Central Petroleum (ASX:CTP) Q4 2026 Earnings Call

0:01 Good morning and thanks for joining us today. I'm Leon Devaney, Central Petroleum CEO and Managing Director. I'm also joined by our CFO, Damian Galvin. Today we'll review our fiscal year 2026 annual results and provide an update on Central's current and planned activities. We'll start with our fiscal year 2026 annual results before moving on to our current drilling program at Palm Valley. We'll then look at the growth opportunities we're building across our broader portfolio, including our expansion in the Otway and Cooper basins and the exploration program planned over the next 12 months. Taken together, these activities represent an important period for Central as we seek to increase production from our existing assets while also pursuing new opportunities to grow and diversify the business.

0:53 Please feel free to submit questions at any time using the online Q&A facility. and we'll address these, or as many as we can, at the end of the presentation. Finally, before we begin, please take a moment to read the legal disclaimer included with the presentation. With that, let's get started by handing it over to Damian.

1:14 Thanks, Leon. It feels like the 2026 financial year is some way behind us now, but I think it's worth recapping on the progress that we made last financial year and particularly the foundation that sets us for FY2027, and beyond. So strategically and commercially there were some pretty significant achievements. We were successful in securing those new multi-year gas sale agreements which were the catalyst for the feed for the two new Palm Valley wells which we're currently doing and they've got the potential to really boost our revenues significantly. Those gas sale agreements are a huge win for the Palm Valley joint venture given the current uncertainty there is in gas markets and the operational status of the Northern Gas Pipeline.

2:00 Notably, those recent GSAs were only possible because the new gas production from the Palm Valley wells could be brought online very quickly, particularly before the end of this year. So from a growth perspective, we diversified our exploration portfolio. We exited from those high-cost, high-risk exploration permits in the Amadeus Basin and expanded our footprint into two of Australia's proven onshore basins. That's the Cooper Basin in South Australia and the Otway Basin in Victoria. Corporately we commenced our first shareholder return program through an on-market share buyback and we also had some cash settlement of share rights. So overall it was a pretty positive year financially with higher revenues and operating margins.

2:47 The higher revenues were achieved despite lower sales volumes which reflected first half oil offtake constraints and pipeline restrictions along with the usual natural field supply. Despite those lower volumes, our revenue top line increased 3% to $44.7 million. That was supported by the higher portfolio pricing, driven by new supply contracts, including the new GSA with the Northern Territory Government, which started in January. As a result, average realised prices in FY26 increased 10% to $10.10 per gigajoule equivalent, and the average gas price increased by 3%. to $10.38 a gigajoule in the June quarter. These higher-priced contracts have flowed through to higher operating margins, which increased by 5%, to almost $5 per gigajoule equivalent in FY26, and that's an increase of 36% over two years.

3:43 And while our overall gross operating profit was steady at $15 million, we did have a number of exploration related costs which pushed the bottom line to a $4.9 million statutory net loss of the year. The largest item of those was related to the exit from the two Amadi space and exploration permits. So we recognised a one-off non-cash impairment loss of $5.9 million as we wrote off the legacy costs associated with those permits. We also recognised $5.7 million of exploration and appraisal costs. Most of those costs for the preparation of long-lead items for those two new Palm Valley appraisal wells, the first of which is now subsequently drilled. And while normally development wells would be booked as a capital cost, these are classified as appraisal wells because we don't have any reserves booked.

4:35 So our accounting policy requires us to expense those costs, similar to exploration wells. So as a result, those costs show up in our bottom line as we drill the wells. Our net corporate and admin costs for the year were also higher, partly due to the normal cost and salary increases and also non-recurring business development costs of about $900,000. That was driven by rebalancing of our exploration portfolio. We also made some adjustments to the way we allocate staff costs to joint ventures. That resulted in adjustments to previously reported expenses from 2024 and 2025. and it will result in a net reimbursement of $1.4 million. So we've updated our allocation methodology for future periods so that we won't have adjustments like that in the future.

