

resource reserve update

Central reports a new Devonian carbonate play in the Warburton Basin below EP 97, with Erec and Lucan prospects having combined potential above about 5 billion barrels oil equivalent (unrisked, high estimate). Simpson 1 will test the top of the Erec prospect. Interests are projected at 65% Central, 20% Rawson and 15% PXA.

resource reserve update

An unnamed third party will fund the Blamore 1 drill stem test costs, about $600,000 (final cost not yet set). In return it gets the well results and an exclusive option to 6 October 2008 to negotiate a farm-in over some or all of Central's acreage plus a share issue. No terms agreed.

material agreement

Blamore 1 was plugged and abandoned short of its planned 2,500m total depth after long-running hole problems and equipment faults prevented drill stem testing. It found a 15m residual oil column and up to 160m net coal. Rig 2 moved to CBM93001, and a redrill remained an option.

drilling result

Preliminary log interpretation shows Blamore 1 net Permian coal of slightly over 160m, about four times the thickness expected, with gases from methane to pentane. This lifts the CBM case in the Pedirka Basin. CBM93001 is the next well.

drilling result

Blamore 1 is spudding: the 16-inch conductor is set and the main hole section is imminent. This is the first well of Central's 2008 programme, after repeated delays, and the first conventional oil well drilled in the Pedirka in about 15 years.

drilling spud

The 1-for-5 rights issue closed 6 June with shareholders taking up 78%: 31,090,865 shares at 15 cents, raising $4.67m. The 8,982,070-share shortfall may be placed by directors within three months, so it falls short of the $6.01m maximum.

capital raising announcement

A re-assessment of old seismic identifies the Hector Trend in the Pedirka Basin: four large leads (450 km2) with up to 2,098 MMbbl undiscovered oil in place at the 'high' estimate. These are unmapped-to-drill-ready leads, not drilled results; more seismic is probably needed.

resource reserve update

Subsidiary Merlin West was awarded Special Prospecting Authority 7/04-5, covering 30,000 km2 of the western Amadeus Basin for an aerogravity survey, valid to 15 November 2008. This resolves the pending grant; results will guide which areas are applied for as licences.

regulatory community update

PXA formalised a farm-in to Merlin's EP 97 Simpson, Bejah and Dune blocks: it funds 22.5% of Madigan seismic and of one well per block, to keep 15% of each block. Simpson 1 is mandatory. Drilling is now expected by end May, later than planned.

farm in farm out agreement

Letter to shareholders on the 1-for-5 non-renounceable rights issue at 15 cents, announced 6 May, record date 16 May. It raises up to $5.81m (38.7m shares) and is the planned offset to bond dilution; 11.3m shares had been issued to D.B. Zwirn.

capital raising announcement

Central signed a binding contract with Hunt Energy for Rig 2 to drill Blamore 1 and Simpson 1, with options for three CBM wells and Mt Kitty, Ooraminna and other wells. The rig is due from the Cooper Basin within weeks, which resolves the open rig-contract thread.

contract award

Central drew down the first $1m tranche of convertible notes from D.B. Zwirn under the bond facility shareholders approved in December 2007 (up to $80m in $1m tranches). Heugh says the funds underpin the 2008 drilling programme.

debt financing

First joint venture committee with PXA and He Nuclear approved a $31m budget for the 2008 programme, with partners funding about $13m and Central about $18m. Central cites about $14m cash, plans about $7m more, with the first well late April.

joint venture update

Central signed the formal farmout and joint operating agreements with PXA, converting the May 2007 MoU. PXA funds 40% of seismic (up to $3m per permit) and of up to three wells per permit, earning up to 20%. 2008 plan: 4 conventional wells, 3 CBM wells.

farm in farm out completion

Central ended negotiations with Advent Energy on a farmin, after the 2007 MoU. A PXA farmin is expected to be signed within a week, funding 40% of up to $3m seismic and 3 wells per permit. DB Zwirn bond drawdown expected late February or March; first well April.

