Central Petroleum (ASX: CTP) holds an extensive package of prospective acreage of over 270,000 km2 in central Australia, which is predominately in the Pedirka Basin, along with 25,000 km2 in the Southern Georgina Basin.
Apart from conventional gas potential, the company has had independent estimates of over 10,000 trillion cubic feet in UCG "syngas" prospective recoverable resources.
Central Petroleum (ASX: CTP) has confirmed that it has received an unprecedented amount of genuine interest from potential farm-in partners for its massive acreage across central Australia and is currently carrying out several negotiations.
Company chairman Dr Henry Askin said in a letter to shareholders that while it was eager to finalise farm-in agreements for some of its acreage, it would not proceed with any agreement that undervalued its potential.
It added that this potential was now being recognised by the international oil and gas industry following the Surprise oil discovery in the Amadeus Basin, Northern Territory and that the size of its acreage meant that it was well placed to capitalise on current market opportunities.
Central had previously stated that it would accelerate and promote farm-in opportunities to spread and reduce risk.
Askin added the company is now planning to shoot 3D and 2D seismic over the Surprise structure in EP 115 from the middle of next month with processing of the 3D seismic expected to be completed by early August.
This will be followed by the start of the extended production test for the Surprise-1 well, which is also expected to occur in May.
The Surprise-1 horizontal well flowed light sweet crude at a maximum sustained rate of 380 barrels per day (bpd) with low water cut, marking the first major onshore oil flow in the Northern Territory in nearly 50 years.
It has served to validate Central's long-standing belief in the petroleum prospectivity of central Australia and upgrades the commercial oil potential of its large Western Amadeus Basin acreage.
At sustained production rates of about 300bpd, Surprise-1 could generate revenue of US$1.16 million (A$1.12 million) per month at current Tapis spot oil prices of about US$129 per barrel.
Further appraisal of the discovery would allow Central to delineate its extant and determine its productivity and resources present, which RPS Energy had previously placed at between 0.5 and 2 million barrels of in-place oil.
Central noted it was working on a 40 kilometre shortcut access road from the well to the main Kintore bypass road, which the company and the Northern Territory State Government were working on improving into an all weather road.
The company added the recent settlement of an A$11 million institutional placement meant it was funded through the planned appraisal work at Surprise as well as properly assessing and finalising ongoing farm-in discussions.
On the company’s dismissal of former managing director John Heugh, Askin said the decision was not taken lightly by the board and was only pursued after other options had been explored.
Central added that while it would vigorously defend itself against Heugh’s legal proceedings disputing the termination of his employment, its legal and company secretarial teams was handling this issue with very minimal interference on its normal exploration and development activities.
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