Central hopes BG shares thirst to explore NTMarija...

Central hopes BG shares thirst to explore NT
Marija Zivkovic
Friday, 5 December 2008
CENTRAL Petroleum says it would like its new deep-pocketed friend, BG Group, to
considerably expand its appraisal of the coal seam gas, underground coal gasification, and
conventional target potential in the Pedirka and Amadeus basins in the Northern Territory.
Speaking to PetroleumNews.net, managing director John Heugh said
Central’s immediate plans for its acreage in the NT have not changed after
Queensland Gas Company (QGC) – which is being acquired by BG – picked
up Central’s joint venture partner Petroleum Exploration Australia (PXA).
Although Heugh could not comment on any definite future activity or plans,
he said Central would like to see a “fairly dramatically expanded appraisal of
the coal, UCG and CBM potential of the Pedirka Basin”.
“At the same time we would like to drill more conventional targets in the
Pedirka and Amadeus basins,” he said.
Heugh added that even though the company had not changed its priorities,
it had to be aware of the fact that BG/QGC would probably want to expand the coal and coal bed
methane evaluation in the Pedirka Basin.
PXA currently has a 20% interest in EP 82, 93, 105, 106, 107, 112, 115, 118 and 125 in the NT. In
order for the company to retain its interest in the permits, it has to fund 40% of the first $3 million in
seismic and 40% of the first three wells in each permit.
This also covers the 19 permit applications that Central has made and could result in PXA being
required to make a cumulative expenditure of about $170 million if all permits were granted and it
chose to retain a 20% stake in each permit.
Heugh said one of the benefits of having BG on board is its supply of cash.
“Obviously BG with QGC has some very deep pockets and if they decide that they want to do
something with us, at least from their side there will be I imagine no problem in supplying the cash
for it,” he said.
“The other advantage of the combined BG-QGC group is that BG brings with it a range of
international expertise not only in non conventional reservoirs but in conventional reservoirs in many
varied geological environments.
“So BG with their international expertise in conventional reservoirs, as well as non conventional
reservoirs, plus QGC’s very detailed experience in coal bed methane and non conventional reservoir
development in Australia, I think, should be a winning combination on the technical front for the joint
venture.”
However, Heugh said aligning with the large organisation has its downsides too, in that BG might
attempt to try and takeover the company if results look promising.
“We would hope that by working cooperatively with BG and perhaps by them expanding the existing
PXA farm-in agreement they will get what they want out of this JV without having to think about
corporate acquisition,” he said.
Meanwhile, Heugh also said the process for the 19 permit applications is proceeding and another 2-3
permits are expected to be granted in the Pedirka Basin by year-end.
“It’s fair to say that we would anticipate that all our remaining 19 applications would be granted,
more than likely sometime over the next one to three years,” he said.