5:26 Off the back of those solid underlying results for FY26 and the cash reserves on hand, we're now set to fund a period of high impact activity. We've got our capital prioritised to increased investment in appraisal and exploration and it's underwritten by our improving free cash flows. I mentioned the new gas contracts earlier and it's worth revisiting those as they really are driving our improved financial and commercial outlook. Now most of you will already understand that we supply into a relatively isolated market in the Northern Territory. We've got the Northern Gas Pipeline to the East Coast markets being closed now for an extended period and Central's been supplying about 50% of the Northern Territory's gas demand with the balance being supplied firstly from diverted LNG and more recently from the Beetaloo gas supply, which has commenced in the last couple of months.

6:19 There is obviously ongoing uncertainty around the supply-demand balance in the Northern Territory market. On one hand, you've got future volumes from Beetaloo producers are unknown. On the other, you've got the impact of the Federal Gas Reservation proposals remain outstanding. So in that context, the new multi-year gas contracts were very important to Central. We've effectively locked away, or locked in, offtake arrangements for 98% of our expected gas production for next year. It's calendar year 27, with a greater proportion of those new higher-priced contracts. And we've got over 80% of expected gas production for the next three years contracted.

7:04 That provides a higher level of confidence for cash flows for at least the next three years, regardless of market conditions. and we also expect to participate in several new exploration wells across the three basins over the next 12 months and Leon will go into those in more depth shortly. Now I mentioned our expectations of improving cash flows previously and that's really coming from our producing fields in the Amadis Basin. We're expecting them to generate increasing cash flows from this year and there's a number of key drivers for that. Firstly, we've got the new gas supply contracts and they provide not only certainty of off-take but also improved margins and that's already been demonstrated in the underlying FY26 results.

7:54 Remember 98% of next year's expected production is already contracted and that's with an increased proportion of higher priced contracts. Secondly, we've got the gas over-lift liability, we've been repaying that back at two terajoules a day since 2020, and it was fully repaid in May this year. So that will release an expected $7 million per year in additional margin and cash flow. And finally, we've got the increased volume from the New Palm Valley Wells. We're targeting the plant capacity of about 14 terajoules a day. At that rate, that would boost Central's production revenues by about 40%. On the slide in the chart, it was illustrated what this might look like on a quarterly run rate basis compared to the previous quarters.

8:43 You can see that we're looking forward to a very significant uplift. That expected additional cash flow when you combine it with our starting cash reserves and our additional bank facilities gives us some financial strength that we need to cover the expected capital demands from the current and the planned drilling programs over the next 12 months. We've got the first of the two Palm Valley wells. It's taken a bit longer than anticipated. We're currently forecasting the total cost of the drilling program to exceed budget by about 5%. We have the opportunity to claw back some of that overrun on the second well, but in any case we've got sufficient resources to cover the expected total cost. And so once the capital intensive drilling programs are complete, which we would expect by this time next year, we anticipate a very healthy free cash flow that can then be considered for allocation towards, among other things, debt reduction, shareholder returns, etc.

9:42 So with that, back to you, Leo.

9:45 Thanks, Damien. Turning now to our Palm Valley drilling program. As shown on the slide, we are halfway through a two-well program that could restore Palm Valley production to the plant capacity of around 14 terajoules per day. Achieving this target would increase Central's total gas production by around 40%. The first well, Palm Valley 14, has been successfully drilled to a measured depth of 2,942 meters, but encountered a water bearing fracture or fractures close to this depth. Three bridge plugs were then set to isolate these fractures, with the last being set at 2,729 meters. A subsequent short duration test measured gas flow of approximately 3.2 terajoules per day, and indicated initial gas production of around 3 to 4 terajoules per day once tied into the existing network.

10:41 This indicative result is below expectation and the initial rates achieved from recent Palm Valley wells. However, a short duration rig test is not necessarily a reliable indicator of long-term production performance. At this time, Palm Valley 14's ultimate performance remains uncertain, but we will get a clearer picture once the well is commissioned and producing through the surface facilities. It is worth noting here that the Palm Valley gas production depends almost entirely on intersecting natural fractures, which vary considerably in number, width, and length across the field. Some of the larger fractures, which extend to great depths, may act as a conduit for formation water, which can constrain or prevent gas production at any stage of the well's life.

