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Central Petroleum looks to monetise oil and gas assets, to drill Madigan Prospect in 2011

Central Petroleum (ASX: CTP) has upped the ante in its quest to generate early cash flows from its oil prospects and mapped leads in central Australia, with plans to commence drilling following recent promising seismic results.

The company is targeting billions of barrels of UOIIP (Undiscovered Oil Initially In Place) oil in its exploration prospects in the Pedirka Basin, the Madigan Prospect and the Simpson East Prospect, south-east of Alice Springs in the Northern Territory.

Central plans to drill the potential four billion barrels of UOIIP oil in the Madigan Prospect first in the second half of 2011. Madigan is a massive ancestral high which marks the eastern margin of the Madigan Trough which contains oil targets, and structural closure, in the carbonate complex.

Central owns by far the largest share of interest in the Madigan Prospect, however this would need to be signed off with an industry-standard unitisation agreement with Rawson Resources (ASX: RAW).

The Simpson East Prospect lies completely within Central’s Simpson Farmin Block and may be an additional, or an alternative well, depending on the analysis of recently completed surveying.

Central's recent interpretation of a Devonian barrier reef complex and a rimmed carbonate platform complex have provided new ground breaking plays at the Pellinor lead and the Simpson East prospect, and may be far more extensive than currently known.

John Heugh, Central Petroleum managing director, said “we are excited that new seismic we have been carrying out has produced a substantial multi-level prospect at Madigan.

“Success there can be leveraged by drilling Simpson East and in the short term by acquiring incremental seismic to mature existing leads to drillable prospect status. These plays are believed to be far more extensive than currently known and we plan to map as many as possible during 2011.”

Central believes that it is only scratching the surface of the potential at its prospects and that it is just a matter of time before the company makes a major discovery.

The prospect of an early cash stream out of the UOIIP oil explorations will provide encouragement to Central’s investors as the company pushes forward towards realising the potential of its huge landholding, which is half the size of Texas.