farm in farm out agreement

Shareholders approved the bond issue under the DB Zwirn subscription agreement on a show of hands (27.4m for, 16.1m against). The meeting was adjourned to 11 January 2008 to consider Resolution 2, the loan shares.

material agreement

Central says up to 1,153 km of 2D seismic has started in the Amadeus and Pedirka/Eromanga Basins. The 2008 drilling plan has two firm wells (Blamore or Simpson, and Mt Kitty 1), with up to 5 more and 3 coal bed methane wells contingent on bond approval and a farmout. Blamore and Simpson oil-in-place estimates were raised to 81 and 161 MMbbl (high).

drilling scheduled

Central reached agreement with the Central Land Council on a dry-weather access route into the Pedirka Basin, with sacred site clearances for Blamore 1 and Simpson 1. This resolves the long-running road access blockage; Blamore targets 40 million barrels, Simpson 69 million (best estimate).

regulatory community update

Central signed a binding letter of intent, subject to contract and inspection, to use Hunt Rig 2 from March-April 2008 for at least 2 wells. Up to 5 more wells and 3 coal bed methane wells are optional, dependent on bond approval and farmouts.

contract award

Central signed a Bond Subscription Agreement with D.B. Zwirn for up to $80m of convertible zero-coupon bonds in $1m tranches over up to five years. It needs shareholder approval at a 21 December general meeting, held with the AGM. Conversion would dilute shareholders.

debt financing

The Pmere Nyente Land Trust voted unanimously to ask the CLC to finalise a road lease east of the Colson Track to EP 93 and EP 97 by 31 December 2007. This could end the access blockage, but the CLC did not attend and has not yet agreed.

regulatory community update

The Rawson MoU became a formal farmin agreement on 26 October. Merlin funds 100 km of seismic and one well per block to hold 80% of the Simpson, Bejah and Dune blocks (best estimate 260 mmbbls). Subject to Central Land Council road access and reasonable road costs.

farm in farm out agreement

With EPs 105-107 granted, Central will complete the purchase: $375k of shares plus a further $1m after a year of production and a 1.5% production bonus. It adds about 27,000 km2 of granted ground, bringing Central's granted permits to nine.

asset acquisition disposition

Central's subsidiary Merlin was named preferred tenderer for three Queensland Georgina Basin permits (ATPs 909, 911, 912, c.14,000 km2). This gives it priority to apply for grant, and the permits complement its NT application EP(A) 132 in the same basin.

asset acquisition disposition

EP 115 (about 13,000 km2) was formally granted, resolving the pending grant. It hosts the Johnstone prospect (up to 112 MMbbl) and a new large Wells prospect. A 200 km seismic programme is planned; first drilling is contingent for Q4 2007, with Johnstone in mid to late 2008.

regulatory community update

Central's subsidiary Merlin signed a non-binding MoU with Rawson Resources to fund up to 3 wells and 100 km of seismic in EP 97 (Pedirka Basin) to earn 80% and operatorship of three prospect blocks. Targets 256 million barrels 'best' estimate; subject to due diligence and board approvals.

farm in farm out agreement

Central completed the option underwriting and placement, raising $9,007,650 before costs, with a further 39.07m shares allotted and 3m options issued to Martin Place. Prospectuses for the option entitlement offer have been despatched; it closes 17 August.

capital raising announcement

Central will place about 5.5m extra shares at 20c, raising $1.1m and bringing the total from option conversion and placement to $9.0m before costs. 3m 25c options go to Martin Place as fees. 5.96m shares went to option holders.

capital raising announcement

The underwriter fully placed the expired 20c options: about 39.53m shares raising $7.9m before costs, of which 5.98m options were exercised by holders for $1.19m. Cash was $5.3m at 31 March; this is a further c.$7.6m boost.

capital raising announcement

Central signed a non-binding MoU with unlisted Trident Energy over EPA 115 (not yet granted): Trident funds a $3m seismic programme and three wells at the 20% level to earn 10%. Central keeps 50% and operatorship, with a stated 100% free carry.

