ASX ANNOUNCEMENT & PRESS RELEASE ASX CODE: CTP11.06.27 TO: The...

ASX ANNOUNCEMENT & PRESS RELEASE ASX CODE: CTP
11.06.27 TO: The Manager, Company Announcements ASX Limited
CONTACT: John Heugh +61 8 9474 1444
CENTRAL PETROLEUM COMMENCES GLOBAL SEARCH FOR
PEDIRKA BASIN UCG/GTL COMMERCIALISATION PARTNERS
Petroleum and minerals explorer, Central Petroleum Ltd (ASX Code CTP-?Central? or
?CTP?) have pleasure in announcing that they have entered into a Deed of Cooperation
with Allied Resource Partners Pty Ltd, (?ARP?) to oversee the sourcing of funding and
technology for a series of underground coal gasification (?UCG?)/gas-to-liquids (?GTL?)
Projects aimed at, inter alia, developing energy security for Australia in liquid transport
fuels.
Key Points:
 Exclusive agreement signed with Allied Resource Partners (?ARP?), a
fully aligned commercialisation partner over part of Central?s permit and
application areas in the Pedirka Basin covering coal deposits.
 ARP will instigate and oversee the global search for funding and
technology partners for part of Central Petroleum?s coal assets located in
the Northern Territory and South Australia.
 A rigourously prescriptive Request for Proposal (?RFP?) process will be
used to bind commitments to the Project from already identified carefully
selected major domestic and global petroleum and mining companies,
sovereign funds, energy funds and investment funds.
 Compliant RFP respondents will be required to detail:
i) their plans to explore for coal and potentially complete a Bankable
Feasibility Study (?BFS?) in which Stage 1 output of a minimum of
60,000 barels per day (bpd) of ultra-clean fuels would be based on
a yet to be drilled minimum JORC compliant resource of 4 billion
tonnes of accessible coal and;
ii) their plans to commence construction of Stage 1 of the Project
within 5 years.
 Compliant RFP respondents will also be required to detail their
incremental expansion strategies to a potential rate of 3 million bpd,
should exploration succeed in transforming a substantial portion of the
current coal Exploration Target* of approximately 1,700 (?low?) to 2,500
(?high?) billion tonnes of coal into compliant JORC resources in a mix of
Mining and Petroleum Act permits and applications.
Note : * Coal tonnages where quoted are a viable ?Exploration Target? - AusIMM ? 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 JORC Mineral Resource;
exploration programmes are contingent on access, funding, force majeure, availability of rigs, crews and
equipment and land access. An independent report on the Exploration Target tonnages is appended herewith.
The Pedirka Basin
ARP?s Chairman, Michael Doyle stated today that ?this inspirational, watershed
agreement with CTP is aimed at creating significant and multi-generational benefits to
Australia, including; liquid fuels self-security, taxation and royalty revenues,
employment, and indigenous empowerment. These benefits combine to potentially
make the Project of national and state significance?.
The initial proposed development plan timelines are as follows:
 Request for Proposal (RFP) process initiated December half, 2011.
 Final consortia selected March quarter 2012.
 Bankable Feasibility Study (BFS) initiated June half, 2012, inclusive of a drilling
programme aimed at a potential minimum JORC compliant 4 billion tonne
resource of coal, suitable for UCG and capable of supporting a GTL plant.
 Construction Stage 1 commencing 3 to 5 years after contract signing ?
estimated cost for the 60,000 bpd plant to be circa $7.5 billion.
 Potential to increase liquids output to 3 million bpd through modular plant
expansions provided extensive drilling of coal exploration targets translates into
JORC resources.
The foregoing effort is predicated upon significant expenditure, exploration success,
technical due diligence and other attendant requirements such as State and Federal
support and legislative clarification. Whilst the tenements under scrutiny are highly
prospective with coal intersections up to 35m in thickness, they remain sparsely drilled
at this time, hence the exploration phase is critical to the long term success of the
proposal.
CTP and ARP jointly believe the deeper coal seams under 200-300m will be amenable
to environmentally safe underground coal gasification (UCG) extraction techniques
offering capital and operating cost benefits, compared to traditional open cut and
underground coal mining. UCG is a way of gasifying coal underground by heating and
then extracting the produced ?Syngas?, mostly a mixture of hydrogen and carbon
monoxide?. At surface the Syngas can be converted to liquid fuels by the Fischer
Tropsch process (GTL) and then readily transported to markets.
