Highlights
- Central to supply 3.5 Petajoules (PJ) of gas to Macquarie (or its nominee) over calendar years 2022 and 2023.
- The gas supply agreement is to be pre-paid in full in
- Funding from the gas supply agreement will be used for the recompletion of four existing wells and drilling two new crestal production wells at the Mereenie Field in 2021.
- The programme is expected to return the Mereenie Field's gross JV gas production capacity to over 45 Terajoules per day (TJ/d) when completed next year, delivering a target total volume in the order of 40 PJ (20PJ net to Central).
- The term of Central's existing
These transactions will accomplish a series of important corporate objectives for Central, which:
i. Funds critical Mereenie field activity to increase production capacity back to above a target plateau of 45 TJ/d (gross JV);
ii. Significantly increases target production capacity (net of the new gas supply agreement) for marketing into a domestic gas market recovery from 2022;
iii. Reduces gas contracting uncertainty by removing an existing Macquarie option to purchase gas in 2022 and 2023.
iv. Demonstrates strength in the domestic gas market from 2022;
v. Preserves firm contracting capacity for delivery through the proposed Amadeus to Moomba Gas Pipeline ("AMGP") from 2024;
vi. Mitigates refinancing risk and increases capital structure certainty through to late 2022; and
vii. Creates cash flow flexibility through 2021 under a restructured debt repayment profile.
New Gas Sale Agreement
Under the gas sale agreement, Central will, subject to certain conditions precedent having been met, be paid in advance for the gas as a lump sum on
The new gas sale agreement increases Central's firm contracted gas sales to 7.5 PJ in CY2022 and 5.2 PJ in CY2023 (refer figure 1 below*), demonstrating strength in the term gas market from 2022 whilst preserving Central's firm contracting capacity for deliveries through the proposed AMGP from 2024.
The funds for the gas that are paid in advance will be used by Central to fund its share of costs associated with recompleting four existing wells to produce gas currently behind pipe and drilling two new crestal production wells at the Mereenie Field in 2021.
The programme, which is subject to final JV approval, is expected to return the Mereenie Field's gross JV gas production capacity to over 45 TJ/d when completed next year, delivering a total incremental volume in the order of 40 PJ (20 PJ net to Central). The increased production capacity resulting from this investment will increase the quantity of firm gas available for marketing from 2022, including into markets potentially accessible via the proposed AMGP from 2024.
Loan Facility Extension
Central and Macquarie have agreed to extend the term of Central's
CEO Comments
"The transactions announced today pave the way for our strong financial performance as we emerge from the current market downturn. Using a pre-sale structure to fund field drilling that unlocks significantly more gas production capacity from 2022 accomplishes several key corporate objectives. Combined with the extension of our cost-efficient finance facility to late 2022, these transactions give Central flexibility and a solid financial base as we move forward in progressing our growth activities."
*To view tables and figures, please visit:
https://abnnewswire.net/lnk/J96REV7I
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