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Central Petroleum reports half year results


Central Petroleum today reports a net profit after tax of $2.5 million for the half year to 31 December 2020, continuing solid financial performance despite the market downturn experienced in 2020. This is up 15% on the previous half year due to lower exploration activity, corporate cost savings and lower interest and depreciation charges. Earnings Before Interest, Tax, Depreciation, Amortisation and Exploration was $12.9 million. This is an increase of 51% on the previous six months to 30 June 2020 excluding the benefit of the $7.7 million settlement for the transfer of a 50% interest in the Range CSG Project, reflecting our effective term-gas contracting strategies, cost containment initiatives and solid operations at Central’s gas and oil fields in the Northern Territory.

Highlights for the half year

  • Sales of oil and gas were steady at 5.11 PJE for the half year, compared with 5.19 PJE sold in the previous six months to 30 June 2020, but 28% below December 2019 half year levels due to weak market conditions in 2020 and timing of scheduled maintenance.
  • Operating revenue was $28.9 million, slightly lower than the $29.3 million recognised in the previous six months to 30 June 2020, but 19% lower than the $35.7 million in the half year ending December 2019 due to a significant downturn in the oil and gas markets in 2020.
  • A new Gas Supply Agreement was secured to supply 3.5 PJ of gas over calendar years 2022 and 2023. The sale proceeds were pre-paid in full in December 2020 and will help finance new production capacity at Mereenie in 2021.
  • Stronger cash position of $38.5 million, up from $25.9 million at 30 June 2020 following the receipt of the pre-sale payment, reducing net debt to $31.2 million, down from $46.1 million at 30 June 2020.
  • Extended the Group's fully-drawn finance facility of $68.8 million for a further 12 months to 30 September 2022.
  • Restarted work on the Range Coal Seam Gas Project in the Surat Basin, with a three well appraisal program to be drilled commencing in April 2021.
  • Executed a Memorandum of Understanding with Australian Gas Infrastructure Group with the aim of becoming a foundation customer of a proposed new gas pipeline from Central’s Amadeus Basin fields to the Moomba gas hub, potentially providing a more cost-efficient route to the larger east coast gas markets.
  • A preferred bidder for an interest in Central’s Amadeus Basin producing assets was selected and began conducting final due diligence.

Welcomed Michael (Mick) McCormack to the Board and his subsequent appointment as Chair, bringing to Central his experience as one of Australia’s energy industry leaders.

Central’s CEO and Managing Director, Leon Devaney said,
“Our production assets and contracting strategies have shown their quality in sustaining Central through the market turbulence of 2020. We see market confidence improving, and believe we are in a strong position to move forward with several important growth projects in 2021.”

“New wells planned to be drilled at Mereenie should increase production capacity on completion and the pilot wells at the Range Coal Seam Gas Project will take us closer to a Final Investment Decision for our next major development. And finally, our most significant exploration program for years has the potential to unlock major new resources in the Amadeus Basin.”

“We anticipate a comparable EBITDAX for the second half of the 2021 financial year assuming trading conditions remain stable. Exploration expenditures, however, are anticipated to increase substantially this calendar year as we implement several growth strategies”. 

KeyFacts Energy: Central Petroleum Australia country profile

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