Unlike coal seam gas extraction, (CSG), UCG does not rely on lowering the water table
to drain the coal seams and does not rely upon ?fraccing? to release the gas. By reinjecting
any CO2 or alternatively by using it in the production of methanol, another
valuable liquid petrochemical, the UCG and GTL processes are capable of being
engineered to produce a negligible carbon footprint. Because the coal seams in the
Pedirka Basin are multi-layered and separated by layers of sandstone and shale,
invasion of the associated overlying aquifers can be prevented by design engineering
as well as comprehensive monitoring and combustion pressure control, a feature sadly
lacking in many failed UCG trials historically.
CTP?s Managing Director John Heugh noted ?CTP is now looking further afield to its
immense untapped coal exploration potential to augment its already substantial
petroleum exploration potential. Any active tenement holder possessing deep coal
assets as CTP does, would find it incumbent upon them to scrutinise every possible
method and means of exploiting those assets as soon as possible in the best interests
of the Company and the nation.?
CTP and ARP will require compliant RFP respondents to bear the entire BFS costs,
which will allow CTP to concentrate its efforts and finances on its conventional and
unconventional oil, gas and helium gas assets in Australia.
ARP?s Joint Managing Director, David Shearwood, is quoted as saying ?The Stage 1
60,000 bpd project is estimated to cost approximately $7.5 billion and the eventual
scale and estimated high margins of the Project are such that we expect a high level of
interest. Our initial financial modelling indicates that Stage 1 will likely be expanded
rapidly with each expansion likely to be 100% debt fundable due to their rapid payback
periods and high margins.?
The Project, if successful as envisaged, will help Australia become self-sufficient in
liquid transport fuels, a National security imperative; Australia could indeed become
an exporter of liquid fuels. Australia?s proximity to Asia lowers transportation costs and
our location outside the Middle East reduces political risk. These advantages along
with the ultra-clean nature of the product ensure sales prices achieved should be at a
premium to benchmark prices for finished petroleum products such as diesel and jet
fuel.
Federal, Northern Territory and South Australian governments would benefit from
development expenditure, construction and operating employment, royalties and taxes.
Indigenous communities would benefit from extremely long term royalty income
streams, training, employment and community development programmes which can
support and positively impact the lives of current and future generations.
The Project as envisaged would be environmentally sound and conform to best
practices on many fronts;
 Liquid products planned will be ?ultra clean? due to extremely low contaminant
levels especially sulphur which will produce substantial reductions in pollutants
when compared to today?s generation of liquid transport fuels.
 Much of the CO2 emissions generated on site will be captured and stored and
the remainder could be diverted to the production of methanol, another valuable
petrochemical.
 There will be no ?fraccing? of coal seams
 There will be no draining of coal seams or lowering of the water table
 Combustion pressures and geological selection of appropriate coal seams will
be carefully monitored to ensure no leakage into any possible overlying aquifers
 Remnant pillars will be carefully optimised to ensure no ground subsidence
UCG Projects are ?Clean Coal? as they offer a major step towards reducing CO2
intensity of power generation and transport fuels.
ARP?s Chairman, Michael Doyle commented ?UCG extraction does not employ the
same technology methods as Coal Seam Methane or Coal Seam Gas. UCG does not
require the lowering of the water table to drain coal seams, the use of fraccing
techniques to rupture rock underground, or the use of carcinogenic chemicals. There is
a groundswell of total misinformation in the market regarding these facts.
UCG technology based projects are increasingly becoming mainstream and we expect
many more to appear across the globe in the next decade. Current examples of UCG
projects in existence and planned near term include;
? Yerostigaz, 50 years of UCG for power generation in Uzbekistan (now majority
owned by Linc Energy Limited, of Australia);
? Chinchilla, 10 years of UCG operation in Queensland Australia, including 3
years of liquids production (100% Linc Energy).
? Eskom, the South African government?s power utility has been conducting UCG
trials for many years and is presently co-firing a power station with UCG derived
Syngas as well as coal.
? Eskom have announced its intention to develop a 2,100 MW 100% UCG fired
power station in South Africa.
? Linc Energy plans multiple UCG/GTL projects (power generation and liquids
production) starting with Wyoming in the December half 2011 and rolling out other
UCG projects across coal assets in Alaska, Australia and Asia.?
In concluding, David Shearwood stated, ?ARP is pleased to be working with CTP who
over a decade ago set about exploring Australia?s remote interior in a brilliant forward
looking counter cyclical strategy. CTP has discovered oil shows in areas never before
explored as well as the enormous coal exploration target which now underpin the UCG
effort. ARP is dedicated to supporting CTP?s ambition to commercialise and then
expand its UCG assets in the Pedirka Basin of Australia. The robust RFP process will
help identify the best mix of technical and financial partners for the Project. .?
