Central Petroleum (ASX:CTP) increases wells at Mereenie

• Central Petroleum (CTP) has contracted Easternwell Group Operations to recomplete wells and drill new development wells at the Mereenie Oil and Gas Field in the Northern Territory
• The rig is expected at site next month to start the recompletions, and the first development well is expected in May
• The field activities currently produce 32 terajoules per day (tj/d), and the company aims to return production capacity back towards 45 tj/d, with an extra 40 petajoules of gas over the lifetime of the wells
• Central states increasing production will allow the Meereenie JV to commit to new gas sales into what’s predicted to be an “increasingly tight” gas market on Australia’s east coast
• Shares are up 1.9 per cent at 1.9 cents each

Central Petroleum (CTP) has contracted Easternwell Group Operations to recomplete existing wells and drill new development wells at the Mereenie Oil and Gas Field in the Northern Territory.

Rig 27 is expected at site next month to start the recompletions, and the first development well is expected to spud in May.

The company plans to drill the wells vertically, with the same rig being used for the recompletion activities in an attempt to keep costs down and improve operational flexibility.

Once drilled and completed, Central plans to tie the wells in-to the existing gathering network, with gas production expected to be available from the first development before July.

Currently, field activities produce 32 terajoules of gas per day (tj/d). The company hopes to return production capacity back towards 45 tj/d, with an additional approximate 40 petajoules (pj) of gas over the lifetime of the wells.

Central states increasing production will allow the Meereenie JV to commit to new gas sales into what’s predicted to be an “increasingly tight” east coast gas market.

Further, the development activities are part of a long term plan to convert undeveloped proven and probable reserves of more than 40 pj into developed 2P reserves.

Central is committed to cover half of the costs for this program, which it expects to reach $13.5 million over the next two years. The funds will come from existing cash reserves, including proceeds received from the pre-sale of 3.5 pj of gas last December.

Shares are up 1.9 per cent at 1.9 cents each at 3:59 pm AEDT.