Central Petroleum raises A$5m to commence exploration program

Perth exploration and production company Central Petroleum (ASX: CTP) has raised $5 million through a placement of 91 million shares at $0.055 per share to progress the company’s liquids focussed drilling program and to provide working capital.

The funds have been raised ahead of a planned Toronto Stock Exchange listing to align it with other central Australian focussed TSX listed companies with comparable acreage positions and resource potential.

The company plans to commence  drilling of up to three wells at Surprise-1 in the Amadeus Basin in mid-September 2011.

The wells will test Surprise-1 for oil potential in both conventional and unconventional horizons, followed by the drilling of the 4 Billion barrel Madigan prospect (P50 UOIIP) in the Pedirka Basin and the 2 TCFG Mt Kitty prospect (P50 UGIIP).

John Heugh, Central’s managing director, said “despite the volatile market conditions it has been particularly pleasing to see the company getting offshore and Australian institutional support in the lead up to our TSX listing.

"We look forward to the planned re-entry in a few weeks of the Surprise-1 well which has already been independently assessed as having potential in one 9m cored section alone to flow 500-1,000 bbls per day subject to logging and flow testing.”

The placement was made to institutional, sophisticated and professional investors and was managed by Patersons Securities Limited.

Settlement of the placement is scheduled to occur on 21 September 2011, with the new shares expected to be quoted on that date.

In order to give existing shareholders an opportunity to invest, Central intends to offer shareholders the right to participate in a Share Purchase Plan (SPP).

The SPP is planned to be underwritten by Patersons Securities Limited for $5.5 million.

The record date to participate in the SPP was 14 September 2011, allowing shareholders who have acquired Central shares up to and including Thursday 8 September 2011 to participate in the SPP.

About Central Petroleum

Central Petroleum has extensive granted and pending tenement acreage in Central Australia, totalling over 70 million acres, predominately in the Northern Territory, almost entirely 100% net owned.

Within this acreage large resources of oil, natural gas, helium and coal have been identified and/or inferred by independent geological assessment.

These resources are located within four main geological structures; the Amadeus, Pedirka, South Georgina basins and the Lander Trough of the Wiso Basin.

Central Petroleum has identified a number of oil and gas prospects in the already-producing Amadeus Basin and in the Pedirka Basin which could be brought to market relatively quickly following further drilling to determine the full extent of the resources.

Central said the Mt Kitty prospect is anticipated to host condensate as well as helium, a valuable gas originally discovered in the sub-salt Magee prospect in the Amadeus Basin in 1992 (Magee-1).

Canadian and U.S. companies are leading the charge in the examination of unconventional resources in central Australian frontier basins.

Exploration and farmin plans announced by Rodinia Resources, Hess Exploration, PetroFrontier (CVE: PFC), TME Resources and others have excited interest in these very large regional frontier basins.

Central is considerably undervalued in the central Australian context and Bakers Investment Group recently placed a valuation of $0.48 per share on Central Petroleum, eight times its current value, and recommend it as a STRONG BUY.