KEYFACT Energy
Central Petroleum today reports a maiden net profit after tax of $3.2 million for the half year to 31 December 2019.
Earnings Before Interest, Tax, Depreciation, Amortisation and Exploration (“EBITDAX”) was $17.2 million, reflecting the strong performance of Central’s gas and oil fields in the Northern Territory.
Highlights for the half year
Step change in operating results compared to the previous corresponding period (halfyear to 31 December 2018):
- Operating revenue increased 78.4% from $20.0 million to $35.7 million.
- Gas sales volumes increased 135%, reflecting the commencement of gas salesthrough the Northern Gas Pipeline (“NGP”) in January 2019.
- EBITDAX of $17.2 million for the half year, up from $2.6 million.
- Net profit of $3.2 million compared to a loss of $19.1 million.
- Successful completion of the four-well exploration programme at the Range gas projectin Queensland’s Surat Basin, resulting in the certification of 270PJ of 2C contingent gasresource (135 PJ net to Central). It is anticipated that the upcoming pilot well programmeand front-end engineering and design will lead to a final investment decision andconversion of 2C contingent gas resources to certified 2P reserves.
- The Dukas-1 exploration well in the Northern Territory’s Amadeus Basin was suspendedat a depth of 3,704m after encountering hydrocarbon-bearing gas from an over-pressurised zone close to the primary target. A forward plan for Dukas-1 is beingformulated.
- Commenced planning a major exploration programme in the Amadeus Basin forCY2020, consisting of five high-graded drillable prospects and two appraisal tests. Theprogramme has an estimated mean prospective resource of 505 PJ of gas and 29mmbbl of oil (risked: 205 PJ of gas and 9 mmbbl of oil). Funding is anticipated to besourced through a farmout process which is currently underway.
- Executed a new joint gas sales agreement (GSA) for the supply of 21.9 PJ of ‘firm’ and‘as-available’ gas over three years from 1 January 2020, partially replacing maturingcontracts. Central has a 50% contractual obligation for gas supply under the GSA, but itexpects to receive the benefit of the majority of the revenue during the first two contractyears, under new portfolio balancing arrangements with its Mereenie JV partner.
- Extended the Group's $72.8 million finance facility for a further 12 months to 30September 2021, subsequent to the end of the reporting period.
Central’s CEO and Managing Director, Leon Devaney said
“Reporting a maiden profit is a significant milestone for our Company, and it is even more remarkable considering that this time 5 years ago we had virtually no production, no certified reserves, and no access to the east coast gas market. Our team has worked diligently over a number of years now to deliver these results and we have built a solid foundation for what is an exciting next phase of growth. Although the short-term gas market remains challenging, we are well positioned with over 10 PJ pa of our sales contracted via long term, fixed-price contracts. This provides us with significant downside protection and allows us to remain focused on advancing both the Range gas project and our 2020 exploration programme which each have significant upside and the potential to drive a substantial re-rating of our Company.”