central?s plant gets $5b valuation

Central?s possible GTL plant gets $5B valuation
Thursday, 1 September 2011
INDEPENDENT assessors have tipped Central Petroleum?s upstream assets to be worth
$412 million, while Central?s preferred downstream development of a gas to liquids plant
could be worth $5 billion.
The assessment is based on the assumption that Central can come up with
the 5 trillion cubic feet of gas it would need to make the GTL plant a
reality.
DSWPET previously said Central could be sitting on prospective mean
resources of 59 trillion cubic feet of gas and 6.1 billion barrels of oil in the
Southern Georgina Basin.
Central was keen to stress the estimates were based on very preliminary exploration of
unconventional assets Australia-wide, and said it would reassess once more transactional,
exploration and possible production data became available.
Managing director John Heugh said the company would be looking to farm-out its acreage
piecemeal, trying to avoid a broad acre deal with one company.
?Interest in Australia?s unconventional acreage and recent farm-in deals into unconventional
acreage have escalated considerably which has been confirmed with the BG Group?s farm-in to
Drillsearch?s Cooper Basin acreage imputing a valuation of approximately $300 [per] net acre,?
Heugh said.
Interest in Australian unconventional assets has been a keen talking point lately, with Lloyd?s of
London confirming in early August that it is helping US companies look for opportunities to invest
in the sector.
Managing director and global head of oil and gas Andrew Moorfield reportedly told Bloomberg the
bank was in active discussions with a number of US players about getting into the Australian
shale game.
?Financing discussions are well progressed across a range of our offices with companies looking to
enter shale gas,? Moorfield said.
?What we?ll see is steady foreign investment into shale gas in Australia, and that investment will
primarily come from the US.?
According to the US Energy Information Agency, Australia has the potential to hold 400 trillion
cubic feet of gas in shale formations.
Heugh said the Drillsearch deal was so lucrative because it had proven up the resource, and this
could be the key to achieving higher prices in Australia.
?Clearly, if further exploration brings success, the implied valuation of farm-out deals per net acre
of promising Australian unconventional acreage may gravitate closer to the far more lucrative
North American valuations,? he said.
Central said it would look to selectively farm-out portions of its acreage to different companies on
successively better terms as exploration success in and around the company?s acreage helped
drive up land prices.
On the drilling front, Central aims to re-enter its Surprise-ST1 well late this month to speed up a
program over the next 6-12 months focused on the re-entry and testing of the well, which has 10
million barrels of oil in place on a P50 basis.
Central aims to test both the conventional and unconventional horizons of the well.
Other wells planned before year?s end include the drilling of Kitty-1, a condensate and gas
prospect and the drilling of Madigan-1, the first well on a ?giant structure? in the Perdika Basin
thought to have oil in place potential of more than 4 million barrels based on preliminary mapping
of new seismic acquired in 2010.
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