Central Petroleum Limited (CTP) Earnings Call Transcript & Summary

Thanks for joining us today. In this presentation, we'll walk you through Central's results for the December quarter and provide updates on key activities, including several important transactions announced over the past few months. I'm Leon Devaney, Central's CEO and Managing Director. I'm here with Damian Galvin, our CFO, who will cover the December quarterly results. And I'm also here with Ross Evans, our COO, who will discuss our recent acquisition of exploration permits in the Otway and Cooper Basins. As usual, feel free to submit your questions online at any time during the presentation. We'll aim to answer them at the end. And please take a moment to read the legal disclaimer at the end of the presentation slides. After several years of careful capital management and included reducing liabilities, lowering costs and improving our portfolio pricing, we ended December with a strong cash position of almost $30 million. This war chest gives Central a range of attractive options for deploying capital, something we've discussed in previous webinars. By taking a measured approach, we were able to identify and progress some excellent investment opportunities that became available more recently. First, we announced and just recently completed a strategic move into highly prospective oil and gas exploration acreage in the onshore Otway and Cooper Basins. Our technical and commercial teams rigorously assess acquisition opportunities. Most don't make the cut, but these assets were very attractive. Ross will discuss this in more detail later in the presentation. We also announced a letter of intent for a firm gas supply agreement with the Northern Territories Power & Water Corporation. Subject to final investment decisions. This would be the largest gas supply contract we've signed to date, significantly increasing Central's firm gas commitments through to 2034 from 14 petajoules to 37.5 petajoules. That's an increase of over 150% in our contracted firm gas position. We also announced a conditional agreement to divest our interest in the Dukas and Mount Kitty projects to Georgina Energy, a helium focused small cap Explorer listed on the London Stock Exchange. This transaction could unlock value from our subsalt portfolio while allowing us to focus capital on growing our core oil and gas business. Additionally, we implemented a share buyback program last year. Since the start of this financial year, we purchased and canceled 10.6 million shares and share rights at prices well below current levels. Underlying all of these initiatives is our continued strong operational performance. Our operations team maintained efficient, reliabl and low-cost operations. And I'm very pleased to highlight that this was a company by an excellent safety record, with our total recordable injury frequency rate currently at 0. I'd like to now hand it over to Damian.

Thanks, Leon. We had another very solid quarter in the 3 months to December. We booked $10 million of revenue, and that was down slightly on the previous quarter due to oil offtake constraints, which have affected both our oil and gas revenues. The good news is we put alternative oil offtake arrangements in place from mid-December, and that's restored our gas volumes. And so we've been producing at capacity since then and the current quarter is averaging about 8% higher than the December quarter. Oil sale volumes, however, they will remain below capacity until more attractive offtake arrangements can be secured. So regardless of this temporary dip in revenues, our operating cash flow outlook remains very strong. And it's courtesy of the new gas agreement that started in January last year. And you can see that chart at the top right that the average quarterly operating cash flows in 2025 were significantly higher than previous periods. We expect that to improve further as the gas volumes recovered at capacity. So those positive cash flows are reflected in our closing cash balance, which was $29.4 million at the end of December. That's a positive net cash position of $5.3 million. Now going forward, we expect to see a further cash flow boost from midyear when that overlifted gas is fully repaid. And so that's going to equate to over $7 million a year in extra cash flow at current pricing. And then we've got the new wells that we're proposing to drill later this year. So we'd expect them to add additional capacity, and we'd expect a further significant increase in revenues from 2028, but more on that shortly. So first, I want to give you an update on the Northern Territory gas market. So those who have seen our presentations before, they'll be familiar with this chart. And what it shows is the gas supply in the Northern Territory market for the past 5 years. So the dotted line across the middle, that's the average Northern territory demand for gas. It's about 70 terajoules per day. The colored blocks are the supply from different sources. And so generally, when aggregate supplies above the demand line, that surplus of gas is exported, if you like, to the East Coast via the Northern Gas Pipeline. But when the local supply falls below the demand line, then the market is short of gas. And obviously, in the shortfall is typically filled by diverting gas, which would otherwise be exported as LNG from INPEX or value engine. So the green block across the bottom is from our central operated gas fields in the Amadeus Basin, so generally, pretty consistent production and currently supplying about half of the NT's gas demand. Now the NT markets historically been supplied by both central and by ENI's offshore Blacktip field and that's the blue block. And as you can see, its production has declined consistently. And despite drilling a number of new wells to temporarily restore production, it's now ceased production entirely. That shortfall has been picked up by Bayu Undan. That's the orange block. It's now closed and inpex the red gas on the chart. So presumably, these are quite high-cost alternatives compared to domestic supply. There was even a short period late last year when INPEX was closed for maintenance when the Northern Gas Pipeline was reversed. That's that little yellow spike on the chart. And for the first time, gas flowed from East to West just to keep the lights on the territory. So that Northern Territory market shortfall is currently being filled by high cost diverted LNG. And there's a number of new mines planned such as, for example, the Arafura rare earth mine, which would further exacerbate that shortfall developed. So there's some reliance now on Beetaloo gas coming to the rest of you coming online soon to relieve this relatively tough situation. So firstly, that would be used to replace the impact gas volumes and then any surplus presumably would reopen the NGP and pathways to Eastern markets. However, obviously, there's some uncertainty around timing and volumes that may ultimately be supplied from the Beetaloo. So it's in this uncertain and undersupplied market that Central has been able to achieve a fantastic commercial outcome. We're in the process of finalizing this multiyear gas sale agreements with the Northern Territory's Power and Water Corporation. These are contracts are going to guarantee that basically all of our expected gas production from our existing wells and 4 new wells will be sold for the next 8 years. I'll try and articulate what this means on the chart. So our existing gas contracts are shown on this chart as those blue blocks of gas. If you compare that to last year, for example, when we sold about 4.2 petajoules of gas, we were already well covered for the next 2 years of gas sales. And then we had gas available to market from 2028 onwards. The new contracts, that's the orange hatched area on the chart, that covers all of our expected production, underwrites the drilling of those 4 new wells, 2 at Marini and 2 at Palm Valley. Now we're expediting the drilling of these wells, and we're already well advanced on planning for them and the long lead items that we've locked in. So we're expecting those new wells to be drilled from July this year and be brought online through the second half of the year, quickly using our existing infrastructure. There's a 2-pronged benefit really from these new contracts. We've got a near-term 50% jump in production and revenues from next year and a government guaranteed offtake through the end of 2034. So Central's overall contracted gas position increases by 150%, and these contracts provide both short-term revenue growth and long-term financial crisis a real game changer from where we've been in recent years, and it provides an incredibly solid financial base from which to look at other capital allocation options going forward. So with that, I'll hand you over to Ross Evans, who's our Chief Operating Officer. He's going to outline some of our exciting growth initiatives going forward.

