bhpb exec in agreemnt ?, page-3

Excellent news. SP will rocket imho.


11 August 2009
TO: The Manager
The Company Announcements Office
ASX Limited
FORMER BHPB COAL SEAM EXECUTIVE IN INITIAL AGREEMENT
WITH CENTRAL PETROLEUM FOR ALICE SPRINGS TENEMENT
A green energy company headed by the executive who founded and led BHP Billiton’s coal seam gas (CSG) business until its sale in 2006, has agreed to a term sheet with Central Petroleum Limited (ASX: “CTP”) to assess the potential of a large Coal Seam Gas (CSG) and oil prospective block southeast of Alice Springs in the Northern Territory.
Central Petroleum and the privately held, low emission energy solution developer, Energy Infrastructure and Resources Limited (EIR), have signed an initial Term Sheet proposing a joint assessment of Exploration Permit Application (EPA) 130.
EIR was founded and is headed by its Managing Director, Mr Rohan Gillespie, who founded and led BHP Billiton’s CSG business as Vice President and Chief Operating Officer until the division was sold to AGL in 2006. Prior to that, Mr Gillespie held senior roles with the Commonwealth Bank and Ceramic Fuel Cells and Renewable Energy Corp and established EIR in 2006.
The Term Sheet provides for Mr Gillespie’s EIR to earn a 25% stake in EPA 130, with Central Petroleum reducing its interest in the block to 55%. EIR will be required to fund 60% of initial work programs (a 2.4:1 “promote”) and pay a “Reserve Premium” of $10,000,000 per trillion cubic feet of gas (TCFG) or oil equivalent, which may be discovered and independently verified at 3P reserve level.
Great Southern Gas Limited, a subsidiary of EIR, already holds a 20% conditional interest in the permit application, which was farmed down by Petroleum Exploration Australia Limited (PXA), now a subsidiary of QGC, a BG group business, as part of the non-confidential provisions of the PXA farmin which Central and PXA struck in early 2008. EPA 130 is no longer part of the PXA farmin permit and application areas.
“The Term Sheet is subject to Board approval of a formal farmout agreement but points the way to a potentially rewarding relationship” Central Petroleum’s Managing Director, Mr John Heugh, said today.
“To attract a partner, which is lead by someone of the calibre and experience of Mr Gillespie, underscores in our view, the primary prospectivity of this 15,000 km² area,” Mr Heugh said.
“Up to 25% of this tenement is thought to be underlain by Permian coal measures and while it has only attracted limited seismic and no drilling to date, it does host several very large mapped conventional prospects, inclusive of the Lamerocke, Tintagel and Galahad prospects.
“Combined, these prospects total more than 700 million barrels of Undiscovered Oil Initially In Place (UOIIP).”
Mr Heugh said EIR had been successful to date with a combination of corporate advisory assignments and new business incubations. These included:
Pacific GTL – Established to develop a gas-to-liquids business in eastern Australia, to sell diesel into the domestic market to offset imports. A pre FEED of the first initiative, the SunState GTL Project, is underway. A German financial group is co-investor with EIR, which together has an exclusive strategic alliance with AMEC for its engineering and project management services.
Magma Oil – Established to commercialise innovative underground coal-to-liquids (UCTL) technology. Funding has been secured for a $3.8million demonstration plant through ASX-listed Regal Resources Limited.
With 270,000 km² of tenements, Central Petroleum is the largest holder of prospective oil and gas acreage in onshore Australia, with a portfolio that includes the majority of the Pedirka and Amadeus Basins on the SA-NT border, all of the known Lander Trough north of Alice Springs and 15,000 km² of the Southern Georgina Basin in far west Queensland.
Central Petroleum is well cashed up, recently completing a $26 million Renounceable Rights Issue and subsequent placement of $5 million to raise more than $31 million.
MEDIA CONTACT:
John Heugh Kevin Skinner
Central Petroleum Limited Field Public Relations
(08) 9474 1444 (08) 8234 9555
0427 107 690 0414 822 631