the australian, page-3

In the interests of " a free press".

CENTRAL Petroleum, the oil and gas explorer run by former Queensland Gas boss Richard Cottee, has recorded better than expected results at its Northern Territory joint venture with ­Santos.

Central said the Mt Kitty exploration well in the onshore Amadeus Basin had flowed at strong rates, showed thicker than expected “tight sands” reservoirs and had a high amount of helium, which fetches a much higher price than natural gas.

Mr Cottee said the encouraging results at Mr Kitty and the nearby Magee 1 well bolstered the quest to prove up enough gas in the southern Amadeus Basin to support connecting the Northern Territory to the export-exposed eastern states gas market.

“While it is too early to speculate on the commercial significance of the gas discovered in the Mt Kitty-1 well until logging operations are completed and gas samples are analysed, it should be noted that the geological ­parameters known to date are aligned with, if not better than, those expected prior to drilling,” Mr Cottee said.

He said the targeted Heavitree formation was thicker than expected at 109m.

Central shares got a boost from the announcement, ending 3c, or 6 per cent, higher at 51.5c and giving the company a market value of about $170m.

Full analysis of the testing had been expected this week but is now expected after Anzac Day after a drill rig tipped over on site, causing operations to be suspended.

No one was hurt and there was no environmental impact, Central said.

The well is targeting tight sands, which are generally classified as unconventional and require hydraulic fracturing or “fracking’’ to release the gas.

Mr Cottee said a horizontal well would be required to test the full potential of the ground.

The gas at Mt Kitty contains up to 5.8 per cent helium, which was about 30 times as valuable as methane, Mr Cottee said.

The Magee well contained about 6 per cent helium.

Central holds 30 per cent of the joint venture and Santos 70 per cent, its full entitlement under a farm-in agreement.