Thanks, Damian. Good morning all. It's a pleasure to be joining you on the webinar today, and I'm really looking forward to taking you through our strategic expansion into the Cooper and Otway Basin. Now we've been reviewing opportunities for many years, looking for that 1 really exciting opportunity that makes you sit up and take notice. And when this opportunity came across our desk, we knew we'd found it. This transaction provides a real strategic shift for the business, enabling us to diversify and expand into multiple highly prospective basins. In 1 fell swoop, we picked up 20% of a large onshore position in the Otway basin, plus a 49% interest in extensive acreage in the onshore Cooper Basin. Both the Otway and Cooper Basins have a long history of success over many decades, and we see many positive aspects to this deal as follows: First, being low cost is critical. We can conserve capital and have more shots on goal for the same investment and low-cost production provides confidence in product will clear into the market first. This acreage is all onshore in jurisdictions with established regulatory regimes, all of which enables shorter approval time frame and lower costs. In addition, ADZ, the operator is like-minded to Central, as a nimble, low cost operator with strong technical expertise. Second, prospectivity is very important, and this acreage is very prospective because it's in the guts of each basin in close proximity to existing producing fields. So there's established knowledge of where to look and what to look for, all of which increases the chance of success and the opportunity for a successful development. Third, it's important to get results early, and this acreage is essentially drill ready. There's already significant seismic coverage with drilling targets identified, and as a result, we are planning for up to 4 wells in the next 18 months. Fourth, there's significant potential for further growth. The acreage is extensive and beyond the initial drilling we can already see the opportunity to replicate success across multiple future targets. Fifth, access to infrastructure is excellent with nearby plants and existing pipelines and trucking routes traversing our acreage. This will enable rapid monetization of discoveries. And finally, this acreage has direct access to buoyant gas markets. Both basins are in the heart of the East Coast gas market, requiring minimal transport and ready access to the highest value gas markets in Australia. Okay. So that's a general introduction to the acreage. Now let's delve into each basin in a little more detail, starting with the Otway Basin. In the Otway, the initial focus is going to be on the very exciting Enterprise North onshore prospect and I'll step you through why Enterprise North is considered one of the most prospective onshore targets Australia-wide. Firstly, a bit of background on the enterprise field. This acreage is familiar from when it was part of Origin until it was divested to Beach in 2018. Enterprise was always a high priority target as it was amplitude supported. I'll go into what amplitude support means on the following slide. But in short, it's strong evidence for the presence of gas. Enterprise was eventually drilled by Beach in 2020, resulting in an excellent discovery in the Warri Sea with around 130 petajoules of 2P reserves. The Warri Sea is a world-class reservoir with permeabilities in excess of 1,000 [ millidarcies ] to put that in perspective, that's around 50x the permeability of the Marine field, which means extremely high flow rates. By way of example, the Enterprise one well flowed at more than 50 terajoules a day on test. Okay. So that was Enterprise. What makes Enterprise North exciting is that it's also amplitude supported in the Warri, meaning there is strong evidence for the presence of gas and it's immediately to the north of Enterprise. The amplitude support plus proximity to Enterprise provides dramatically increased confidence in the chance of success. As a result, the JV is advancing quickly to drill this well as a full-bore production hole so that gas can be rapidly delivered to market. Our well site has already been secured and long lead items for the well have been audited. The operator is also in active discussion with various rigs targeting a spud date in the second half 2026. To bring gas online, this well site is in close proximity to multiple gathering lines, and you can see them on the map. This provides good access into 3 existing processing plants, which are the yellow squares on the map, the Iona gas plant, Otway Gas Plant and Athena gas plant. Hence, the Otway JV parties will need minimal additional capital to bring a successful well online. The Enterprise North prospect is targeting gas in place of up to 79 Bcf, which is around 16 Bcf net to Central. In simple terms, this is around 16 petajoules or worth around $200 million of revenue to Central at the prevailing gas prices in Victoria. In a success case, Central's overall group production would approximately double with minimal further capital outlay. So getting a successful result at Enterprise North would clearly be a game changer for Central. We expect high margins in our success case with acquisition and drilling costs currently estimated at around $1.50 to $2.50 per gigajoule with minimal wellhead equipment required and a straightforward connection to 1 of the 3 nearby gas plants. Finally, it's worth noting the storage potential. You can see on the map the various fields that make up the Iona storage facility, otherwise known as WUGs, Western underground storage. The Victorian gas market sees significant intraday and seasonal swings, and this generates substantial revenue for the operator of WUGs. The success at Enterprise North would likely be larger than the current storage fields that make up works, and this could provide real and material upside through storage services provided by Enterprise North once the field is depleted. Okay. Now as promised, I'll go into a bit more detail on seismic amplitudes to help understand why we're very excited about the potential at Enterprise North. Now similar to sonar, seismic works by bouncing waves of layers of rock to provide information on the types, thickness and angulation of the various rock layers. In certain