Brisbane, July 27, 2017 AEST (ABN Newswire) - Central Petroleum Limited (ASX:CTP) (OTCMKTS:CPTLF) provides the Company's Quarterly Activities Report for the Quarter ended 30 June 2017.

HIGHLIGHTS

- On 26 April 2017 Central announced the signing of a Gas Supply Agreement with EDL NGD (NT)Pty Ltd ("EDL") to supply 9.85PJ of gas over five years to the Northern Territory Pine Creek PowerStation operated by EDL.

- Delivery of gas to Pine Creek under the EDL GSA commenced on 1 June 2017.

- A Scheme Meeting of Shareholders was held on 29 June 2017 to vote on a Scheme of Arrangement ("Scheme") between Central and Macquarie with the required majority of 75% of shares votednot being met falling short by under 7% (68% of shares voted in Favour) and the Scheme voteddown.

- Testing of the Stairway Sandstone at Mereenie from the previously drilled West Mereenie 15continues free flowing gas at sustainable rates with a low nitrogen content of 2.6%. Additionalrecompletion opportunities have been identified.

- Commenced Palm Valley fracture modelling to ascertain development well infill drillingopportunities.

- Cash balance at the end of the quarter was $5.5 million.

- A webinar presentation will be delivered by the Managing Director on Monday, 31 July 2017commencing at 11am to discuss the quarterly review. Participants wishing to attend this webinar will need to register using the following link http://app.livestorm.co/central-petroleum-limited/ctp

MANAGING DIRECTOR'S REPORT TO SHAREHOLDERS FOR THE QUARTER

The last quarter has been a period of immense activity and achievement as the Company continued to implement its gas strategy first articulated in 2013. At Dingo, the Company completed the engineering for a new TEG unit at Brewers Estate and, with budgeting approval in place, this is now out for tender. The commissioning of the new TEG unit is designed to coincide with the commissioning of the upgraded Owen Springs Power Station and will further automate operations. It has been designed with a view to accommodate anticipated success of drilling at Ooraminna scheduled for early next year.

The modelling of the natural fractures at Mereenie, based on over 60 data points, and the Stairway in particular has now been completed and two drilling locations have been selected. We know that low nitrogen gas exists in the Stairway and has a potential gross 2P target of 95-160 BCF (110-185PJ). Subject to joint venture approval and funding, a two well horizontal drilling programme designed to intersect the natural fractures is now ready for execution.

Similar modelling has now commenced for Palm Valley and should be completed by the end of this coming quarter. Preliminary estimates indicate that a horizontal well, which intersects the natural fractures in the existing production area, could add an incremental gross 2P Reserves of 75-150 BCF (83-165 PJ). This should be drill-ready by the fourth quarter.

At Ooraminna, Central has a commitment well which must be spudded by April next year if the Retention Licence is to be retained. RISC, in the recent Scheme of Arrangement ("SOA") documents, gave a Contingent Resources EUR of 81-144 PJ. The fracture modelling is close to being completed and this well should be drill-ready by the fourth quarter.

The Company was able to announce the Gas Sales Agreement ("GSA") with EDL in May and the first gas was delivered under this GSA in June. As the cash flow from those sales was not received until July, this has had no impact on our quarterly cash flow. Going forward this GSA will make the Company unambiguously cash flow positive until commencement of the Northern Gas Pipeline ("NGP").

Under the interim Gas Balancing Agreement ("GBA") negotiated when Santos was our Mereenie joint venturer, the EDL sales was the last GSA out of Mereenie that could be unilaterally negotiated by Central. Now that Macquarie is our joint venturer, it is a priority to enter into a marketing agreement with Macquarie that will enable further GSA's to be consummated. Given the good relations that have been maintained with Macquarie, the Company is confident that this complexity will be resolved sooner rather than later.

During the quarter, the Company continued to allocate a significant amount of management's time to the twin issues of pipeline tariff reform and the NT Fraccing Inquiry. The final GMRG recommendations on non-scheme pipelines were more favourable than its interim recommendations. The interim report by Justice Pepper continues to exclude the operations of Central.

Notwithstanding the impressive progress made on our fundamental business, the quarter was dominated by the Macquarie SOA. In a vote, at which over 64% of shareholders voted, this SOA was defeated by a narrow margin 68% in favour with 32% against. As can be seen by my earlier commentary, the Company's progress was not materially hampered by the SOA.

Out of the SOA two major benefits accrued, namely:

1.a fully informed and reputable company valued the Company at over 20 cents per share; and

2.an Independent Expert, taking into account a $42 million capital requirement, valued theCompany shares in the range of 15 to 20.5 cents per share on a controlling interest basis.

Under both these matrixes the Company's shares remain significantly undervalued leading over time to a pathway to share price accretion once shareholder instability subsides.

On 19 July 2017, an extraordinary general meeting ("EGM") was requisitioned under Section 249D to replace the Board. The Board sought a mandate from its shareholders at that meeting to:

1. implement a capital raising strategy aimed at a low-risk drilling programme with the objective of potentially tripling our gas reserves by the time the NGP becomes operational;

2. negotiate a mutually acceptable pathway with our Mereenie joint venturer, Macquarie, to effectively commercialise the Mereenie gas reserves; and

3. put in the necessary corporate effort to facilitate the nationally necessary pipeline reforms focussing on tariffs and capacity.

The vote at the EGM gave the board the mandate sought. At that meeting 64% of the vote confirmed the board, with 53% of total shares on issue voting.

Now is the time for the Company to heal so that management can concentrate on the externalities necessary to increase shareholder value. An exciting future awaits.

To view the full report, please visit:
http://abnnewswire.net/lnk/8P414Z8U


About Central Petroleum Limited

Central Petroleum LimitedCentral Petroleum Limited (ASX:CTP) (OTCMKTS:CPTLF) 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.

 


Contact

Central Petroleum Limited
T: +61-7-3181-3800
F: +61-7-3181-3855
E: info@centralpetroleum.com.au
WWW: www.centralpetroleum.com.au

Media Enquiries
Martin Debelle at Citadel-MAGNUS
T: +61-2-8234-0100
M: +61-409-911-189



Related Companies

Central Petroleum Limited      

ABN Newswire This Page Viewed:  (Last 7 Days: 19) (Last 30 Days: 96) (Since Published: 1495) 
ANALYTICS: LOGIN HERE

Central Petroleum Limited NEWS: RECENT VISITS (10477)

Social Media