LOI Signed for New Drilling and Long-Term Gas Supply
| Stock | ECH.ASX (ECH.ASX) |
|---|---|
| Release Time | 15 Dec 2025, 9:53 a.m. |
| Price Sensitive | Yes |
LOI Signed for New Drilling and Long-Term Gas Supply
- Central Petroleum and its partners to commence early works for a 4-well drilling program at Mereenie and Palm Valley
- Finalised 'in-principle' terms for long-term, firm gas supply of up to 25.5 PJ (Central share) through 2034
- Arrangements designed to quickly deliver significant new gas volumes to the Northern Territory
Central Petroleum Limited (ASX: CTP) and its Mereenie and Palm Valley Joint Venture partners have entered into a binding Letter of Intent (LOI) with the Northern Territory's Power and Water Corporation (PWC) to support the immediate commencement of early works for an accelerated drilling program for four new wells, and to promptly document and execute gas supply agreements consistent with conditional gas supply term sheets that will see uncontracted firm gas production from Mereenie and Palm Valley of up to 25.5 PJ (Central share) sold through the end of 2034. The JVs will immediately begin early works for the four-well drilling program, which will involve drilling two wells at Mereenie and another two at Palm Valley, with drilling targeted to commence in mid-2026. The JVs and PWC have finalised 'in-principle' terms for long-term, firm gas supply under term sheets covering uncontracted firm gas production at market pricing from the Mereenie and Palm Valley fields of up to 25.5 PJ (Central share) through the end of 2034, which includes additional production from the four-well program. The intended supply arrangements are designed to quickly deliver significant new gas volumes to the Northern Territory, while also enhancing gas supply security for customers throughout the region. Central Petroleum and its partners have recent experience in delivering accelerated drilling programs, with two new wells at Mereenie successfully drilled and brought online earlier this year under a similar gas supply arrangement with the Northern Territory Government.
The proposed gas supply agreements would underwrite the drilling program and provide Central with a reliable government-backed income stream well into the next decade.