ann farm in sth georgine basin (total) , page-2

ASX ANNOUNCEMENT & MEDIA RELEASE ASX CODE: CTP
6 November 2012
Central Petroleum and Total announce Strategic Alliance for
Exploration in Southern Georgina Basin
Central Petroleum Ltd (ASX:CTP) (Central or Company) today announce a multistage farm-out agreement with French energy company Total for the exploration of
approximately 6 million acres. The agreement covers four highly prospective areas
in the vicinity of recent discoveries in the Southern Georgina Basin in central
Australia, namely, EP(A)132 in the Northern Territory and ATP(A)909, ATP(A)911
and ATP(A)912 in Queensland.
The exploration will start with an investment by the joint venture of US$60 million for
stage one, and, at Total’s election, US$130 million for stages two and three. Should
Total continue and fulfil its funding obligations for stages 2 and 3 Total will earn in
increments to a total of 68 percent in the permits. Total is required to fund 80
percent of exploration and appraisal costs over four years to which Total has
committed the first US$48 million of expenditure for stage one after which Central
will fund the next US$12 million.
Central will operate the farm-out areas for the first four years and after completion of
stage 3 Total will assume operatorship for 90% of the area. Central will retain
operatorship of the upstream activities on the remaining 10% of the area.
Central Chairman, Dr Henry Askin said the agreement provided substantial funding
for a full exploration programme while retaining for Central the opportunity to
develop its capacity as an independent operator.
“This agreement pursues a course that gives priority to the exploration of our
extensive acreage by providing for an accelerated exploration program which would
not have been otherwise possible”, Dr Askin said.
CEO Richard Cottee said that with this agreement Central could achieve long term
objectives he had outlined to the market and the access to the capital required for
success.
“The agreement brings a balance of benefits to Central and our shareholders. It
provides capital for a fully funded exploration programme while also retaining
significant interest in the nearly 6 million acres we hold in the Southern Georgina
Basin.
“Central Petroleum retains 100% interest in and 100% access to the cash flow from
its Surprise discovery. This also gives the company the necessary time to build the
human resources and expertise to develop its capacity as an operator.
“The company’s focus is clearly on the exploration and development of our assets in
the Amadeus and Southern Georgina Basins.