Brisbane, Mar 31, 2008 AEST (ABN Newswire) - Central Petroleum Limited (ASX: CTP)(PNK: CPTLF) - A general exploration rationale is presented to shareholders and a brief summary of progress to first drilling follows :
- Casing supplies for 4 conventional wells and 3 CBM wells have been secured and transport of initial supplies to the Alice Springs depot has commenced.
- Water well drilling for road making and drilling water has commenced and the first well reports good supplies of water at 1,200ft (375m).
- Excellent supplies of water for roadmaking have been obtained from North Bore by rejuvenating an existing station bore.
- An additional 70 km of 2D seismic is now planned along the already cleared rig access road to Blamore in the Pedirka Basin which will provide additional seismic coverage for both conventional and CBM exploration. This will be tied to the existing Blamore grid.
- Terex Seismic have been mobilised to the Pedirka Basin for seismic acquisition
- Terex Contracting have now completed 70 line km of line clearing on the Guinevere and Vivienne oil prospects in EP 93
- The first well, Blamore 1 is still planned to spud on the 25th April 2008 as previously announced.
- Processing of newly acquired seismic over the Johnstone, Surprise and Stuart oil prospects in EP 115 is almost complete and is of excellent quality giving further encouragement to exploration drilling proposals.
- Inspection of Hunt Drilling Rig#2 has confirmed it is fit for purpose and a final detailed contract is expected to be signed imminently.
- The location of CBM93001 has been moved to a site on the already cleared Blamore access road and may be drilled in between the drilling of Blamore 1 and Simpson 1.
Exploration Philosophy - An Introduction
- The exploration philosophy of Central Petroleum Limited (Central) is based on the belief that its central Australian acreage is highly prospective and grossly underestimated in terms of its hydrocarbon potential. The Amadeus Basin for example, is a proven oil/gas producing basin, in production for over two decades yet has less than 1 well per 1.2 million acres
For nearly a decade, Central has pursued this philosophy with the acquisition of over 250,000 km2 of exploration holdings in central Australia in a mix of granted permits and applications.
Central's initial goal, tempered by land access issues and availability of relevant seismic, is to generate early cash flow by targeting oil and secondly gas/condensate and Helium production.
Gas is an important target for Central Petroleum. Its vision sees:
- The potential resource consumed as the feedstock for a proposed Gas to Liquids plant (GTL) in Alice Springs once a critical reserve base has been achieved.
- Enlarged financial returns with value added products (e.g. GTL diesel, jet fuel and naphtha) commanding a significant premium in the market compared with sales of natural gas.
- Significant upside from Helium: an unusually high proportion (6.2%) of the gas that flowed from the Magee 1 well drilled in 1992 was Helium which is currently commanding a price that is around 5 times that of natural gas.
Exploration Strategy
Central's strategy is to mitigate risk by conducting exploration in three geologically disparate terranes, all of which are denoted by more than one generative petroleum system with potential for multi-TCF gas reserves and oil fields some of which could be in excess of 20 MMbbls recoverable. Helium accumulations are seen to hold important commercial potential in the Amadeus Basin. Exploration activity in the basins listed below, in terms of seismic and drilling activity, has been at a standstill for the last 15 years prior to Central Petroleum's 2006-2007 seismic programme and its planned 2008 drilling and seismic campaigns.
1) The Amadeus Basin- a multiphase Neoproterozoic and Palaeozoic rift/foreland basin with current oil and gas production from the Mereenie and Palm Valley oil and gas fields, once Australia's largest onshore mainland oil and gas fields. Central's exploration approach targets conventional oil and gas production, Helium production, and unconventional oil and gas production. Proven Palaeozoic and Neoproterozoic petroleum systems are widespread.
2) The Pedirka-Simpson-Eromanga basins. (Commonly referred to collectively as the Pedirka Basin)- a complex series of vertically stacked, largely intracratonic basins, comprising 5 stacked basins; the Permian to Cretaceous sequences have many analogies with the Cooper - Eromanga Basin to the southeast. The main targets are conventional oil production and Coal Bed Methane (CBM). There is ample geochemical evidence of oil generative petroleum systems but drilling is extremely sparse. Occasional poor to fair oil shows have been recorded in the Jurassic, Triassic and Permian sequences and a breached oil pool occurs in the southern portion of the basin. There are very close analogies with the Cooper Basin to the south. It is thought that previous exploration success was thwarted by a misplaced focus on younger structures which appear to have been breached by Tertiary tectonism although there is abundant evidence of remnant oil and palaeo-oil columns.