11:30 None of these factors can be fully assessed from a short-duration rig-based flow test, which is why we need to wait for results from the steady-state production. By way of comparison, the PV-12 well, completed in July 2022, initially encountered water when drilled, but after setting isolation plugs, the well cleaned up and has now been producing reliably for over four years. Despite the risks and uncertainties, drilling at Palm Valley remains an attractive investment. Existing spare plant capacity means the marginal cost of additional production is low, Importantly for Central, bringing new Palm Valley gas into the Northern Territory market via PV-14 and PV-15 before year-end allowed us to secure a long-term gas sale agreement with the Northern Territory government and that will underpin our forward cash flows through 2034. To put Palm Valley 14 into context, An initial flow rate of 4 terajoules per day, assuming a typical Palm Valley decline rate, would provide a payback on the current forecast well cost in around three years and recover almost half of that cost by the end of next year.

12:52 With some Palm Valley wells producing for more than 10 years, this well can still deliver attractive economics even at these lower initial production rates. The wall has now been completed and tie-in activities are underway, with commissioning expected before the end of October. Once PV-14 is online, we will have a much clearer view of its production potential. The rig is now moved to PV-15, which we expect to spread over the next few days. Importantly, we do not believe that PV-14 results change the risk profile for PV-15. PV-15 is located approximately three kilometers away and targets the southern flank of the field rather than the northern flank, which was targeted by PV-14.

13:41 It is also closer to the crest of the structure and further upped it from possible water sources. PV-15 will be only the second well after the successful PV-12 well to directly access the southern flank. We remain confident that a good result from PV-15 would still achieve our target of restoring Pond Valley sales capacity to its plant capacity of approximately 14 terajoules per day. Turning now to our broader growth portfolio, over the past year we have taken deliberate steps to diversify Central beyond our existing Amadeus Basin operations and established positions in two proven Australian petroleum provinces.

14:28 The onshore Otway Basin in Victoria and the Cooper Basin in South Australia. We hold a 20% interest in PEP169 in the Otway and a 49% interest in PEL677 leases in the Cooper. The attraction of these areas is straightforward. Both basins have a long history of successful petroleum production, extensive technical data, and established infrastructure. This provides us with potentially lower cost exploration opportunities, and in the event of success, shorter and more direct routes to market. We currently have three exploration wells planned across these two basins in 2027.

15:15 subject to joint approval, obviously. These wells will give central exposure to both gas and oil opportunities, while also providing access to the larger and higher-value southern and east coast markets. It is an important evolution in our portfolio. We retain the cash-generating strength and near-field upside of our northern territory assets, while adding exploration opportunities in established basins where success could materially increase our reserves, diversify our revenue, and create the next phase of growth. We'll now look at each of these new basin positions in more detail. One near-term growth opportunity is the Enterprise North Prospect where a well is planned for 2027, subject to joint venture approval.

16:06 Enterprise North is located approximately 2.5 kilometers up-dip from and along the interpreted spill path of the producing Enterprise gas field. It is also supported by seismic amplitude anomalies, which provide additional technical support ahead of drilling. The primary target is the Warry C formation, a well-established and highly productive reservoir in this part of the Otway Basin. Nearby discoveries have demonstrated permeability above 1,000 millidarces, with Enterprise One flowing at more than 50 terajoules per day during testing. Just as importantly, the prospect is close to existing pipelines and the Iona, Awai, and Athena gas processing facilities.

16:54 That infrastructure provides potential routes to the Victorian gas market without a significant capital expenditure, usually required to create entirely new development corridors. Enterprise North is targeting up to 79 billion cubic feet of gas in place, of which approximately 16 billion cubic feet would be attributable to Central's 20% interest. These volumes are prospective and unrisked, and drilling is required to determine whether a recoverable accumulation exists. Nevertheless, success at Enterprise North could roughly double Central's annual equity gas production and provide a material new source of gas close to an important domestic market.