types of rocks, unusual seismic amplitudes called anomalies or bright spots can indicate the presence of gas in the rock. Bright spots that go away or dim at a consistent depth suggests that there are hydrocarbons sitting above water along a flat plane at the base of the structure, such as a gas water contact. So finding bright spots that dim at a constant depth is very exciting because it provides strong evidence for the presence of gas. Our seismic amplitudes have been used very successfully in the Otway Basin, and there is an established strong correlation between seismic amplitudes and the presence of gas. In fact, in the period to 2023, there were 16 successes from 17 amplitude-supported exploration wells. In addition, the recent discoveries by ConocoPhillips at Essington 1 and Salmon 1 were also amplitude supported. The overall success rate for amplitude-supported exploration targets in the Otway Basin is greater than 94%, which is outstanding in exploration terms. The power of amplitudes is also demonstrated by the ongoing offshore drilling in the Otway by Beach and Amplitude Energy, where both campaigns are targeting drilling amplitude-supported targets. All right. So that's a general introduction to seismic amplitudes. Now let's look at a specific example of enterprise on the lower right of this slide. This image is the seismic cross-section from around 2,000 meters below ground. The yellow and gray layers represent rock layers imaged by seismic. The enterprise gas field is in the middle where the rock layers roll over to form a trap. You can see that Enterprise displayed excellent seismic amplitudes both a bright spot, where the red and black are brighter and dimming of the red and black at a consistent depth. Since being drilled, the dimming was found to be consistent with the gas water contact. So in the example of Enterprise, the presence of a bright spot and dimming at consistent depth were excellent predictors of gas in the Warri Sea. On the upper right, you can see the Enterprise North prospect in the middle of the image, where you can see the rock layers rolling over to form a trap. The exciting part is that we can also see both at the bright spot where the red and black layers are brighter and dimming of the red and black at a consistent depth, suggesting a gas column of around 200 meters or more in the Warri Sea. In addition to the amplitude support, the structural interpretation suggests that Enterprise North is on the spill part from Enterprise. This is a real bonus because it indicates the likely gas composition at Enterprise North is the same as that at Enterprise, which was excellent quality gas with low inerts and good liquids yields. Combining all this data together means there is strong evidence for all elements of a successful gas discovery, including source, reservoir, seal, trap and migration. And this is why we're very excited to join ADZ in PEP 169 and drill Enterprise North. Now even though I've spent a lot of time talking about Enterprise North, it's worth saying as a final comment that there are multiple other prospects and leads in this pyramid, including others with amplitude support. Hence, we see significant running room and upside into the future in this permit. So in summary, PEP 169 is a great permit and Enterprise North is a great prospect, and we're really looking forward to drilling it and bringing gas to market. All right. Let's move on and talk about the other exciting acreage in the Cooper Basin. Now the Cooper Basin was one of the original onshore basins in Australia and has been online into late 1960s. Since then, there's been numerous discoveries throughout the basin, and these discoveries continue to this day. Over time, the exploration has expanded out from the core of the basin around Moomba in South Australia and Balero in Queensland. Much of the recent exploration has been on the flanks of the basin where the state of rise upwards and create traps for migrating oil and gas. Beach and its predecessors [indiscernible] have had success pursuing discoveries on the flanks, particularly on the western flank of the basin where there's been numerous oil discoveries. Through this transaction, we've been fortunate to pick up a large portion of acreage on the northern flank of the basin. Over that period, while the western flank was being drilled up, the northern Flank laid dormant due to a prior operator putting the acreage into suspension. The acreage has only recently come out of that suspension, providing an excellent opportunity to explore in a part of the basin that is relatively underexplored. The acreage has got excellent seismic coverage from prior surveys, and there are numerous discoveries in the surrounding acreage indicating the presence of established reservoirs. To date, 17 prospects and leads have been identified in our acreage with at least 7 prospects being drill-ready subject to seismic processing. As a result, we are planning to drill up to 3 priority targets in the first half of 2027. And one of the wonderful things about the Cooper Basin is that there are multiple stacked potential reservoirs that can be targeted. Our initial focus is going to be on oil in the Birkhead formation and gas in the Patara formation, both of which are established as successful targets throughout the basin. Now given the age of the basin, there is significant existing infrastructure, including nearby gas plants, oil pipelines, gas pipelines and oil trucking routes. This enables low development costs and rapid access to market. We have identified a number of structures on seismic that are large enough to have a couple of million barrels of oil recoverable, which would deliver acquisition and development costs of around USD 20 a barrel, which would deliver excellent margins at current oil prices. As a final comment, this Cooper acreage is very extensive, with plenty of running room for multiple follow-up wells targeting further success. So in short, we see plenty of opportunity to target success in this acreage for years to come. Well, that brings my section to a close. I've stepped you through why this acreage is so exciting and why we see this strategic expansion into the Otway and Cooper Basins as a fantastic step forward in the ongoing growth story of Central Petroleum. Thanks.

