Central Petroleum to Expand into Cooper, Otway Basins

Central Petroleum Ltd has penned an agreement with ADZ Energy Pty Ltd to acquire stakes in several onshore Australian oil and gas leases with three to four exploration wells planned for drilling in the next two years.

ADZ is selling 49 percent in 24 South Australian Retention Leases and exploration permit PEL677 in the Cooper Basin, as well as 20 percent of Victorian exploration permit PEP169 in the Otway Basin, to Central Petroleum. ADZ would remain as operator, according to an online statement by Central.

“This strategic acquisition marks a pivotal moment for Central Petroleum, shifting us from a single-basin producer focused on the Northern Territory market to a dynamic, multi-basin E&P [exploration and production] company with immediate oil and gas drilling prospects and substantial long-term growth opportunities”, Central chief executive Leon Devaney said. “Most importantly, this move gives us direct access to the high-value east coast gas market”.

In the Cooper Basin portion of the acquisition, “extensive seismic surveys have identified, among other substantial conventional oil and gas targets, 11 priority oil leads, with two to three exploration wells (to become production wells on success) scheduled to be drilled in late 2026 / early 2027”, Central noted.

“The Cooper Basin is a mature and well-established petroleum province with numerous historic and recent discoveries… The acreage sits around, and is proximal to, multiple existing conventional discoveries, both gas and oil fields”, it said.

“Significantly, much of the acreage has good seismic coverage via a combination of prior 2D and 3D surveys. To date, 17 prospects and leads have been identified, with at least seven prospects considered drill-ready (potentially only requiring seismic reprocessing to mature).

“The initial focus of the Cooper Consolidated JVs will be on the higher value oil and gas targets, with plans to select two to three priority exploration targets to drill by early 2027.

“In a success case, Central’s acquisition cost is expected to be less than AUD 1/boe (based on the three priority targets) which is very attractive given the proximity to oil and gas pipelines and export facilities.

“Further, just one oil discovery could substantially increase Central’s equity liquids production rates.

“Importantly, discoveries in the Cooper Basin can quickly be brought online via a network of existing gas pipelines accessing the high-value east coast gas market, and existing oil pipelines and trucking corridors to established refineries and port facilities”.

PEP169, meanwhile, contains the Enterprise North prospect, “one of the most prospective onshore targets in Australia”, Central said. “EN is mapped on seismic as a fault block immediately to the north of the Enterprise gas field, discovered in 2020.

“The Enterprise field, now producing into the Victorian gas market, is interpreted to spill into the EN structure. EN has seismic amplitude support at the Waarre A and Waarre C horizons. Significantly, all recent Waarre Formation discoveries in the Otway (onshore and offshore) are amplitude-supported, including Annie-1 (2019), Enterprise-1 (2020), Artisan-1 (2021) and Essington-1 (2025). Notably, Amplitude Energy reported a 94 percent success rate across 17 amplitude-supported exploration wells in the offshore Otway.

“Drilling targets, supported by seismic amplitudes, are also the subject of ongoing and upcoming drilling campaigns in the offshore Otway being conducted by ConocoPhillips, Beach Energy and Amplitude Energy.

“EN is ideally located within the high-value Victorian gas market, and land access has been secured close to existing pipelines and three existing processing facilities (Iona, Otway and Athena Gas Plants).

“Given the high historic success rates in the area, the EN well will be designed as a production well, enabling rapid delivery of gas to market in a success case. Consequently, only minimal wellhead facilities will be required to bring the gas online.

“If successful, Central’s upfront acquisition cost is expected to be around AUD 1/GJ (based only on anticipated EN volumes), which is very attractive relative to east coast gas prices.

“Further, Central’s equity gas production rates are anticipated to almost double (upon first gas) in an EN success case”.

The consideration consists of “AUD 9.2m upon completion plus Central’s participating interest share of specified back-costs; AUD 3.9m success payment conditional on commercial success from the planned exploration well at EN; and a five percent royalty on future production from Central’s 49 percent interest in the Cooper acreage”, Central said.

The transaction is subject to consent from Central’s financier and ADZ obtaining “certain security releases”, Central said.

To contact the author, email jov.onsat@rigzone.com