17:43 Another near-term growth opportunity is the Cooper Basin. Vancouver is one of Australia's most established petroleum provinces with a long history of oil and gas discoveries and an extensive network of pipelines, processing facilities, and oil export infrastructure. Our acreage was relatively under explored during its suspension between 2016 and 2025, but it benefits from extensive existing seismic coverage. Earlier this year, a significant amount of this seismic data was reprocessed and reinterpreted to support re-ranking of these various reservoir targets. The JV has previously identified 17 prospects and leads across the acreage with at least seven considered close to drill ready, subject to completion of this target selection review.

18:36 The JV is now finalizing plans to drill two exploration wells in 2027, subject to joint venture approval. The initial program is expected to focus on the Birkhead Oil and Catawara gas targets. Both are proven Cooper Basin plays and provide additional diversification in basins and commodities. Existing infrastructure in proximity to our Cooper assets is a significant advantage. In the event of success, oil can potentially be transported using established trucking and export arrangements, while gas may have access to existing pipeline networks. This can reduce the capital and time required to commercialize a discovery.

19:21 Cooper position therefore complements our assets in the Amadeus Basin. It introduces exposure to potential oil reserves and global liquids markets. while retaining gas upside in the basin with well-established routes to market. It is a disciplined entry into a proven region with multiple follow-up opportunities if the initial wells are successful. Bringing all these activities together, we have a busy program ahead of us. As I covered on Palm Valley, PV-14 time is underway and commissioning expected in the next couple of weeks. PV-15 will follow as a second well in the campaign, and we hope to have it online by the end of the year.

20:06 Together, the wells are targeting total Palm Valley sales capacity to approximately 14 terajoules per day on a 100% joint venture basis, although actual production will depend on individual well performance and natural field decline. We are currently producing about 5.5 terajoules per day at Palm Valley, So we need initial production of around nine TJs per day in aggregate from PV-14 and PV-15 to achieve that. During 2027 and subject to joint venture approval, we're planning to drill the Enterprise North exploration well in the Otway Basin and two exploration wells in the Cooper Basin. As I mentioned, these provide material, gas, and oil upside with established routes to key markets.

20:56 Beyond that, the growth program includes the potential drilling of a sub-salt well at Mount Kitty in early 2028, again subject to joint venture approval. This prospect provides potential exposure to helium, hydrogen, and natural gas in the Amadeus Basin. We are continuing to seek farm and partners for Mount Kitty in order to mitigate our cost and risk exposure. Importantly, all of these growth activities are supported by a strong financial base. The repayment of the gas overlift position has released more than $7 million of annual cash flow, while new multi-year contracts provide improved revenue visibility. Central ensures these programs more financially resilient with a diversified exploration portfolio and a potential series of near-term drilling catalysts.

21:51 That wraps up the formal presentation. So at this point, we're happy to answer any questions that have been submitted online.

22:00 Thanks. Thanks, Leon. We do have some questions coming through. So we might get started on those. So first of all, this is the one we probably get fairly regularly.

22:14 When will dividends be paid? Well, that's a good question. A lot of people are interested in that, obviously. We're currently going through a significant phase over the next 12 months of capital-intensive activity, obviously, with the Palm Valley wells and the exploration wells in the Cooper and Otway. The expectation is once we're through that capital spending phase around mid-next year, We should then be in a really good position to assess where we're at and be able to consider things like debt reduction and share all the returns. So really for the next 12 months, I think we're going to be focused on delivering what we have on our plate.

23:05 But it is our intent, and one of the things that the company is specifically doing focused on is maximizing cash flow, conserving costs during this period, so that when we come out of this capital spending phase, we're in a very good position to return cash flows and cash reserves back to shareholders, either through debt reduction or dividends.

23:33 Okay. Now, honestly, Leon, with the share prices sort of being a bit depressed for a little while now, there's a couple of questions on that vein. I might try and combine those together. So there's one here that says, over the last five years, ASX oil and gas index has moved up 31%. During that same period, central shareholders have seen their investments down by 60%. How does that sort of relate to the incentives that management receive? And there's a second one on a similar vein.

