central petroleum business plan

Hello Central Holders

I have done a review of the financial implications of CTP proceeding to drill Surprise East in the near future. I cannot see how it is feasible. This

is my very rough study.

Estimate of average CTP administrative expenses employing figures from the Quarterly Reports:

Quarter Ending Admin Exp.

30/06/13 $1,553,000

30/09/13 $1,772,000

31/12/13 $1,753,000

31/03/14 $1,554,000

Avg per month $552,667

Est. Apr - June 14 $1,658,000

Estimate of notional CTP cash on hand based on figures from the Quarterly Reports:

Quarter Ending Cash on hand

30/06/13 $1,308,000

30/09/13 $15,364,000

31/12/13 $12,464,000

31/03/14 $11,415,000

Subtract Est. Apr - June 14 cash burn of $1,658,000 to arrive at estimate of balance of original cash on hand that will remain as at 30 June 2014
assuming no other expenses.

Remaining $9,757,000

Note: This is a purely notional value for possible current cash as at 30 June with no allowance for February - March infrastructure expenditure

nor for anything to do with Dingo and Palm Valley.

Now add an allowance for crude production since 13 March projected until - say 30 Aug 2014 (assumed completion date Surprise East) 25 weeks

- 175 days at 250 bbod at net $60/bbl.

Add Oil Sales $2,625,000

Estimated Cash on hand to the end of drilling Surprise East: $12,382,000.

Compare with cost of Surprise R-1ST (in Dec - Jan 2011-12) $13,229,000 (figures per QARs for exploration expenditure)

Observation: If we start drilling in late June or July we seem to be $847,000 short of the funds necessary for the campaign (with no allowance

for paying admin expenses and without taking into account cash that has already gone on infrastructure).

I think that we need a solution along the lines of one or all of the thoughts that I expressed in a previous post which I will now recycle:

CTP needs one of:

1. A major placement. The 15% rule would allow us to raise $17m by the placement of 48m shares at $0-35 each. However we will not be

elegible to do that until the end of July because of the 12 rule.

2. A capital raising (which would have the same basic characteristics as the placement) but would be a lot slower.

3. 50:50 a joint venture over surprise west and east combined.

If so, the incoming venturer would need to be asked to pay 50% of all relevant exploration and development expenditure on Surprise - say $10m

for a 50% share - and pay half the value of the reserves and resources - say $20m - for a total of $30m (Cottee's figure from last year). The

terms of the JV would need to require that the rest of the PL area (the greater Surprise area with it's 13 other prospects) be retained by CTP

(with liberty to enter into similar JVs or Farm-ins over each - or the total - of those prospects.

4. A 100% sale of the entire PL, with both Surprises, Surprise deep, the 13 other prospects and all production infrastructure.

In that case the sale price would need to be $60M (2 x the JV figure) + say $20m for the 13 prospects and Surprise deep.

I favour No. 4. The total of $80m would give us the capital to:

(1) keep abreast of our obligations to STO and TOT for our share of the respective JVs over the Santos and Total areas;

(2) seismic the daylights out of the rest of EP 115 (and any of our other titles on which we are free to work) as a campaign to improve the

potential to create a chequer board of JVs over the rest of that (those) title/s;

(3) push for the grant of title over the Wiso and the WA tenements in the Amadeus with the objective of then repeating the the process

formulated in point 2 for those titles; and

(4) continue the process of "left field" enhancements of CTP's business model.

Our management has the flair for more than a horizontal consolidation of the the company's activities. The Dingo and Palm Valley acquisitions

proved that. The scope for more such activities is there. I favour 2 targets: (a) a mini oil refinery in Alice Springs. That would provide an

almost freight free source of product that would enable CTP to snatch the central Australian diesel market from the current suppliers who bring it

in from Singapore; and (b) a wholesale petroleum distribution network (trucks tanks and similar) to capture the petroleum transport infrastructure

market within a 500 km - or more - radius of Alice Springs. Both of those targets could be achieved with funds loaned by a joint venturer

interested in getting the benefit of CTP's expertise and access to local product.

We won't be seeing $5 - $6 for our shares without the level of success implicit in that vision. These 4 objectives are the degree of achievement

necessary to lift CTP into the $2 Bn + range of market cap. We won't even have a distant prospect of that until we get started on these wider

missions.

We need money to do that.

Have we got the money? That is the burning question. Not on the current state of things.

Cheers.