The principal continuing activity of the consolidated entity ("the Group") during the period was the exploration, development and production of hydrocarbons.
Highlights for the half-year reporting period and up to the date of this report
Commentary and Outlook
- Operating revenue increased by 39.8% over the previous corresponding period from $12.6million to $17.7 million.
- Gas sales volumes increased 50.6% over the previous corresponding period, reflecting gas sold under the EDL NGD (NT) Pty Ltd ("EDL") Gas Supply Agreement ("GSA") which commenced in June 2017.
- Earnings before Interest, Taxes, Depreciation, Amortisation and Exploration Expenses ("EBITDAX") for the Producing Assets segment increased by 81.7% over the previous corresponding period from $4.8 million to $8.7 million.
- The Company successfully completed a fully underwritten institutional and sophisticated investor placement of shares and a fully underwritten traditional non-renounceable entitlement offer, at an issue price of A$0.10 per share, raising $25.5 million (net of costs).
- The consolidated entity held cash balances totalling $28.6 million at 31 December 2017.
- Testing of the Stairway Sandstone at Mereenie from the previously drilled West Mereenie 15 continued free flowing gas at sustainable rates with a low nitrogen content of 2.6%. Additional recompletion opportunities have been identified.
- Dr Sarah Ryan, Mr Martin Kriewaldt and Mr Tim Woodall joined the Central Board as independent Non-executive Directors as part of the Company's commitment to augment and strengthen the current Board.
This half-year reflects a full 6 months of gas delivered under the EDL GSA, with a pleasing continuation of prudent cost control leading to improved operating cash flow and profit performance.
The Company successfully completed an Equity Raising to support it Gas Acceleration Programme with the objective of substantially increasing its gas reserves in time to have delivery coincide with the Northern Gas Pipeline ("NGP") becoming operational in late 2018.
The various pipeline regulation reviews and reforms continue to take shape with several key reforms being implemented over the next year, including Day Ahead Auction, binding arbitration for non-scheme pipelines, and a review into the National Gas Laws for covered pipelines. Central remains optimistic that these reforms will put downward pressure on transportation costs and thereby facilitating our ability to sell new gas supply into the east coast market following commencement of the Northern Gas Pipeline later this year.
The Mereenie Joint Marketing Agreement ("JMA") between the Mereenie Joint Venture participants was announced on 25 September 2017 and remains subject to approval from the ACCC. We anticipate a decision from the ACCC could be made later this month.
Since the end of the current reporting period the Company announced it has signed a contract with Ensign Australia Pty Ltd for the forthcoming drilling programme of up to four wells, structured commercially as two required wells and an option for up to two further wells. Joint Venture approval of Mereenie wells is subject to ACCC interim clearance of joint marketing.
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About Central Petroleum Limited
Central Petroleum Limited (ASX:CTP) is an oil and gas explorer and producer listed on the Australian Securities Exchange focused on supplying the domestic gas market. Central is advancing several separate projects across what is regarded as the biggest package of proven and prospective oil and gas acreage across central Australia. This spread of assets gives Central multiple options for growth and development. 88% of this land being gas prone has led to the Company's focus on becoming a major domestic gas producer.
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