a nice summary from oilbarrel

This article from OilBarrel.com sums up the state of CTP very well ...

(and for those who keep harping on about cash ( or the lack of it), please note that CTP now has access to $48M of OTP ... Cottee has said that the focus is on the Total JV where CTP is operator ... He has moved the HQ to QLD ... He has said that CTP staff will be assigned (and paid) courtesy of this initiative ... He has laid out his strategy by his actions ... a bit of patience is all that is required (if you're impatient, buy the market darling BURU ... Oops that's pretty much halved from its highs too ... just like most onshore Australian explorers! ... step back and smell the roses!)

May 16, 2013
Central Petroleum Closes Farm-Out Of Three Queensland Permits And Hopes To Greenlight Surprise-1 Development In Q3

There was some good news for holders of ASX-quoted Central Petroleum this week as the frontier explorer completed a farm-out to French oil giant Total, thereby unlocking a US$60 million exploration spend on its three permits in Queensland. (The farm-out includes a fourth permit, in the Northern Territory, and this will close on the grant of an exploration permit).

The Total deal was announced back in November and commits the companies to a three-stage, four-year exploration programme, with Total agreeing to fund the first US$48 million of stage one and Central the next US$12 million. Stages two and three, at Total's election, involve further expenditure of US$130 million to earn the French company an incremental working interest of 68 per cent. In all, Total would be funding 80 per cent of E&A costs over four years to earn this equity level. Central's well-regarded MD Richard Cottee, who was appointed in June 2012, rightly described the deal as “a major milestone” for a company that has battled its fair share of partner problems, funding constraints and dissident shareholder action in recent years.

The permits stretch for six million acres in the remote Southern Georgina Basin in central Australia, an area where Central bagged first mover advantage a decade ago. As the country's unconventional resource boom drives activity in these previously neglected frontiers, this move looks increasingly astute with Central landing farm-in deals with Total and Australian oil major Santos in the last six months. It is the shale and unconventional resource potential here that excites the oil majors. Both Total and Santos have interests in the Gladstone LNG project, which has capacity of 7.2 million tons per year and is due online in 2015. Should Central's acreage yield major discoveries then this offers potential long-term feedstock to the plant. Suddenly concerns about how any gas finds in this vast emptiness would be commercialised are rendered moot.

The Santos deal mostly completed last month, covering more than 18.7 million acres in the Amadeus and Pedirka Basins (one permit, EP97, will close pending the completion of Central's buy-out of minority partner Rawson Resources in an all-paper deal that gives Rawson a 3.5 per cent shareholding in Central). Santos has committed to spend up to US$150 million in a phased farm-out, with stage one involving an initial spend of A$30 million with options to invest A$6 million in stage two and a further A$60 million in stage three to earn up to 70 per cent of the acreage. Central will have a free carry over this period.
These two deals will see spending of A$78 million on exploration over the next 15 months, accounting for 85 per cent of the total exploration spend by the company in the seven years since its listing. This marks a real step change in activity levels and, hopefully, will unlock the potential of these lands for long-suffering shareholders.

Despite the huge areas covered by the two farm-outs, they only actually account for 30 per cent of Central's exploration acreage, underlining the scale of this portfolio, which may be the largest continuous acreage position in the world. And while drilling density may be sparse in these remote lands, these are proven producing areas home to the large Mereenie and Palm Valley oil and gas pools.

Indeed, Central has a development-worthy discovery of its own, with the 2010 Surprise-1 oil strike in EP115 in the northwestern Amadeus Basin. This well holds 7.48 million barrels of oil-in-place, with 3P recoverable reserves of 2.1 million barrels and proved reserve of 600,000 barrels. There is additional upside here – a ridge structure to the south-east could significantly increase the size of the known oil pool – while the Horn Valley Siltstone, which lies below the Surprise producing horizon, could be a large shale gas play.
Despite the remote location, the company, which currently holds 100 per cent, believes this is a robust candidate for development and a Preliminary Field Development Plan and Environmental Management Plan are nearly complete. The company hopes to reach a decision on full development in Q3.

Cost control is a key issue in this remote area, which doesn't benefit from the tested services infrastructure of a producing region like the Cooper Basin, particularly at a time when Australia's natural resources boom is driving cost inflation. Central has scoped and costed a production facility, with 5,000 barrels of storage plus water removal and load out facilities, which will be prefabricated and shipped directly to location to reduce remote site construction costs.

The company is also finalising plans for a two well plus options drilling programme, with one well testing the eastern side of the Surprise fault, where there could be a 5.9 million barrel 2C resource. The second well will target the Bitter Springs and Horn Valley Silt formations on the west side of the fault that the Surprise-1 discovery well failed to reach before being completed to produce from the Stairway oil reservoir or as an injector for pressure maintenance in the discovery well.

All this does, of course, present something of a funding challenge, which is weighing on the share price. With reserves books at Surprise-1, the ASX company is looking at debt financing and also has plenty of scope to farm-down. Central ended Q1 with cash of A$1.8 million and hopes to add to this tally through the sale of its coal assets – a conditional sale with a price tag of A$1.8 million is going through due diligence.

This not only adds to its cash balance but also releases the company from forward costs of A$10 million in the next 12 months. Under Cottee the Brisbane-headquartered company has been shedding costs, reducing its quarterly burn rate from A$2.7 million in September 2012 to just below A$2 million in the March 2013 quarter. Further reductions are expected as the new operators remove some of the overhead obligation on Central.