24:08 Yep. It's obviously something we follow. It's been a very difficult period for the sector and our peer group in particular. I would highlight that over the past five years, we have really been focused on improving the business, improving the fundamentals of the business and setting it up for future success. We've done a lot of things that are under the surface, the hard work. Some of those were reducing the liabilities and paying those off. We put in place some very significant, important new gas contracts that will be coming more and more visible as we go forward from here.

24:53 They've started to become visible, and Damian did talk to those. We've certainly high graded our exploration portfolio. We're looking to consolidate and save costs there, but also give us a much better chance for lower cost, high impact growth. And as I said before, we're very focused and have been for some time on maximizing those cash flows. So when we come out of this capital spending phase over the next 12 months, we're in the best position to be able to start looking at those return to shareholders Ultimately, we need to deliver what's on our plate, and that is the Palm Valley Drilling Program. We're in the middle of that. It is a challenging program.

25:41 We need to finish up the second half of Palm Valley 15 and get a good result there, which we're looking forward to. But we also have the planned exploration in the Cooper and Otway. and catalysts for share price growth with the company. Beyond that, I think we're going to start seeing the visibility of that hard work we've done over the past five years come to light. And I think as the market sees financial strength of the business and the ability of this business to produce operating free cash flow, I think at that point there'll be further recognition of the potential for the company to certainly start returning value to shareholders or returning capital to shareholders through dividends.

26:37 And, again, debt reduction and acceleration of the debt reduction is something that is on our plate as well. That's probably the best sort of summary I can give on the status on that.

26:55 Another corporate type question. Will management or the board look to buy shares on market and support the company rather than just filling their pockets while shareholders suffer poor returns for the 20 years to date?

27:08 Yeah, I think both the board and management have a program in place to ensure that we have significant exposure into the equity of the business. And we do that through our long and short-term incentive plans. Those are recalibrated every year, so there is certainly that exposure and incentive. That adjusts with the share price, and to put that into some perspective, the current ones we have vest at share prices between 12 and 16 cents, so significantly higher than the current share price, and that provides obviously not only the incentive but certainly the alignment between management and shareholder expectations. So I think that is there.

27:59 Management and the board have in the past bought on market, so it's not a new thing. But I would highlight that for a majority of the time, we typically are not able to buy or sell shares in central because we have inside information. We're working on material activities that could impact the share price and therefore were locked down under ASX restrictions from transacting. But again, it's something that certainly could be possible and has been done in the past.

28:38 Okay. On pertaining to the current drilling program at Palm Valley, this question might have come in before you got to it in your presentation, but I'll read that anyway. So, please update on the two wells, 14 and 15, and issues with the water. and the amount of wells that you're looking forward in 26 to 28, you're expecting to do?

28:59 Yes, I obviously covered that, hopefully in enough detail during the presentation. Plum Valley 14 did hit water at the end of the lateral. We have spent a bit of time plugging that back and isolating that water, and we hope that is the case. Obviously, we don't know both the performance, and the effectiveness of those plugs until we bring that well online on a steady state. And we expect to have that situation and having those wells producing into the facility over the next couple of weeks. So we'll know a lot more at that point than we do at this point.

29:46 But that's been a difficult well. I think we've given it the best shot to be the best producer we can, but the jury's still out on that, and we look forward to seeing where that goes, and we're optimistic we can get, ultimately, a good result from the flow rates from 2014. The rig has now moved to 2015. We think that has the opportunity to be a very strong well. It is targeting the same side of the flank, that PV-12 has, which was very successful. And it is further up on the crest, away from water relative to PV-14. So there's some things that we think are encouraging that we believe could give it a much better outcome. But again, it is a field that's got a lot of uncertainty, very difficult to predict the outcomes.