3) The Georgina Basin/Wiso Basin-Lander Trough
In the Georgina Basin, a Palaeozoic carbonate ramp characterised by an extremely rich, oil prone, Middle Cambrian petroleum system. Numerous oil shows have been recorded. There has not been a test of a valid seismically defined trap in the basin and there has been no seismic or drilling activity in the last 15 years. There are many analogies with productive carbonate ramp systems in Oman.
In the Lander Trough of the Wiso Basin, stratigraphic drilling, sparse primitive seismic and remote sensing based mapping has adumbrated a province with evidence of sources, seals, reservoirs and structures which has never been drilled to an appropriate depth based on relevant seismic.
Seismic-Drilling Campaign 2008
In 2008, Central Petroleum, as Operator subject to funding and availability of appropriate plant and equipment, plans to:
- drill up to 10 exploration wells (7 conventionally targeted and 3 CBM wells).
- acquire c.1,150 km of 2D seismic in the Pedirka and Amadeus Basins.
Of the seven conventionally targeted wells:
- 2 target oil in the Pedirka Basin;
- 1 targets oil in the Amadeus Basin
- 2 target gas/condensate/Helium in the Amadeus Basin
- 2 target gas/condensate in the Amadeus Basin and: Three CBM wells are planned in the Pedirka Basin
A summary of firm wells :
Blamore-1: Ready to drill Oil Prospect in EP 93 (Pedirka/Eromanga Basin). Potential UOIIP 71 MMbbl. (in-house assessment Greg Ambrose)
Simpson-1: Ready to drill Oil Prospect in EP 97 (Pedirka/ Eromanga Basin). Potential UOIIP 190 MMbbl. (in-house assessment Greg Ambrose)
Ooraminna-2: Ready to drill Gas Prospect in EP 82 (Amadeus Basin). Potential UGIIP 1.9 TCF. NB The prospect is updip of known gas in Ooraminna-1 which lowers risk re this prospect. (Young 2005)
Mt Kitty-1: Ready to drill Gas/Helium Prospect in EP 125 (Amadeus Basin). Potential UGIIP 3.0 TCF, 185 BCF of Helium. (Young 2005)
Three CBM wells are planned in the Pedirka Basin subject to the availability of appropriate drilling equipment and timing/access issues (Total Pedirka Basin Prospective Recoverable Resources 34 TCFG low estimate to 70 TCFG high estimate
A summary of contingent wells :
Johnstone-1: Contingent Oil Prospect in EP 115. Well location awaits 2008 seismic results. Potential UOIIP 320 MMbbl) (Young 2005)
Waterhouse-1: Contingent Gas Prospect in EP 112. Contingent on the results of Ooraminna -2. Potential UGIIP 2.7 TCFG (Young 2005)
Magee-1: Contingent Gas/Helium Prospect in EP 82. Contingent on the results of 2008 seismic results. A small proven gas/Helium flow from Magee-1 lowers risk re this prospect. Potential UGIIP of 60 BCF and Helium 4 BCF. (Young 2005)
The planned drilling sequence is Blamore-1,Simpson-1, 3 coal bed methane wells, Mt Kitty, Ooraminna-2, Waterhouse 3, (depending on Ooraminna results and or desirability of Johnstone-1), Johnstone-1, (depending on 2008 seismic),and Magee-1 depending on 2008 seismic and results at Mt Kitty. It is possible, if new seismic is processed in time, the joint venture partners may decide to drill Johnstone-1 prior to the Amadeus gas wells, or Magee-1 prior to Mt Kitty.
Note: All petroleum and Helium quantities are Undiscovered Resources Initially in Place.-"high" estimate-SPE) and oil resource estimates quoted assume fill-to-spill status.
Gas resources and Johnstone oil resources are referenced from Young (2005) Unpublished Report, remainder of resource figures are from in-house assessments (Greg Ambrose) and refer to Undiscovered Original Oil or Gas in Place "high" estimate-SPE).
About Central Petroleum Limited
Central Petroleum Limited (
ASX:CTP) is a well-established, and emerging ASX-listed Australian oil and gas producer. In our short history, Central has grown to become the largest onshore gas producer in the Northern Territory (NT), supplying industrial customers and senior gas distributors in NT and the wider Australian east coast market.
Central is positioned to become a significant domestic energy supplier, with exploration and development plans across 180,000 km2 of tenements in Queensland and the Northern Territory, including some of Australia's largest known onshore conventional gas prospects. Central has also completed an MoU with Australian Gas Infrastructure Group (AGIG) to progress the proposed Amadeus to Moomba Gas Pipeline to a Final Investment Decision.
We are also seeking to develop the Range gas project, a new gas field located among proven CSG fields in the Surat Basin, Queensland with 135 PJ (net to Central) of development-pending 2C contingent resource.
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