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- Central Petroleum (CTP) is facing delays while negotiating a joint venture agreement for the Dukas prospect in the Northern Territory’s Amadeus Basin
- The delays began when drilling was forced to stop at the site’s Dukas-1 well, after intersecting a high-pressure zone just above the target reservoir
- The suspension has complicated the joint venture’s farm-out obligations and further delayed negotiations between the Central Petroleum and its venture partner Santos
- As a result, negotiations remain ongoing and the project’s expected spudding date has been postponed until after 2021
- Central Petroleum shares ended the day 1.23 per cent up, trading for 8.2 cents each
Central Petroleum’s (CTP) is facing delays while negotiating a joint venture agreement for the Dukas prospect in the Northern Territory’s Amadeus Basin.
In August of last year, drilling at the site’s Dukas-1 well was suspended, after intersecting a high-pressure zone just above the target reservoir. Despite the suspension, the company has taken the zone as a positive sign is eager to continue extending the drill-hole, which currently reaches a depth of around 3,700 metres.
However, the suspension has complicated the joint venture’s farm-out obligations and further delayed negotiations between the Central Petroleum and its venture partner, Santos.
Further, sourcing the specialised high-pressure equipment required to extend the hole deeper has also presented challenges, particularly in the already trying industry environment brought on by the COVID-19 pandemic.
Leon Devaney, Managing Director and CEO of Central Petroleum had hoped negotiations could be completed by the end of June but admits that now seems unlikely. He went on to say that the delays are expected to push the project’s spudding-date further back.
“Despite the progress to date, I do not believe that a target spudding date for Dukas will be achievable in 2021,” Leon explained.
“Whilst I fully appreciate that such a delay may be frustrating for investors, we will continue to push hard for an outcome that is in the best interests of Central shareholders and does not expose the company to unacceptable risks or unnecessary delays,” he said.
Despite the news, Leon believes that a forward plan for the project is still possible in the near-term but has not revealed an expected end-date for the negotiations.
Central Petroleum shares ended the day 1.23 per cent up, trading for 8.2 cents each.