30:43 The wells can be very productive, very lucrative, very economic, so it's worth the investment, worth the risk. But again, we're just starting in on that well and all things going to plan. Hopefully we'll come out with a very strong result and we do hit our target of 14 TJs per day out of the Palm Valley facility. Besides that, we've got the exploration wells that We're looking at with our joint venture partner, ADZ, they are the operator, and we obviously feed in and work with them on that program. We're working towards having the Enterprise North well and two wells in the Cooper completed around mid-year, if not sooner. And we're certainly focused on ensuring that we get the best outcome from that and also Keep a lid on costs. Costs have obviously been an issue across the board for everyone operating in this economy, particularly drilling, particularly in the NT, for exploration companies that are performing these sort of tasks.

31:59 But, you know, I think that's tracking well, and we're very hopeful for a solid, positive outcome from those exploration activities.

32:09 Okay, so there's a question here, Leon, just around, if Palm Valley 15 and 14 combined don't provide nine terradules a day, will you need to drill another well to fulfil the Palm Valley contract?

32:22 No, we've structured that contract to be very flexible, both in terms of the volume that we can commit to that GSA, so we're able to put the wells online, we're able to get a good track record of production over time from those wells before we commit to longer-term production on a firm basis. And again, that is in tranches. So, as we see more information, we have an opportunity to readjust those so that they fit the production profile. But further to that, we also have the ability to make up any shortfalls or gaps in the commitments we have under under the GSA or the Northern Territory Government, we can make that up from production that we do have out of Marini if necessary.

33:17 Okay. So another question is around those wells, the Palm Valley wells. How much of central's capital will be spent on the Palm Valley wells?

33:26 So we put some cost figures in there. I think the total program is in the order for both wells in the order of $50 million. We're a 50% interest in Palm Valley, so that's 25. PV-14 has had some cost pressures, and we are over budget on that well, particularly with respect to dealing with the water and some of the other challenges that we faced, which have extended the rig time. We are moving, obviously, into PV-15, and we hope that program goes a lot smoother, and there's the opportunity to make up some ground and reduce costs and come in under budget on that well, which would offset it.

34:11 But I think Damien spoke to that. It's about 5% on the total program over budget at this stage.

34:20 Yeah, that's right. One last question just around our drilling program. Could well development progress be made, I guess, announced more often at timely periods? I guess it's just around our schedule of six now.

34:35 Yeah, I've received some feedback from shareholders about the frequency of announcements. There's a few things in that. Obviously, we want to keep the market informed. We do want to be able to put forward announcements that are not, I guess, speculative, and we don't know what the results that we're getting today really are. We have an established program of announcing these wells, which we undertook and did with the Marini program a couple of years ago, which we seem to have worked well for both ourselves and the market, and we're following that program now. We do need to be conscious that we have a number of joint venture partners as well, and we need to coordinate with them and get alignment in terms of how and what we announce.

35:38 A good example of that is this PV14. Had we been announcing the status and the situation of PV14 along the way, we would have had to continually be updating and adjusting that as the fluidity of the situation unfolded, both in terms of the water and the activities that we're undertaking to manage that. So we do have specific milestones that we are currently in agreement with our joint venture partners in terms of when we announce. If there is something material that does happen that we have reasonable confidence, we understand we will probably make exceptions, I would expect, to Short of that, I think we've got a schedule very similar to the marine wells that we'll stick to at this point.

36:41 Okay. All right, other wells. So when will the first well in – or first new well in South Australia, Victoria prospects likely be drilled?

36:52 So the ADZ program, both the Enterprise North and the Cooper Basin and – Both of those programs are slotted for the first half of next year. We're targeting by the end of the financial year, so 30 June. Obviously, a safe date to put on it is mid-year, and that's what we're working towards at this point. It's important to recognize that we've got some work to do to get there. It is achievable, and we are driving towards that timeframe. but it does require joint venture approval. At this point, everyone seems aligned on that timing, so that's our current expectation is have these wells drilled or under way, certainly by mid-year.

37:47 Okay. So other wells, Mount Kitty, for example, a question here. Would you say that you'd be in a position to fund Mount Kitty drilling from the balance sheet rather than farm out?

