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Central Petroleum Continues Success At Surprise 1 With Positive Initial Engineering Results

Central Petroleum (ASX: CTP) has received positive initial results from an engineering report by RPS Energy that indicate the Surprise-1 Re-entry H well, in the Amadeus Basin, could access stock tank oil initially in place (STOIIP) of between 0.5 and 2 million barrels in an area proximal to the well.

Further defining the well's potential is that no apparent boundaries were identified during the analysis of the pressure transient data.

However, no further conclusions regarding the possible range of STOIIP volumes in the entire Surprise structure of 8 square kilometres can be made until all available seismic, geological and geophysical data has been integrated and analysed.

RPS based their calculations on a 105 metre section of the horizontal well bore placed in the lower half of an 8 metre thick sandstone reservoir section with an average permeability of 50 milliDarcies and a vertical to horizontal permeability ratio of 10%.

From the estimated reservoir pressure and the quasi-stable flowing BHP/rate, a productivity index of 0.65 barrels of oil per day/psi can be calculated.

Even though this is a transient productivity index and will decrease until reaching pseudo-steady state, the Inflow Performance Relationship curve suggests significant production increase potential upon greater draw-downs via artificial lift and possibly pressure maintenance in the medium to long term.

Sweet Success

Central achieved significant oil flows to surface during initial flow testing at the Surprise-1 Re-entry H well, the first significant onshore oil flow in the Northern Territory in nearly 50 years.

Initial flow testing of the Surprise-1 Re-entry H well produced a final stable flow rate of about 400 barrels of oil per day of sweet light crude with an API Gravity averaging 400.

As a result of the ongoing success of the well, a broker has reaffirmed its strong buy recommendation for Central and assigned a 12 month target price of $0.32 per share, well above the company's last traded share price of $0.061 - which notably was up 1.67% higher on today's news.

Strong oil flows from the Surprise-1 Re-entry H well significantly lowers the risk associated with the company's initial projects.

Next Steps

Central is planning an extended production test of the well and a sales contract for any oil produced, with work expected to begin in April.

The company is also considering a second horizontal well prior to a 3D seismic survey of the Surprise structure and associated prospects and leads.

This is subject to further analysis of all data available which may result in a decision to postpone further drilling until a 3D survey can be conducted and the results of the extended production test of Surprise-1 Re-entry H are available.