announcement out

ASX ANNOUNCEMENT ASX CODE: CTP
19 August 2010
TO: The Manager, Company Announcements ASX Limited
CONTACT: John Heugh +61 8 9474 1444
CTP DRILLING UPDATE
Central Petroleum Limited (ASX:CTP) (Central), as Operator, advises that :
1.
The Johnstone West-1 (EP115) wildcat oil well (JW-1) spudded this morning at 0130 CST.
2.
Preliminary advice has been received that there is little chance of significant coal seam gas (CSG) resources in or about the 5 well CSG programme completed in May 2010.
3.
The Company plans to initiate a stratigraphic drilling programme for coal in the Pedirka Basin shortly.
Johnstone West-1 is the second well in a planned 3-4 well programme for 2010 and may host up to 500 MMbbl oil at high-P01 estimate and up to 400 MMbbl oil at P10 estimate UOIIP in multiple target zones. A fully risked mean of 32 MMbbl UOIIP has been calculated. Two shale bodies are also of interest, the Horn Valley Siltstone and Stairway Sandstone formation shale unit both thought to be present in the JW-1 structure. If present, these shales will be cored and analysed for potential shale gas and or shale oil potential although there are no immediate plans for horizontal drilling or fraccing these horizons in the current 2010 drilling campaign.
Central is Operator and holds a 90% interest in EP 115, through wholly-owned subsidiary Frontier Oil and Gas and Trident Energy Limited conditionally holds a 10% interest in the permit. JW-1 is located at Latitude 23 deg 39 minutes and 21.86 seconds South, Longitude 129 degrees 56 minutes and 39.124 seconds East.
The results of CSG wells drilled to date in the Pedirka Basin have been disappointing. A more detailed report is under preparation by Netherlands Sewell and Associates but their preliminary advice is not encouraging. Although the deeper coals encountered in Blamore 1 drilled in 2008 showed evidence of gas saturation and permeability, they are generally considered too deep for commercial exploitation but this can not be ruled out as the coals are very thick and modern horizontal drilling techniques may have potential in future programmes. The Company believes that in the Pedirka Basin, there may be more potential in underground coal gasification (UCG), mining coal and gasifying on the surface with conversion to liquids (CTL) and perhaps very large scale mining and beneficiation prior to export compared to CSG development.
A four well stratigraphic programme to potentially expand the known distribution and thickness of coal is planned to commence in 4-8 weeks in Centrals wholly owned subsidiary Company, Merlin Coal Pty Ltds Mining Act permits in the Pedirka Basin.
Previous independent reports have estimated the total tonnage of coal above 1,000m as being 635 billion tonnes (low estimate) to 865 billion tonnes (high estimate) within Centrals wholly owned subsidiary, Merlin Coal Pty Ltds mineral leases and 1,110 billion tonnes (low estimate) to 1,385 billion tonnes (high estimate) above 1,000m in the same category in Centrals petroleum leases in the same area in the JORC Exploration Target category. (Mulready and Maynard June 2009). Note : the potential quantity and grade of the coal is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.
John Heugh
Managing Director
Central Petroleum Limited
For further information contact:
John Heugh Tel: +61 8 9474 1444 or Felicity Nuttall (PPR) Tel: +61 8 9388 0944
NOTICE: The participating interests of the relevant parties in the respective permits and permit applications which may be applicable to this announcement are:

EP-82 (excluding the Central subsidiary Helium Australia Pty Ltd (HEA) and He Nuclear Ltd (HEN) Magee Prospect Block) - HEA 100%

Magee Prospect Block, portion of EP 82 HEA 84.66% and HEN 15.34%.

EP-93, EP-105, EP-106, EP-107, EPA-92, EPA-129, EPA-131, EPA-132, EPA-133, EPA-137, EPA-147, EPA-149, EPA-152, EPA-160, ATP-909, ATP-911, ATP-912 and PELA-77 - Central subsidiary Merlin Energy Pty Ltd 100% (MEE).

The Simpson, Bejah and Dune Prospect Block portions within EP-97 MEE 80% and Rawson Resources Ltd 20%.

EP-125 (excluding the Central subsidiary Ordiv Petroleum Pty Ltd (ORP) and HEN Mt Kitty Prospect Block) and EPA-124 ORP 100%.

Mt Kitty Prospect Block, portion of EP 125 - ORP 75.41% and HEN 24.59%.

EP-112, EP-118 and EPA-120 - Central subsidiary Frontier Oil & Gas Pty Ltd (FOG) 100%.

EP-115 & EPA-111 FOG 90%, Trident Energy Limited 10%..

PEPA 18/08-9 PEPA 17/08-9 and PEPA 16/08-9 - Central subsidiary Merlin West Pty Ltd 100%.

EPA 130 MEE 55% and Great Southern Gas Ltd 45%
Competent Persons Statement