The area covered by the CTP-ARP Agreement consists of EPs 93, 105 & 107 as well
as PELA 77 or those areas of mining interests held by CTP co-incident with these
permits and applications.
About Allied Resource Partners Pty Ltd (ARP)
ARP?s Chairman, Michael Doyle is a specialist in investment banking, corporate
finance, project and infrastructure financing. He has worked on toll roads, project
financing, coal acquisitions and heavy industry in Australia and abroad. He is well
connected in Asia having worked with Deutsche Bank, Merrill Lynch and private
merchant banks in Hong Kong on numerous major cross-border transactions in the
PRC and Asia. He holds a BA (Hons) from Sydney University.
ARP?s Managing Director, David Shearwood, has extensive experience in mining
engineering, funds management, as a resources analyst, in infrastructure and coal
mining. He worked with Macquarie Bank?s infrastructure and specialised funds division
as well as Westpac and QBE Insurance in their funds management divisions. He was a
highly experienced stockbroker, a highly rated fund manager and has a BE Hons in
Mining and an Order of Merit from the Australian Institute of Company Directors. He
has been a director of Fat Prophets and most recently Chief Investment Officer of Atom
Funds Management, one of the highest performing funds in Australia under David?s
management.
ARP is a developer of resource assets. They utilise their specialised and experienced
team to identify lucrative environmentally sound projects, helping modest sized
companies manage the financial and technical aspects of the project in partnership
with various domestic and international resource project funders to the benefit of asset
owners.
ARP aims to be a pre-eminent independent developer of Australian Mineral, Metal,
Resource and Energy assets. By combining the talent of some of the most senior
resource experts in Australia, from all related disciplines (exploration, development,
financing, promoting, infrastructure, project management and more) Allied Resource
Partners is a single source in developing or acquiring a natural resource asset.
Renowned international coal specialists McElroy Bryan Geological Services (MBGS)
for example will work under the Allied Resource Partners? umbrella in the provision of
geoscientific and geomechanical advice and analysis to Central?s UCG/GTL
programme.
Allied Resource Partners puts the myriad of consultants, suppliers and intermediaries
under one roof ? allowing their client to deal with a single, well- resourced partner. This
drastically reduces the project risk and margin leakage. One Partner, One Pricing
Structure. ARP has aligned interests with their clients.
Further information about ARP can be obtained from its website at:
www.alliedresourcepartners.com.au
Contact: Mr Michael Doyle
Joint Managing Director
E: [email protected]
M: +61 432 335 266
Mr David Shearwood
Joint Managing Director
E: [email protected]
M: +61 412 691 344
About Central Petroleum Ltd
Central Petroleum is an ASX listed junior exploration and production company
operating what is regarded as the biggest package of prospective acreage in Australia
at approximately 70 million acres in a mix of petroleum and mining permits and
applications. The Company gained admission to the Official List of the ASX on March
3rd 2006 with shares and options commencing to trade on Tuesday the 7th March
2006. The acreage has been assembled since 1997 when the Company was first
formed as Merlin Synergy NL.
The acreage includes the majority of the Pedirka Basin in the Northern Territory and in
South Australia, the majority of the Amadeus Basin in the Northern Territory, all of the
known Lander Trough in the Northern Territory and approximately 20,000 km2 of the
Southern Georgina Basin.
The Company was formed by Mr John Heugh and Mr Richard Faull in 1997 in a
countercyclical strategy aimed at securing large acreage tracts with very large targets
in prospective areas of strategically well placed parts of central Australia and later to
examine potential for the monetization of gas resources via Gas to Liquids (GTL)
Fischer Tropsch technology in the production of zero sulphur diesel, naphtha and jet
fuel.
John Heugh, the Company Managing Director has worked in exploration operations or
in prospect development in 14 different basins in Australia and overseas with
companies such as Ampol, Santos, Arco, Exxon, Pancontinental, Phoenix, Kufpec and
others and was responsible for putting together the acreage package Central now
operates. Central uses well-credentialled external service providers and consultancies
to back up its in-house expertise and has an active forward looking programme to
identify and fulfil its needs in additional staffing.
John Heugh
Managing Director
Central Petroleum Limited
For further information contact:
John Heugh Tel: +61 8 9474 1444 or Robert Gordon Corporate Writers Tel: 0413 040 204
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 Oil & Gas Exploration Limited (?OGE?) (previously
He Nuclear Ltd) Magee Prospect Block) - HEA 100%
 Magee Prospect Block, portion of EP 82 ? HEA 84.66% and OGE 15.34%.
 EP-93, EP-105, EP-106, EP-107,EP 115, 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, Dune and Pellinor 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 OGE Mt Kitty Prospect Block) and EPA-124 ? ORP
100%.
