Central Petroleum Limited has agreed to acquire a 50% interest in the Mereenie Oil & Gas Field from Santos Limited and assume Operatorship of the field in the Northern Territory's Amadeus Basin. The move will significantly increase Central's operations and enable Central and Santos to maximise the amount of gas available for the proposed Northern Territory-East Coast gas pipeline (referred to as NEGI). The acquisition is subject to regulatory approvals and completion of the expansion to the existing Macquarie Bank debt facility which are normal for transactions of this nature.
The acquisition is immediately value accretive to Central, with a significant increase in free cash flow, reduction in unit production costs and enables Central to be cash positive even without NEGI.
By taking on Operatorship of Mereenie, Central will become the common Operator across all three conventional gas fields producing in the Amadeus Basin. This creates immediate operating efficiencies and provides employment opportunities in and around Alice Springs by utilising local services and resources.