Thanks, Ross. With several major transactions announced over the past few months, I can now provide some additional clarity on our investment priorities. Our acquisitions in the Otway and Cooper Basins have been completed, so we're moving quickly with a drilling program that includes at least 3 exploration wells. As Ross discussed, these permits give the chance to pursue lower cost exploration with significant upside. And that includes an opportunity to accelerate the use of Central's $156 million tax loss carry. Our other key priority is executing the binding gas sale agreement with PwC in funding the associated 4-well drilling campaign. This would be one of the largest drilling programs in Central's history. With a successful drilling program expected to deliver to Central up to 14 petajoules of new firm sales through 2034 via the PwC GSA. The associated boost to cash flow is expected to be material and visible from early next year. Our transaction to spin-off subsalt assets is designed to unlock value from those permits without requiring further capital investment from Central. So we'll continue to work toward completion. This transaction is subject to several key conditions being achieved. The most significant of which is Georgina's equity raise, which we understand is to occur over the next few months. So far, we purchased 2.1 million shares through our share buyback program and acquired 8.5 million share rights at prices well below current levels. Altogether, this represents about 1.5% of total shares outstanding over just the past few months. There are considerable restrictions on our ability to purchase shares under this share buyback program due to ASX regulations and company policies, and that includes the present time as we are preparing our half year accounts. I want to emphasize that when we announced the share buyback in September of last year, we did not have visibility on near-term drilling at Marini or Palm Valley or acquiring new exploration permits in the South. These investment opportunities, specifically successfully drilling at least 7 wells, are capital allocation priorities early 2027, at which time that capital outflow should subside, and we can expect to generate strong positive free cash flow, hopefully materially improved as a result of drilling success. Whilst we still see value in the share buyback program at certain prices, our purchasing activity will now be subject to available capital as we execute drilling programs over the next year with our capital largely focused on high-value growth-driven investment, dividends and early debt repayment are likely to be deferred. We expect this to be the case until we conclude our planned drilling programs in 2027, at which time we expect to start generating free cash flows, hopefully, that are materially improved levels at which point we can revisit those various capital allocations including early debt prepayment and dividends. Of course, our priorities may shift as circumstances change, so we need to remain flexible and ready to respond new opportunities or changes in the financial landscape as they arise. Looking ahead, the next 18 months promise to be a pivotal period for the company with plans for 1 of its largest and most consequential drilling campaigns, at least 7 new wells covering development, appraisal and exploration across 3 basins. To put that into perspective, we have historically, on average, drilled about 1 well per year. With this investment and activity comes the opportunity for significant potential upside. This will be transformative for the company, as we seek to materially increase our cash flow and reserve base. The table on this slide outlines our main growth milestones into the next year. We want to start by executing the PwC gas sales agreement and making a final investment decision on the 4-well drilling program before moving into a significant execution phase for our various drilling programs, both in the Amadeus Basin and the Cooper and Otway basins. We've had an outstanding 2025 and an even stronger start to 2026 and we demonstrated how this company can generate significant free cash flow and cash balances. As I mentioned at our AGM last November, the momentum we're building now is only at the beginning. I believe this is becoming increasingly obvious as we move forward, and I'm confident that the investments we are making now will deliver meaningful shareholder value in a relatively short period of time. At this point, I'd like to spend a few minutes answering any questions.