 Mt Kitty Prospect Block, portion of EP 125 - ORP 75.41% and OGE 24.59%.
 EP-112, EP-118, EPA-111 and EPA-120 - FOG 100%.
 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%
 EL-27094, EL-27095, EL-27096, EL-27097, EL-27098, EL-27099, EL-27100, EL-27101, EL-27102, EL-27103,
EL-27104, EL-27105, EL-27106, EL-27107, EL-27108, EL-27109, EL-27110, EL-27114, EL-28095, EL-28096,
EL-28097 and ELAs 28468 and 28472 - Central subsidiary Merlin Coal Pty Ltd 100%(?MEC?).
General Disclaimer and explanation of terms:
Potential volumetrics of gas or oil may be categorised as Undiscovered Gas or Oil Initially In Place (UGIIP or UOIIP) or Prospective
Recoverable Oil or Gas in accordance with AAPG/SPE guidelines. Since oil via Gas to Liquids Processes (GTL) volumetrics may be
derived from gas estimates the corresponding categorisation applies. Unless otherwise annotated any potential oil, gas or helium UGIIP
or UOIIP figures are at ?high? estimate in accordance with the guidelines of the Society of Petroleum Engineers (SPE) as preferred by the
ASX Limited but the ASX Limited takes no responsibility for such quoted figures.
As new information comes to hand from data processing and new drilling and seismic information, preliminary results may be modified.
Resources estimates, assessments of exploration results and other opinions expressed by CTP in this announcement or report have not
been reviewed by relevant Joint Venture partners. Therefore those resource estimates, assessments of exploration results and opinions
represent the views of Central only. Exploration programmes which may be referred to in this announcement or report have not been
necessarily been approved by relevant Joint Venture partners and accordingly constitute a proposal only unless and until approved. All
exploration is subject to contingent factors including but not limited to weather, availability of crews and equipment, funding, access rights
and joint venture relationships. This document may contain forward-looking statements. Forward looking statements are only predictions
and are subject to risks, uncertainties and assumptions which are outside the control of Central Petroleum. These risks, uncertainties and
assumptions include (but are not limited to) commodity prices, currency fluctuations, economic and financial market conditions in various
countries and regions, environmental risks and legislative, fiscal or regulatory developments, political risks, project delay or
advancement, approvals and cost estimates. Actual values, results or events may be materially different to those expressed or implied in
this document. Given these uncertainties, readers are cautioned not to place reliance on forward looking statements. Any forward looking
statement in this document is valid only at the date of issue of this document. Subject to any continuing obligations under applicable law
and the ASX Listing Rules, or any other Listing Rules or Financial Regulators? rules, Central Petroleum, its agents, directors, officers,
employees, advisors and consultants do not undertake any obligation to update or revise any information or any of the forward looking
statements in this document if events, conditions or circumstances change or that unexpected occurrences happen to affect such a
statement. Sentences and phrases are forward looking statements when they include any tense from present to future or similar inflection
words, such as (but not limited to) "believe," "estimate," "anticipate," "plan," "predict," "may," "hope," "can," "will," "should," "expect,"
"intend," "is designed to," "with the intent," "potential," the negative of these words or such other variations thereon or comparable
terminology, may indicate forward looking statements.
Competent Persons Statement Al Maynard & Associates
Information in this announcement or attached report or notification which may relate to Exploration Results of coal tonnages in the
Pedirka Basin is based on information compiled by Mr Allen Maynard, who is a Member of the Australian Institute of Geosciences (?AIG?)
and a Corporate Member of the Australasian Institute of Mining & Metallurgy (?AusIMM?) and an independent consultant to the Company.
Mr Maynard is the principal of Al Maynard & Associates Pty Ltd and has over 30 years of exploration and mining experience in a variety
of mineral deposit styles. Mr Maynard has sufficient experience which is relevant to the styles of mineralisation and types of deposit
under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the
?Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves?. Mr Maynard consents to inclusion in this
Report or announcement of the matters based on his information in the form and context in which it appears.
JOINT MEDIA RELEASE
World Class Clean Fuel Production Project in Central Australia
Central Petroleum Limited (CTP - ASX listed) and Allied Resource Partners Pty Ltd (ARP) have today
signed an agreement that works towards the establishment of a significant new Clean Fuel Production
Project in the Pedirka Basin in Central Australia.
The Project is underpinned by CTP?s recent discovery of a very large coal field in the Pedirka Basin, in
south east Northern Territory and northern South Australia, which is estimated to contain a coal
exploration target of thousands of billions of tonnes.
