OilVoice - $31m Secured For Central Petroleum’s Red Centre Ambitions

$31m Secured For Central Petroleum’s Red Centre Ambitions

18 June 2009

The search for conventional and “ultra-clean” hydrocarbon fuels across Australia’s Red Centre has received a significant boost with a successful A$31 million capital raising by Perth-based Central Petroleum Limited to be completed imminently.

Commitments under the Company’s Renounceable Rights Issue returned a heavily oversubscribed shortfall which attracted applications overall in excess of A$36 million - a 38% oversubscription for the A$26 million offering.

Central Petroleum said it had elected to soak up some of the excess demand by using its 15% placement capacity under the ASX Listing Rules to raise a further A$5 million via a placement to investors whose applications for new shares had not been fully satisfied by the Rights Issue shortfall, delivering a total gross capital raising of A$31 million.

Patersons Securities Limited acted as Lead Manager to both the Rights Issue and the Placement, helping introduce new institutional and sophisticated investors onto the Company’s share register for the first time.

Proceeds from the raising will primarily fund an aggressive 2009-10 planned hydrocarbon exploration program in the highly prospective Pedirka and Amadeus Basins, close to the South Australia-Northern Territory border.

“The size of the shortfall over-subscription shows how seriously investors now regard the potential for new-era hydrocarbon fuels in this vast and relatively unexplored region of Central Australia,” Central Petroleum’s Managing Director, Mr John Heugh, said today.

“This was reflected in the need to scale-back the total raising,” Mr Heugh said.

“As a result of this success, Central Petroleum has emerged from the exercise as a financially invigorated explorer with a lineup of highly prospective coal seam gas, gas, condensate, oil and helium prospects in all areas stretching around Alice Springs.

“Backing that is a strengthened Top 20 shareholder lineup, and a war chest that over the next 18 months will allow corporate objectives to be met while implementing and fully funding our working interest share in the planned exploration schedule.”

This schedule is planned to include:

Coal Seam Gas
- 5+ optional 5 fully cored CSG wells - (Pedirka Basin)
- Flow testing CBM93001
- GoreTM survey Johnstone

Amadeus Basin
- Drill Johnstone-1, Ooraminna-2, Magee-2 and Mt Kitty 1

Seismic
- 1,250 line km (Amadeus and Pedirka)

Potential for new clean energy source
In the Pedirka Basin, the Company has identified a viable coal exploration target of between 0.6-1.3 trillion tonnes and a prospective synthetic gas (syngas) resource at “best’ level of 12,500 trillion cubic feet of gas above a 1,000-metre depth cutoff. This prospective resource if processed via a Gas To Liquids plant may be capable of producing 1.25 trillion barrels of petroleum liquids such as ultra-clean diesel.

The province’s potential now includes a variety of highly marketable ultra-clean liquid distillate fuels such as diesel, jet fuel and naphtha, which may be produced utilising modern underground coal gasification technologies at a proposed Gas to Liquids (GTL) processing plant in Alice Springs.

“The potential of sophisticated new coal gasification and GTL technologies is currently being proved up in various operations along the east coast. We believe these technologies may enable Central Petroleum to unlock a large, un-utilised source of new energy with positive implications for the regional and NT economy,” Mr Heugh said.

With 270,000 km² of tenements, Central Petroleum is the largest holder of prospective oil and gas acreage in onshore Australia, with a portfolio that includes the majority of the Pedirka and Amadeus Basins on the SA-NT border, all of the known Lander Trough north of Alice Springs and 15,000 km² of the Southern Georgina Basin in far west Queensland.