Any questions?

Yes, Leon, we do have some questions coming through. I'll start with on the corporate ones. I guess, dividend is always a favorite. This one, I guess, in relation as well to the buyback. I'll Paraphrase it slightly. Our viewers suggesting that the buyback is far to stimulate the share price to date. It's saying conversely, a dividend of any size makes the statements. We should consider changing our decision from a buyback to a dividend. Any comments on that?

Yes, certainly, dividends were a focus for our capital allocation over the past year. And certainly, when we had that large cash balance, that was something we did seriously consider and talked about in some detail. The recent opportunities that have presented themselves, that being the acquisition of the permits in the Otway and the Cooper and more substantially in terms of capital allocation, the window of opportunity to do a significant GSA to derisk the portfolio, lock in attractive prices and accelerate for wells in the Amadeus Basin has only popped up very recently, and that's an incredibly compelling investment. And so what we're looking to do is, over the next 18 months, focus on delivering that drilling program, both in terms of our resources, but also in terms of our capital. They're incredibly significant for the company, and with success, it will be a step change for us. And with the investments in the new wells, particularly at Marine, but also Palm Valley, we have confidence that, that will result in a material increase in our production and sales revenue. So as I've mentioned, we are looking to defer the dividend payment plan until really mid-2027, at which point that cost for the drilling programs have played through when we've funded those. And we will see at that point a very solid return towards positive free cash flow and building a cash balance. And it's at that point, we expect to then revisit things like prepayment of debt or sustainable dividends. And I think the important thing to recognize is that the investments we're doing now and the deferral of dividends is intended to put us in a position where from mid-2027, the opportunities to put forward sustainable dividends that are larger and more meaningful and more substantial are obviously increased, and that is our goal, is to put these investments in. And on the back side of it, we'll have a much better position to be able to do a sustainable dividend program that's quite more substantial. So that's the schedule at this point. That's our goal at this point. But for the time being, we're really focused on delivering these high-value, high-return opportunities, both in the new permits down south but also in the Amadeus Basin where we have development and appraisal wells.

Okay. Thanks, Leon. So I'll work through these in no particular order. There's a question here just around the overlift of gas that we have -- that we've been repaying and that will be fully repaid in May. The question was that all the Amadeus basin partners, including Echelon, received cash boost when the overlifted gas is repaid in May 2026. So was it only Central that gets the extra 2 TJs per day cash and boost? So I guess the simple answer to that is it's just Central. There's a question here around Blacktip. So the Blacktip obviously ceased production. So the question is, is there more urgency with PwC to convert GSAs to binding agreements.