The $7.5billion Pedirka Basin Clean Fuel Production Project intends to:
Use Underground Coal Gasification (UCG) and Gas to Liquids (GTL) technologies to unlock energy
from the vast ?stranded? coal deposits of the Pedirka Basin in the arid Simpson Desert;
Convert these underground coal resources into environmentally friendly, ultra clean liquid fuels;
Enable carbon capture and permanent underground storage (sequestering) of CO2;
Create an economically and environmentally sustainable industry in Central Australia; generating
infrastructure, investment, jobs, skills and economic growth;
Support the development of long term revenue streams and Foundation programs in health,
education, employment and training for local Indigenous communities; and
Help secure Australia?s energy supply, with the potential to generate significant export revenue.
David Shearwood, ARP Joint Managing Director stated:
?We have no doubt the global RFP process will attract a large number of potential project
partners and consortia because the proposed project is world class in size, expected
profitability and environmentally because it is a giant leap towards lower emission fuel. It has
the potential to be expanded many fold with enormous benefits to Government, regional
economies, Indigenous communities and Australia?s long term oil self sufficiency.?
Bankable Feasibility Study
Today?s announcement will commence the search for $300m in funding and technology partners for a
Bankable Feasibility Study (BFS) from major global and Australian sources. Funders will be asked to
formally respond to a Request for Proposal (RFP) process in the December half of 2011.
The BFS will include an intensive exploration program; UCG / GTL Demonstration Plant and trials;
obtaining relevant government licenses and approvals processes; and Engineering, Procurement,
Construction Management (EPCM).
Stage 1: Full Commercial Production
It is anticipated that construction of Stage 1 (requiring investment of approximately $7.5 billion) will
commence within 5 years of the signing of funding partners. Stage 1 aims to produce an estimated
minimum 60,000 barrels per day (22 million barrels pa), which will be piped to Darwin for use in
domestic markets and for export. At that rate, the Project aims to generate long-term revenue of over
$6 million per day, at low operating costs and create up to 3,000 jobs during construction and 1,000-
1500 jobs once operational.
Stage 2: Expansion Through Modularization
Additional expansions are anticipated with Stage 2 using faster construction through modular plants
and further pipelines.
The Partners
CTP is an ASX listed junior exploration and production company operating the largest holding of
prospective onshore acreage in Australia totalling over 270,000 km2, c.70 million acres. CTP holds
granted exploration tenements and tenement applications pending over the majority of the Pedirka
Basin in south east Northern Territory and northern South Australia. More details on CTP are
available here: http://www.centralpetroleum.com.au/.
ARP is a new Australian company focused on developing high quality Australian energy and mining
assets. With a highly experienced technical, legal and financial team, ARP provides a one stop solution
for asset owners and asset funders. ARP sources capital (debt and equity) for owners; identifies
quality assets - usually unheralded - for asset funders; and is capable of operating assets and related
infrastructure. More details on ARP are available here: http://alliedresourcepartners.com.au/.
Background on UCG / CTL Technology to Produce Ultra Clean Liquid Products
The underground coal in the Pedirka Basin is suitable for extraction on site, via UCG technology - by
heating the coal underground till it becomes a gas. UCG gas from coal will be piped from underground
to the GTL plant where it will be cleaned prior to producing liquids. The refining process:
Removes contaminants, particulants, sulphur and CO2; and
Produces ultra clean liquid products including diesel with superior emissions properties compared
with conventional diesel. Ultra clean diesel has almost zero sulphur; fewer emissions, particulants
and contaminants; almost no aromatics; and delivers more power per volume than conventional
diesel.
Proven Technology
UCG with subsequent GTL processing is successfully being operated by Linc Energy Limited at their
Chinchilla facility in SE Queensland; and Eskom in South Africa is operating UCG for power generation.
UCG technology enables extraction of coal?s energy in an environmentally sustainable way.
While some waste CO2 will be produced on site, the project will enable carbon capture and
permanent underground storage (sequestering) of CO2 during the UCG process. Waste CO2 could also
be transported to old oil fields, for example the Cooper Basin, where the gas can be pumped
underground to enhance oil recoveries whilst sequestering the CO2. Additional CO2 can also be
removed through the production of methanol, a valuable petrochemical.
Importantly, UCG does not employ the same technology as Coal Seam Methane extraction.
UCG does not require:
The water table to be lowered;
Fracking of rock (forced rupturing); or
The use of carcinogenic chemicals.
Media Contact and Resources
For media comment, please call David Shearwood, ARP Joint Managing Director, on 0412 691 344.
Maps of CTP?s tenements can be downloaded here: http://www.centralpetroleum.com.au/.
27 June 2011