Central continues exploration push in central Australia

Thursday, Feb 11, 2010

Central Petroleum Limited, as Operator, provides this update in respect to its wholly owned subsidiary companies in joint venture with various other participants. Central is continuing with the Phase One 2009/10 exploration programme of c.1,400 km of seismic across the breadth of its extensive holdings in central Australia’s Amadeus and Pedirka Basins and 5 cored Coal Seam Gas (CSG) wells targeting coal and CSG in the Pedirka Basin.

Ooraminna 2, within EP 82, (with participating interests of Helium Australia Pty Ltd - 70%, Petroleum Exploration Australia Ltd - 20% and Red Sky Energy (NT) Pty Ltd - 10%) is also planned to be drilled as part of the Phase One programme but will necessarily be drilled as part of a back to back campaign involving other conventional wells due to the relatively high mobilization and demobilization costs of drilling rigs to and from central Australia. Ooraminna 2 may host up to a “high” 2 TCFG of UGIIP and has flowed gas to the surface in a previous well, Ooraminna 1, drilled without the aid of seismic in 1963.

It is to be noted that both EP 82 (with a participating interests as referred above, excluding the Magee well location as referred below) and EP 115 (with participating interests of Frontier Oil & Gas Pty Ltd - 60%, Petroleum Exploration Australia Ltd - 20%, Trident Energy Ltd - 10% and Red Sky Energy (NT) Pty Ltd - 10%) each contain a 1 well commitment under the terms of the Northern Territory Department of Resources (DOR) permit tenure conditions. EP 97 has a 1 well farmin obligation to allow Central and its joint venture participant Petroleum Exploration Australia Limited (PXA) to retain their interests in the EP 97 farmin prospect blocks (with participating interest of Merlin Energy Pty Ltd – 65%, Rawson Resources Ltd – 20% and Petroleum Exploration Australia Ltd – 15%).

Ooraminna 2 within EP 82 and Johnstone 1 or a substitute oil well within EP 115 have been proposed by Central as wells to fulfill the DOR tenure conditions.

Seismic

The 1385km 2009/2010 Amadeus and Pedirka Basins Seismic Survey commenced with line surveying on Dec 7th 2009 in the Johnstone area of permit EP-115. To date approximately 40% of this line clearing phase of the survey has been completed.

After rain initially delayed seismic recording, this commenced on Jan 25th 2010 in EP-115, over the North West Mereenie prospect area which has now been completed. To date approximately 250 km of vibroseis data has been recorded. The crew is still recording in the Johnstone area of EP-115 and will move in an easterly direction. The survey will conclude in approximately four months time.

Objectives of this survey include the acquistition of additional control over prospective leads and semi mature prospects to enable maturation to drillable structures. Regional lines have also been programmed to reveal additional prospectivity. Central’s objective is also to acquire these data with a minimal footprint thereby minimising damage to native flora and fauna.

Conventional Drilling Targets

Central has called for expressions of interest from drilling contractors for the drilling of between 3 to 6 conventional wells commencing as soon as possible but dependent on the availability of appropriate equipment and joint venture deliberations.

The wells being considered by the Operator, Central are :

-       Johnstone 1 in EP 115, a very large oil prospect with potential to host over 300 MMbbls in UOIIP at “high” estimate. Other prospects in the permit under consideration are Surprise, Stuart and North-West Mereenie, all receiving additional seismic attention during the current acquisition programme.

-       Ooraminna 2 in EP 82, a 300 km2 surface anticline with potential to host up to 2 TCFG in UGIIP at “high” estimate.

-       Magee 2 in EP 82 (with participating interests of Helium Australia Pty Ltd - 84.66%, He Nuclear Ltd – 15.34%), a deeper subsalt gas condensate and helium prospect, previously drilled in 1992 with flow to surface recorded including condensate, gas and helium at up to 6.2%. The prospect has up to 800 BCFG with 15 BCF of helium potentially in place at “high” estimate UGIIP. Other prospects with similar objectives are currently the subject of additional seismic acquisition during the current seismic campaign.

-       Madigan 1, a Pedirka Basin target straddling the border between Central’s EP 93 and the Rawson EP 97 Simpson farmin block (with participating interest of Merlin Energy Pty Ltd – 65%, Rawson Resources Ltd – 20% and Petroleum Exploration Australia Ltd – 15%) with potential to host up to 400 MMbbls UOIIP at “high” estimate. A deeper target, the Lucan lead, an interpreted carbonate platform play stratigraphically under the Madigan prospect may have potential to host up to 160 MMbbls of UOIIP at “high” estimate. Further to the south within the EP 97 Simpson farmin block, an even bigger interpreted carbonate platform lead, the Erec lead, may have potential to host up to 5 Billion bbls of UOIIP at “high” estimate.

-       Within EP 93 (with participating interests of Merlin Energy Pty Ltd - 70%, Petroleum Exploration Australia Ltd - 20% and Red Sky Energy (NT) Pty Ltd - 10%), the Guinevere oil prospect within the Madigan Trough is planned to receive further seismic attention during the current campaign.

Source: Central Petroleum