Well, I think the answer to that is there has been some degree of urgency for quite a while since Blacktip has shown problems a number of years ago and has struggled to return to the production profile at the original GSA with PWC had anticipated. So there's always been a building concern. I think where we're at now is there's a window where Blacktip continues to appear to struggle. And the Beetaloo gas that had been anticipated and was going to be online earlier and available to the NT customers has been delayed, and there is some uncertainty about both volumes and timing for it. So the window that we have right now is quite opportunistic for us in terms of we're able to step in with this uncontracted gas and this new production from new wells to satisfy that shortfall that exists in the NT right now. So we see this as a fantastic timing. It's one of the reasons we're very keen to lock up the uncontracted positions we have and to accelerate new drilling to create more gas that we can bring into the NT market. It's an incredibly important gas contract that allows us to underwrite those wells, but it also brings gas that is backed by reserves into the market as quickly as possible to help offset some of that supply shortage and uncertainty that currently exists in the NT market.

Okay. So while we're talking about our drilling campaign, there's a question here about the 4 well program that we've got for Palm Valley and Marine. So the question is which wells get prioritized first Palm Valley wells or the Marini wells and are the Palm Valley wells more expensive than Marini?

Yes, maybe to take that one. So in terms of priority, it's -- the current plan is to mobilize the rig from Queensland and then it just makes logical sense to go to Palm Valley first because that's closer on that mobilization journey, and then we go to Marini after that. And the second question was?

Are the Palm Valley wells more expensive than Marini?

Yes. So the Palm Valley wells, so it's harder rock. It's roughly the same depth, but it's harder rock and more extended reach wells. And then the geography of mobilizing a rig in and out of Palm Valley has also -- takes more time and effort. So the Palm Valley wells are more expensive than the Marini wells, not significantly. I mean if you wanted to get a sense for the overall cost of drilling to Central, you can certainly look at some of the wells that we've drilled in the past. -- and we expect it to be in line with what we've drilled in the past. The overall cost to us, our share, we think, is around about the $32 million mark, $32 million, $33 million, and that's what we're tracking towards at the moment.

And it's across both Marine and the Palm Valley programs, so all 4 wells. Yes. The one thing I would add, though, is the Palm Valley wells do have a higher expected production profile initially. They tend to have a better initial flow rate. Obviously, that accelerates the revenues the economics on Palm Valley are very strong. And the other driver to tackling Palm Valley first in the program is obviously with more production earlier from the Palm Valley wells. Certainly, the NT government is keen to get those in place and online first because that obviously brings more new gas to market quicker. And so we're conscious of that objective, and that's one of the other reasons for that scheduling program.

So one of the features of the LOI that we got with our Water Corp was that we get started on some long lead activities and that there was a reimbursement mechanism, if for some reason, the gas sale agreement wasn't executed. I think the date was February or something like that. So the question is can we elaborate on those arrangements.

May give an update on where we're at on that.

Yes. So certainly, in terms of activity, yes, so we're well underway. Long leads have been ordered. Civil works is underway at site. So that's all very much underway. And we're working very closely with PwC. We're very close to finalizing and closing that contract. So we expect it will all come together, and we'll be drilling those 4 wells pretty soon. And the reimbursement arrangements they're basically put in place so that to the extent that we've done work to a particular point in time than if it was required, we will get a reverse reimbursement of those costs up to that point in time.

I think the other interesting point is, at the moment, we seem to be tracking on track to get those GSAs signed off in the very near future. So we shouldn't need to push the reimbursement button at all with any luck. Okay. So if we go to Enterprise North, there's a few questions here around Otway, for example. So the question here, could you please give some more detail about who you bought the Otway prospect off and the reasons that they decided to sell it.

Yes, sure. I can take that one. So the acreage is owned or was owned until we did the transaction. It was owned 100% at that stage by a company called ADZ Energy, which is a Brisbane-based company. And so we've done the transaction with them now. So now it's 80%, 80% ADZ and 20% us. And look, I mean there are reasons for doing the transaction. They are the same typical reasons that most companies would have. Going into the drilling phase, it's always a good opportunity to share the capital requirements and the risks and opportunities with other partners, which is typically why you see almost everything in the oil and gas game done as joint ventures. So that's certainly one driver. And again, these typical reasons, but funding will be another driver. And I think as well, you look for partners that are like-minded in terms of sort of technical expertise, technical capability, size of the organization and nimbleness and willing to get things -- willingness to get things done. So I think all of those would have been factors in the transaction and why both sides were keen to get the transaction done.

Yes. I guess the final front, there was a question here. Just could you provide an update on the joint venture dynamics in the Otway and Cooper Basins following the ADZ acquisition?

Yes. Sure. Look, I touched on it briefly there. So the joint venture dynamics are really good. ADZ is -- as I said, they're like-minded nimble company. They have a lot of expertise in their organization in the Cooper and Otway Basins, and I'm quite familiar with a lot of the individuals in ADZ from being in the industry over many decades. So the relationship with the joint venture is really good, and we're moving forward to get the drilling done as quickly as we possibly can. .

