Central Petroleum To Begin East Coast Gas Sales Project With Incitec

  • Jan 03, 2019 AEDT
  • Team Kalkine
Central Petroleum To Begin East Coast Gas Sales Project With Incitec

As per ASX news dated 3rd January 2018, the oil & gas junior, Central Petroleum Limited (ASX: CTP) announced that its East Coast Gas Sales Agreement with industrial fertilizer & chemical producer, Incitec Pivot Limited (ASX: IPL), would commence on the 3rd January 2019 when the Northern Gas Pipeline (NGP) starts Commercial Operations.

The two parties entered into a 13-month contract earlier this year wherein Central will deliver at least 20 terajoules of gas per day to Incitec’s Gibson Island plant in Queensland, via the Northern Territory’s gas pipeline. The gas supply would be wholly sourced from Central’s existing reserves at its re-opened Palm Valley (100%) and Mereenie gas fields (50%). 

In addition, the company announced that the new Field Boost Compressor at Mereenie Facility Upgrade is successfully into production now. This signifies that all the processing and production equipment is accessible for gas delivery. The Mereenie Upgrade was delivered only eight months after ordering long-lead items, which is at least three months earlier than its schedule. This represents more anticipated gas sales this financial year. Central credits the achievement to all the stakeholders that have contributed to this result including Traditional Owners, Central Staff, and Project Contractors.

As per the company’s recent annual presentation to investors, it was successful in drilling West Mereenie and Palm Value 13 this year. It also revamped the Palm Valley gas field. On 13th November 2018, the company announced a 65% increase in 1P gas reserves and 37% in 2P. This was majorly attributable to additional production data and market access via NGP.

The company anticipates tripling of contracted gas sales based on GAP (Gas Acceleration Program) completion and NGP opening by Q4 CY2018. The quarter one plans for CY2019 includes PV13 tie-in and production testing, drilling Dukas in EP112, progressing high-value exploration targets and signing new agreements for 2020 gas supply. The company expects further asset acquisitions and value-added projects in the near term.

As per recently declared financial results, Central Petroleum reported 4,842 TJ natural gas production (an increase of 46% as compared to last year) and 105,619 BBL of oil (an increase of 5% as compared to the previous year). Sales revenue of the company increased massively by 41%, from $24.79 million in 2017 to $34.94 million in 2018. The underlying EBITDA increased from $0.32 million in 2017 to $2.21 million in 2018, representing a 591% increase. The company declared an increase of cash by 397% from $5.48 million last year to $27.22 million this year.

Over the past one-year, Central Petroleum’s stock has witnessed a strong performance growth of 64.89%. It offers a YTD return of 6.90% and a three-month return of 19.23% as on 2nd January 2019. The company’s shares are currently (2:12 PM AST) trading at AUD 0.155 with a market capitalization of AUD 110.05 million.


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