38:00 At this point, we are comfortable with our cash reserves and our debt facility funding the programs that we've talked about today, being PV14 and the Cooper and Otway Basin programs. We could work to get additional funding in place for Mount Kitty if we chose. At this point, and continue to look for a farm and partner to both share the cost but also the risk of that well. Those sub-salt wells are very significant drilling programs, very expensive, high risk, and in the context of, and I mentioned this earlier, in the context of trying to preserve capital, maximize cash flows, so that coming out of this phase of capital-intensive spending over the next 12 months, we're in the best position to then start looking at things like early debt repayment and shareholder returns, which is something we're very keen to initiate as soon as possible.

39:19 So the answer is yes, in theory, we could – do a number of things to be able to fund that internally without farming out. But at this point, our real focus is finding a farming partner to share that risk.

39:36 Okay. Well, I've got a few questions now more around the market side of things. The first one here, for uncontracted future marini volume, are you currently working to sell that? Also, do you expect Betaloo production to restart the flow of the NGP, the Northern Gas Pipeline?

39:54 Yep, so we are, as we talked about, we've got a very good contracted position over the next few years. I think we've got 82% of our volume contracted over the three-year period. So that provides a really good base for us to weather any of the turmoil that has been and continues to be prevalent in not just the East Coast market but the NT market. We are out marketing longer term. There's been, obviously, a lot of press on the domestic gas reservation. What I will say about that, obviously, I don't think that's going to be an effective policy.

40:46 I think there's some incredible flaws with it. motivated. So I don't see that being effective. I think we all agree that we'd like to have the Australian consumers have access to reliable and low-cost gas. We're on board with that. But the policy they put forward, I don't think will achieve it and could actually have some significant unintended consequences over the medium and longer term for the gas market. What I would highlight, though, is Central is well-placed to manage any of these distortions, and it's largely because we're an established producer in the Northern Territory. We've got existing infrastructure, and importantly, our marginal cost for production is very low.

41:45 I think the greater risk from the market disruptions, the market changes that we're starting to look at at this point in time from the domestic reservation policy. I think the larger risk is for those emerging projects and the new basins that are trying to get off the ground because they require substantial capital and they do need confidence in a strong long-term gas price, which this obviously does not support. So I think central is relatively... relatively in a much better position to weather and manage and strategize around the current market dynamics that we're seeing compared to some of the others in the market that we'd be competing with. But it is fluid.

42:36 It's ongoing. It's one of the things that we are focused on. We've had success in the past in terms of our marketing strategy, and I think the gas prices that are starting to become visible today reflect that success. We're looking to continue with that success. We're looking to be very proactive and insightful in terms of how we implement our gas marketing strategy, how we sell the uncontracted gas we have after that three-year period. And I have no doubt we'll certainly optimize the value of that gas no matter what market conditions come our way.

43:22 Thanks, Leon. There was another question on gas reservation. I think you've covered that pretty extensively now. So just one more question here. Is talk about use-it or lose-it law changes putting other prospects at risk?

43:38 Well, I think that use-it or lose-it has been an idea that's been around for quite some time as a reaction to getting new gas supply. I think the current domestic gas reservation... is incompatible with that concept because to invest in bringing new supply to market, as I mentioned, requires significant capital and significant confidence in long-term gas prices, which this current proposed policy doesn't provide. And I suspect if push comes to shove, people might not... decide to keep and progress permits that just don't appear to be worth the risk return profile in the current state of the market that we're currently seeing.

44:32 So it's been something that's there. We'll see how that unfolds as well, but there's so much uncertainty and confusion currently in the current policy. I think there's going to be a period where that needs to get sorted. We need to understand Hopefully, the government sees that the potential unintended consequences of what they're trying to do are significant and that the policy that they're putting in place, while it might be a short-term political win, so to speak, it's certainly not constructive for both gas suppliers and gas consumers in the medium and longer term.

45:21 Well, that's all the questions. I think we've combined a couple together, just so Leon didn't have to give you the same answer twice. But thanks for all those questions.

45:32 Great. Appreciate everyone's attention and look forward to updating you as things progress on our Palm Valley drilling program. Thank you. Thank you.