Slide 1: Closing the Gap (Gas Acceleration Programme)
For personal use only CLOSING THE GAP (Gas Acceleration Programme) Mitigating the Australian Energy Crisis “Never let a good crisis go to waste” – Churchill NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES
Slide 2: Project Locations
PROJECT LOCATIONS MEREENIE 50% For personal use only PALM VALLEY 100% OORAMINNA 100% DINGO 100% 2
Slide 3: The Story So Far
THE STORY SO FAR Preparatory work on Gas Acceleration Programme (“GAP”) aimed at a low-risk cost-effective drilling For personal use only programme with the objective of substantially increasing our potential sales gas available for the east coast. Oct March Aug April June Sept Nov 2013 2014 2014 20
Slide 4: The Story So Far (cont.)
THE STORY SO FAR (CONT.) Closing the GAP still to come… For personal use only April June Aug Dec Jan April July Jan-Jun Dec 2016 2016 2016 2016 2017 2017 2017 2018 2018 ACCC Inquiry Gas Sale and COAG Vertigan Macquarie EDL contract Update Drilling NGP operational released Pre-purchase Commission rec
Slide 5: Operational Update
OPERATIONAL UPDATE For personal use only Consideration Update Stairway Testing • Continued through 2017: programme − West Mereenie 15 free flowing gas from Stairway at sustainable rates with a low nitrogen content of 2.6% − Palm Valley natural fracture modelling underway Dingo Upgrade - • TEG unit b
Slide 6: Commercial and Strategic Update
COMMERCIAL AND STRATEGIC UPDATE The GAP is based on brownfield economics using existing infrastructure enabling “success” to be sold and gas For personal use only delivered. Consideration Update Reserves and cash • Targeted Reserves 446 PJ (Most Likely and Existing) • Cash balance at the end of the
Slide 7: Other Recent Developments
OTHER RECENT DEVELOPMENTS For personal use only Development Update Mereenie • Central and Macquarie have agreed to the future joint marketing subject to ACCC authorisation marketing • ACCC interim approval sought agreements Pipeline Reform • COAG has endorsed a process to put downward pressure on pi
Slide 8: Other Recent Developments
OTHER RECENT DEVELOPMENTS For personal use only Development Update Non-cash • As noted in the June 2017 Quarterly Activities Report lodged on 27 August, Central made a non-cash accounting adjustment under AASB 139 to financial profit of approximately $9.5m1 for the 2016/17 financial adjustment year
Slide 9: Reserves Potential
RESERVES POTENTIAL • Present 2P Reserves are 125.9 PJ and, under GAP, have identified three targets where known gas exists in the For personal use only zone. These targets can be appraised by a $25 million four horizontal well programme with no intention of fraccing No. of Wells Gross Potential Net
Slide 10: Reserves and Resources
RESERVES AND RESOURCES1 1 Mereenie Stairway2 Low Most Likely High For personal use only Best Estimate EUR Gross (PJ) 110 145 186 Best Estimate EUR Net (PJ) 55 73 92.5 2 Palm Valley Shallow3 Low Most Likely High Best Estimate EUR (PJ) 83 127 165 3 Ooraminna4 Low Most Likely High Best Estimate EUR (PJ
Slide 11: Most Likely Reserves
MOST LIKELY RESERVES • The combined total Most Likely1 volume as highlighted are: For personal use only GAP 500 400 300 PJ 200 100 0 Gross Reserves Non-Central Reserves Net Reserves Existing Reserves Total Reserves 392 PJ (72 PJ) 320 PJ +126 PJ 446 PJ • There remains a risk that any or all three pro
Slide 12: Other Exploration: Amadeus Basin (Santos JV)
OTHER EXPLORATION: AMADEUS BASIN (Santos JV) Frontier sub-salt play – Multi-TCF gas potential For personal use only 12 Source: Santos 2017 Investor Day Presentation – 9 November 2017
Slide 13: ACCC Inquiry into the East Coast Gas Market - 2016
ACCC INQUIRY INTO THE EAST COAST GAS MARKET - 2016 For personal use only New Capital Investment Required Now Chart 1.1 Source: ACCC Inquiry into the East Coast Gas Market Report • Sufficient gas is available for existing domestic and LNG contracts through 2018 • Undeveloped supply needs to be brough
Slide 14: ACCC Inquiry into the East Coast Gas Market - 2016
ACCC INQUIRY INTO THE EAST COAST GAS MARKET - 2016 For personal use only New Capital Investment Required Now The ACCC forecasts already include significant destruction in industrial energy customers and a significant pull back in gas generation. A gas supply shortfall will cut beyond what has alread
Slide 15: ACCC Gas Inquiry 2017-2020
ACCC GAS INQUIRY 2017-2020 Chart 2.4 – Forecast supply-demand balance in the East Coast Gas Market for 2018 (based on AEMO’s upper band For personal use only domestic demand. ∆ 383 PJ New Capital Investment Required Now 15 Chart 2.4 Source: ACCC Gas Inquiry 2017-2020 Interim Report (Sep’17)
Slide 16: 2022 - Hindsight
2022 - HINDSIGHT The Real Crunch to Australia will be in 2022 when: For personal use only • LNG spot market equals or exceeds long-term pricing • Liddell closes. The volatility in gas price must be accompanied by supply chain flexibility to allow independent “futures” market. Electricity companies w
Slide 17: CTP's Position
CTP’s POSITION For personal use only • Fully funded four hole appraisal programme over three fields in first half of 2018 • Brownfield development with historical capacity of 70 TJ/day (Gross) in the existing plant, with NGP having 60 TJ/day capacity available in late 2018 • If drilling confirms pro
Slide 18: Milestones – CTP is Perfectly Positioned
MILESTONES – CTP IS PERFECTLY POSITIONED For personal use only 2017 Q3: • Fundraising for drilling Completed • Joint Marketing Agreement with Macquarie Agreed Q4: • Interim approval from ACCC • Joint Venture approval for Mereenie campaign • Regulatory approval to be obtained 18
Slide 19: Milestones – CTP is Perfectly Positioned
MILESTONES – CTP IS PERFECTLY POSITIONED For personal use only 2018 Q1: • Drilling at Mereenie Q2: • Drilling at Palm Valley and Ooraminna • Marketing of gas for new reserves Q3: • Reserve certification process commenced • Sales contracts Q4: • NGP commissioned • Gas delivered into east coast market
Slide 20: New Directors
NEW DIRECTORS For personal use only Martin Kriewaldt was appointed to the Board effective 23 October 2017 and is up for ratification at the AGM. Martin is a Life Fellow of the Australian Institute of Company Directors (AICD), a former recipient of the AICD Gold Medal with a highly regarded history o
Slide 21: Notice and Legal Disclaimer
NOTICE AND LEGAL DISCLAIMER To the maximum extent permitted by law: For personal use only 1. This presentation is not intended for prospective investors and does not purport to provide all of the information an interested party may require in order to investigate the affairs of Central Petroleum Ltd