And I'd probably just add that is a private company. It's not a listed company.

So there's a few more detailed questions here on enterprise and also let's maybe dig into those. Question here, is enterprise in pressure communication with Enterprise North? Or is there a thought seal?

Yes. So what we see in the structural interpretation at the moment is that enterprise is a separate accumulation and it's lower structurally than Enterprise North. So we see that the likely spill path is from Enterprise up to Enterprise North. However, it's important to note that on that interpretation at the moment, that there would be separate accumulations and so that whatever the pressure or degree of depletion is within Enterprise, that would be happening separately. And then Enterprise North would still be at its original undepleted pressure. Now obviously, the actual pressure in the reservoir will be established when we drill into it and do the testing when we first get success in that well.

All right. Still on Enterprise North then. What is the total cost growth of Enterprise North One? And is there any additional cost for tying in? so I think the answer to that is we expect our share of the drilling cost to be around about $3 million. In terms of the tie-in costs, I believe that work is still underway, so we probably don't have a firm sort of number that we can talk about at this stage.

Yes. I mean what I would say about the time is, as you would have seen on the map, there are the gathering systems for a lot of those gas plants that actually more or less traversed, directly passed where the well site will be. So we see that time cost will be very, very straightforward and minimal, well ahead skid in a short time into an existing gathering line and then obviously, not a capital cost but then a tolling arrangement with one of the gas plants in that area.

Another one in [indiscernible]. A commercial success, how soon could we book reserves?

Yes. So the current timing that we're targeting is the second half of '26 to drill a well. And then you would expect in the success case, there would be a flow test undertaken while the rig was on the well. Then they would just need to be a brief period of analysis and then booking reserves. So it could be of the order of about 3 months after the well's been drilled that you're being in a position to book formal reserves in the success base.

Okay. A question here just around ADZ. Do you have confidence that ADZ can fund their share of the drilling and then bringing Enterprise North into production given that they are a private company?

Yes. Look, there's actually quite a lot of interest in the marketplace in this particular target. So I would expect that there's a number of potential scenarios for ADZ to find sources for capital, and so we don't have any concern that ADZ will be able to bundle well. Obviously, by virtue of our transaction and our -- funding our share, that's certainly assisted with that objective. And so the additional amount that they need would be, I think, given the market interest and other sources of funding, I think that won't be a problem.

Yes. I guess there's a question here about our funding, for example. So with the portfolio expansions, would a capital raise be considered in the next 12 months? I think when we -- the numbers that we've got in our forecast suggests that we can actually pay for all of these programs over the next 18 months, depending on timing, just out of our existing cash reserves and cash flow. However, if we do want to accelerate some of those wells, which we obviously may want to do and we obviously want to get Marini and Palm Valley drilled this year, then we will look at some possible funding, but probably not from equity. I mean we haven't raised equity for a long time. We certainly got room in our current debt facility to perhaps raise a little more based on what would be quite quick paybacks from those production development, the wells at Marine and Palm Valley. So the answer is no, we're not looking at a capital raise, but we are looking at obviously the overall capital mix and how we fund those activities if we want to accelerate them a bit quicker than we can fund organically.

Yes. Certainly, an equity capital raise has not been actively considered. We think there's other options available, and our cash flow, as we said, we continue to generate positive cash flow. We've had that war chest, and we think we've got a good strategy that will come together as part of the FID for the PwC GSA and for the 4-well drilling program. That will include a funding plan, but there's no expectation at this point that we'll be raising equity. And we've been not prepared to raise equity just given the share price and what we think it should be going if successful over the next year.

Yes. I guess we've just come off some activity on our buyback program. There's a question here saying, with your comments today, are you in effect indicating that the current share buyback program is not likely to progress any further given the necessary capital outlays associated with the 18-month drilling program that we've got ahead.

Yes. Look, I think the message we want to put out there to shareholders is that the program will still be in place. It is something that we do find attractive, although it's not the top priority, as I've mentioned, delivering the drilling program that we've got on foot, and this assumes, obviously, the PwC GSA completes and our 4-well program moves forward. That will be our focus for capital. But having said that, we are generating positive cash flow as we go along. And where we have available surplus capital and the windows are available for us at trade, you got to remember, there's substantial periods of time where we're not able to trade because of ASX regulations and Central company policies. There may be times where we do dip into it. And obviously, it depends on the share price and importantly, the available capital we have at a time. We do want to make sure that we have a conservative approach to our capital strategy, and that's something that we have done over the years and has served us well. So the answer to that is we don't expect that to be aggressively pursued, but certainly, it is a possibility depending on all those other factors for us to participate over the next period that the program is in place. And I think that's just until November of this year, I think, is when the 12-month period expires.

