ROYAL Dutch Shell and PetroChina's $3.3 billion bid for Arrow Energy makes this a good week to raise money if you are in the oil and gas game. Which brings us to Central Petroleum, a Perth junior with hopes of finding oil in central Australia.
Central is chaired by Henry Askin, who spent close to 25 years working for Shell in different parts of the world, and is the midst of raising capital with the help of Patersons. The company hopes to raise $22 million through a one-for-two rights issue priced at 7.5c.
This compares with its last traded price o f 10.5c. The extra cash will be used to fund phase two of its exploration program in the Northern Territory's Amadeus Basin. It's a high risk/high reward punt, but one thing Central is not short of is ground, with almost 250,000sq km of acreage in which to drill holes.
The region was explored in the 1960s by the likes of Total, Santos, Beach Petroleum and North Broken Hill but was considered uneconomic. Central argues that the commissioning of a rail link to port facilities in Darwin, and higher oil prices, have changed that.
CTP Price at posting:
10.0¢ Sentiment: Hold Disclosure: Held
