Perth-based Central Petroleum Limited signed the contract with WA-based drilling services company, Wallis Drilling Pty Limited, to drill five fully cored coal seam gas (CSG) wells over the next five months, in the highly prospective Pedirka Basin southeast of Alice Springs where the Company is exploring for an independently reported potentially recoverable prospective resource of 34 -70 trillion cubic feet (TCFG) of CSG as well as conventionally reservoired oil targets.

The announcement follows the recent signing of a contract with leading seismic operator, Terrex Seismic Limited, for a 1,350 kilometre 2D seismic survey over the Pedirka and neighbouring Amadeus Basins – the largest single survey ever undertaken in these relatively underexplored but highly prospective regions in central Australia.

“These two contracts represent another milestone for our exploration in Central Australia, paving the way for the next phase of an extensive drilling and seismic exploration programme to prove up the tremendous potential for hydrocarbons that all our previous surveys have been pointing to,” Central Petroleum’s Managing Director, Mr John Heugh, said today.

“If the results from these first five CSG are successful, subject to Joint Venture approval, they could be followed up quickly with further fully cored and or production test CSG wells in the Pedirka Basin.”

The initial fully cored CSG wells will be drilled in adjacent Exploration Permits 107 and 93, the latter of which abuts the South Australian border. The first CSG well, in EP 93, is due to be spudded in the first week of December with access road repair and seismic line clearing crews being mobilised by mid November.

Central’s imminent Phase One 2009 exploration programme - valued at A$32 million - will also include a comprehensive geochemical survey over the Johnstone, Surprise and Stuart oil prospects in the Amadeus Basin near the WA border in EP 115, a promising oil permit where the Company is targeting upside “high” estimates of over 500 MMbbls UOIIP in the first three prospects.

“We are confident that the seismic acquisition, which will run over into 2010, will not only provide more detail and a possible expansion in size of up to five existing oil, gas and helium prospects slated for attention in 2010, but will open up a number of other new leads for follow up work,” Mr Heugh said.

“Although the Company aims to potentially develop large scale GTL and helium extraction industries in the longer term based on gas of various compositions inclusive of CSG, it has also recently committed to a scoping study of various plant designs and sizes for relatively low volume helium extraction and monetisation, subject to discovery, which, along with the potential of significant oil discovery may hold promise for much earlier cash flow.”

Tags: Central Petroleum Limited