Yes. So probably just closing off on the previous question, another question. So is dilution of shareholders value off the table? .

Yes. We have no -- we're not progressing plans at this point to issue equity. We don't think that's a wise approach to managing our capital requirements given the investments that we're looking to do. We think there's much better alternatives. And so I'd say, at this point, the answer is we don't expect to raise equity. We don't expect to dilute, and we believe that that's a smart approach given where we think our share price is compared to the value that we currently have in our base operations, certainly, the value that this GSA with PwC and the drilling program can bring to the assets and the opportunities we have with the acquisition of permits in the Cooper and Otway.

Okay. So a question here just around out these new gas sale agreements. We're asked to what extent will -- the GSA is currently under negotiation to be linked to market prices versus fixed pricing.

SP1 Yes. So we have -- it is a -- the pricing dynamics for these are commercial in confidence. Obviously, we have negotiated prices that we believe are attractive. And I've said, those have been negotiated within the context of the short market that we find ourselves in and the significant uncertainty that we have over the medium term in the NT, and we do have mechanisms whereby we can benefit from higher market prices at the later terms of the GSA. So for us, it was key to lock in a good pricing for a period of time that underwrite the wells, make sure there's a minimum revenue stream that we have that allows us to invest quite a substantial money in the wells. But given the uncertainty down the road, we did not want to preclude ourselves or miss out on opportunities where if the market was particularly short and market prices rose substantially, we wanted to be able to capture that where possible.

There's a couple more left here. So back to our ADZ joint ventures. Question, will ADZ be leading the drilling program? What inputs and improvements can Central offer, that is Central being a minority partner?

Yes. So ADZ is the operator, so they will be acting as operators, so organizing everything and making sure it all gets done. We, as a nonoperator, we obviously have our own technical expertise, and we'll be providing our input into all facets of that. Principally, world sign is obviously going to be key in this stage of the project when we're drilling the well.

I do think that goes back to Ross' earlier point about having alignment and relationship with the port that you go into joint venture with we've had and currently have joint venture arrangements where parties are not as aligned and we've seen what that can do. So it's very important for us to -- in entering into this arrangement to ensure that ADZ was aligned with us and that we could work constructionally with them. I'd flag that as operator of the Amadeus Basin fields, we have to work closely with our joint ventures that are nonoperators and their input is necessary and important. And as operator, you obviously want to have the best outcome, and to the extent any joint venture can bring credible and constructive thoughts to well design or how to approach things, I think it's incumbent on us as operators and others as operators to incorporate that. And we expect that to be the case with ADZ.

Well, I think there's one more question here just in relation to the sub-salt asset sale. So your presentation notes completion of sub-salt asset sale and in speci distribution to shareholders, would you like to provide an approximate range of cents per share, which could be distributed to shareholders? I guess that's given tricky one given...

It's a tricky one. You can obviously see the share price on the London Stock Exchange now. Obviously, that's pre any equity raise. And the market price for that will change over time as they progress both the equity raise and move forward in the joint venture should it complete. So it's not something similar to the fact that we don't project out or provide detailed commentary on what we think our share price should be in the medium or longer term. I think the market will determine that. I do think that the assets and the company that they can build can be very attractive and could generate a very strong market cap in terms of the critical mass of building and the opportunities that they'll have with our assets vended in. So whether it's now or whether that market increases over time, particularly as it gets closer to drilling one of the wells, Mount Kitty, that could move up as well. And so it's not a number I'm prepared to bag because I think it will be -- one, it's hard to predict and two, it will change over time depending on how things play out.

That's right. So I don't think we've got any other questions. Hopefully, I got to everybody's questions today. It's been a long one. We had a lot of good news to talk about. So thanks, everyone, for tuning in.

Yes, Thank you. I just want to reiterate what I was saying on my closing. This is an incredibly exciting period for Central. It is transformative. We've got a -- obviously, our focus is on closing the PwC GSA and the 4-well drilling program. That then moves us very quickly into a phase where we're full steam into execution. We want to do it safely, efficiently on or under budget and have success from these wells. It's incredibly important and will set us up extremely well from 2027 and beyond, which, as I said, does have an impact on our ability to look at other capital allocation options like sustainable dividends. So incredibly exciting time, and we look forward to keeping everyone updated as we move forward with the programs.

Okay. Thank you.

Thanks.

Thanks.