Central Petroleum Limited (ASX: CTP), based in Brisbane, Australia, is engaged in the development, production and commercialization of hydrocarbons across Australia. It holds interests in a couple of oil and gas properties in the Northern Territory at Palm Valley, Mereenie, and Dingo.
On 14th May 2019, the company released its March 2019 quarterly review, delivering a strong performance over the period. The exploration work at Dukas-1 well, progressed with spudding on 16th April 2019, and the total depth (~3,600 metres MD) is anticipated to be drilled by mid-2019, as notified by Santos, the operator of EP112 Joint Operations.
Previously, on 31st October 2018, Southern Amadeus Basin Joint Venture confirmed their intent to enter the final phase 3 of the EP112 farm-out consisting of one exploration well named as Dukas-1. Santos carries 100% of the cost of this well and has a 70% earning interest in the JV. Dukas-1 is located approximately 175 km south west of Alice Springs and is targeting a multi-TCF gas potential (30% net to Central).
Location map of Dukas-1 Well and EP112 (Source: Company’s Report)
Besides, the Mereenie Oil and Gas Field (OL4 and OL5) in Northern Territory, where CTP holds 50% interest, also operated successfully at significantly higher rates, since NGP commercial operations commenced on 3rd January 2019. After the initial commissioning period, the equipment installed during the recent facility upgrade has been operating reliably with high up-time. Gas production averaged 41.5 TJ/d (100% JV) over the quarter.
The second exciting exploration activity is also currently underway at the Range Gas Project - ATP 2031. The exploration program is progressing well, with the drilling of 5 wells anticipated to commence in Q2 CY2019. The ATP covers ~ 77 km2 of CSG acreage in the eastern Surat Basin. Incitec Pivot Queensland Gas Pty Ltd is in a 50:50 joint venture with CTP and it would free carry the company by contributing up to $ 20 million of the exploration programme costs for the initial exploration period.
Central Petroleum’s total production cost in the March quarter was 95% up on FY18 average reflecting higher sales.
The company’s total sales volume amounted to 3.7 PJE, a 190% increase over the prior corresponding March 2018 quarter. Around AUD 8.52 million of net cash inflow was generated from operating activities including Product and Take or pay receipts from customers (AUD 16.6 million) after payments for exploration & evaluation (AUD 1.3 million), production and gas purchases (AUD 8.33 million), staff costs, interest paid (AUD 1.62 million) and other expenses.
On the contrary, the investing activities led to net cash burns of ~ AUD 2.96 million on account of payments to acquire property, plant and equipment (AUD 2.9 million) and non-current assets (AUD 60 million).
Meanwhile, the Central Petroleum’s financing activities comprising proceeds from borrowings (AUD 7.5 million) generated net cash inflows of AUD 2.75 million after repayment of borrowings (AUD 4.75 million). The net cash and cash equivalents were around AUD 19.26 million at the end of the quarter.
Going forward, Central Petroleum aims to drive more value from producing assets by increased sales through Phase 2 expansion Mereenie, optimising field production and operations, increase pricing through 2020+ gas marketing and reduce operating costs / GJE.
With around 712.93 million outstanding shares, the CTP stock settled the day’s trading at a last price of AUD 0.135, up 3.846%.
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