farm in farm out agreement

Preliminary seismic interpretation suggests a possibly very large structure, approaching 400 km2, at Mt Kitty with a roughly 100m thick Heavitree target. Depth conversion is pending and final mapping is due within weeks. This is an early, unconfirmed result, not a discovery.

drilling result

A technical note by Greg Ambrose estimates the Horn Valley Siltstone in the Amadeus Basin holds 12, 67 and 90 TCF of gas in place (low/best/high) as an unconventional play. Central puts total unconventional prospective resources at 160 TCF (best). Unproven, never tested.

resource reserve update

Central awarded IP Services (Australasia) a project management contract for its first three-well programme, planned for late 2007: Blamore-1, Mt Kitty-1 and Ooraminna-2. Blamore and Avalon still depend on approval to use an existing road.

contract award

Central agreed commercial terms in an MoU with Advent Energy, backed by MEC Resources. It covers all 18 permits, with up to 54 wells and $54m of seismic at the 40% promoted level for a 20% interest. With PXA, Central would fund only 20% and keep operatorship. Not yet binding.

farm in farm out agreement

Central signed a conditional underwriting agreement with Martin Place Securities guaranteeing exercise of at least 20m of its 39.4m 20c options, raising $4m (up to $7.9m if all convert). This firms up the earlier letter of intent; cash was $5.3m at 31 March.

capital raising announcement

A Mulready report adds 25 TCF of coal bed methane gas in place in EPAs 105-107. Recoverable prospective resources across seven Pedirka permits rise to 34, 47 and 70 TCF. The company sees no immediate sales gas market. These are unproven prospective resources.

resource reserve update

Martin Place Securities intends to underwrite conversion of at least 20m of about 39.5m options at 20c expiring 30 June 2007, up to $7.9m if all convert. A July non-renounceable issue of one 25c option per two shares at 2.5c is planned. Only letters of intent exist.

capital raising announcement

Central signs an MoU with Petroleum Exploration Australia (PXA), chaired by Barry Dawes. PXA would fund 40% of up to $3m of seismic per permit area and 40% of drilling for a 20% interest in each permit. Detailed agreements are targeted for end June; it is not yet binding.

farm in farm out agreement

Independent reports estimate Pedirka Basin coal bed methane prospective resources of 25 TCF low, 35 TCF best and 50 TCF high, for a notional Alice Springs gas-to-liquids plant. These are unproven prospective resources, not reserves. Scout drilling is the proposed next step.

resource reserve update

Central agreed, conditional on permit grant, to buy EPAs 105, 106 and 107 from Traditional Oil, adding about 27,000 km2 between EP 82 and EP 93. Price is $100,000 cash plus $375,000 of Central shares, $1 million after commercial production starts, and a 1.25% royalty. It opens a coal bed methane angle.

asset acquisition disposition

The He Nuclear MoU became a formal farm-out agreement. He Nuclear funds A$5 million of a roughly A$10 million programme (seismic plus a well each at Mt Kitty and Magee) to earn 25% of each prospect. This resolves the MoU thread and delivers Central's first signed farm-out.

farm in farm out agreement

Central signed a non-binding MoU with He Nuclear for a helium-focused farm-out of Mt Kitty (EP 125) and Magee (EP 82). He Nuclear would fund 50% of seismic and a well on each to earn 25%. Mt Kitty's high case is 1.7 TCF gas with over 100 BCF helium. This is a first farm-out after White Sands fell through.

farm in farm out agreement

The Heads of Agreement for White Sands Petroleum to farm into EPA 92, PELA 77 and EP 93 has been terminated, citing uncertainty over White Sands' drilling rig availability. Central's first farm-in prospect therefore falls away.

material agreement termination

Central Petroleum listed on the ASX after an IPO raising over $10.6 million (minimum was $9.5 million), with over 650 shareholders. It plans two initial wells in the Pedirka and Amadeus Basins; a six-well programme depends on further capital or farm-outs.

capital raising announcement