It has been an eventful half-year for Central Petroluem who have been kicking their developmental goals and setting lofty exploration targets for the quarter ahead.
Most notably, the firm sold gas to the East Coast for the first time, a milestone which marks the pinnacle of a five-year effort to penetrate the market.
The firm acquired its first gas reserves in 2014 – the Palm Valley and Dingo gas fields – and later acquired the Mereenie Oil and gas field in 2015. Chief Operating Officer, Ross Evans, describes the sale of gas to the East Coast as a “significant inflection point” in the firm’s history.
The Gas Acceleration Program (GAP) has been a chief focus for the company, for the last two years. “It’s the largest project we have ever undertaken”, said Ross. The GAP was intended to maximise gas sales, after tapping into the East Coast market. “We successfully delivered this project on time and within budget; we were ready before the NGP was operational”, he added.
The firm is starting to reap the financial rewards of these endeavours and is looking forward to an exciting period of accelerated growth, as a new gas supplier for the East Coast. Daily gas sales volume increased by 193 percent, compared with the 2018 financial year. And the total sales volume over the quarter was 3.7 PJE, representing a 190 percent increase from the same quarter in 2018. “Importantly, the delivery of the GAP project allowed us to meet all of our sales obligations”, said Ross.
On the exploration side of the business, Central Petroleum is making headway with two of its most significant exploration activities. The Dukas-1 well is located approximately 175km south west of Alice Springs, and Ross describes it as an “incredibly exciting active exploration opportunity”.
“Santos, as Operator, obtained the approvals and commenced pad construction this quarter, and the well was spudded on April 16. It is anticipated to reach total depth by mid-CY2019”, said Ross. “Santos is carrying all of the cost of this well as part of the final phase of the farm-out in which they will earn a 70 percent interest in EP112”.
The Dukas gas prospect is a large, potentially game-changing, structure, which Ross says could have a multi-TCF potential (30 percent net to Central). As well as this, a number of similar prospective subsalt closures have been identified across the Southern Amadeus Basin. As such, success at Dukas-1 could potentially unlock a new hydrocarbon province in the Southern Amadeus Basin and become a new gas source for the East Coast market.
The second notable exploration project is the Range Gas Project on ATP 2031. The ATP is situated in the Eastern Surat Basin and is comprised of 77 square km of CSG acreage. Ross says that the project is currently underway and “progressing well”. “The drilling commenced in June 2019 , just ten months after the grant of the permit”, he said.
The company is engaged in a 50:50 joint venture with Incitec Pivot Queensland Gas Pty Ltd. Under this arrangement, Incitec will free carry the company and contribute up to $20million of the exploration costs.
Hear more from Ross Evans on the activities that are accelerating Central Petroleum’s penetration of the East Coast Gas Market, and what this means for the sector, at the SEAAOC 2019 Conference, as part of NT Resources Week.