Managing director John Heugh said the company planned to drill three targets by the end of the year, including a potentially high-impact helium prospect.

Central has already identified four targets ready to drill: Blamore, which it says has an upside of 100 million barrels (MMbbl) oil; Ooraminna, with an upside of 700 billion cubic feet of gas; Waterhouse, which could have up to 1.7 trillion cubic feet of gas; and Mt Kitty, with up to 1.7Tcf of conventional gas, and 105Bcf of helium and also likely to have condensate if petroleum is present.

“Drilling has been delayed in the case of Blamore by difficulties with the Central Land Council but ministerial intervention is expected to hasten the process,” Heugh said.

“In any case, the company will have three other drill-ready prospects apart from Blamore within weeks as recently acquired seismic is processed and mapped.

“Subject to the road proposal to access Blamore being approved, Central wants to start drilling Blamore first and as soon as possible but even if difficulties prevail with the land council, there are three other targets to drill.”

In addition, a $6 million 1000km 2D seismic acquisition, processing and mapping program is also planned to start before the end of the year.

A recent farm-out memorandum of understanding is being formalised with Petroleum Exploration Australia.

This could result in 40% of the funding for 54 wells and $54 million of seismic being provided by PXA in order for it to win a 20% interest in the permits currently operated 100% by Central.

Other similarly promoted farm-in arrangements are under discussion and negotiation, according to Heugh.

In addition to funding from farm-in partners, the company has $A4.5 million in the bank and is hoping to get several million dollars from Martin Place Securities, which is underwriting options that are due to expire at the end of the month.

Providing certain conditions are met, the broker has agreed to underwrite a minimum of 20 million out of 39.5 million Central Petroleum options due to expire on June 30.

The options have an exercise price of 20c per share.

Subject to market conditions, including Central’s share price being quoted on the ASX and remaining above 20c/share during the last five trading days leading up to the relevant option expiry date, Martin Place plans to underwrite the conversion to shares of any of unconverted options to a minimum of 20 million.

The broker can also choose to increase the underwritten quantum to the full 39.5 million options.

Central also plans to make a further non-renounceable entitlements issue of one new option for every two shares held priced at 2.5c per option, with each option expiring on June 30, 2010 and having a conversion price of 25c.

The proposed record date of the fully underwritten rights issue would be July 9.

Martin Place Securities co-principal Barry Dawes said his firm has been a major supporter of Central Petroleum and its consolidation of the tenements in the Amadeus and Pedirka basins.

“Strong technical evidence supports a re-rating of both these basins,” Dawes said.

“The last onshore well in the Northern Territory was drilled 15 years ago in the CRA-operated Magee-1 in 1992.”

This was the only well in the Amadeus Basin’s 37-well history that penetrated the Gillen Salt Formation into the Heavitree Sandstone, according to Dawes.

“It had an interesting flow cocktail that consisted of 9 percent condensate, 39 percent methane, 6 percent helium and 40 percent nitrogen from an unexpectedly thin Heavitree section,” he said.

“The CRA well completion report suggested that Magee could be contiguous to an oilfield.”

Central should start drilling later this year, finally restarting exploration in the basin, which the explorer has described as the least-explored producing basin in the world.

“According to the Northern Territory Geological Survey, the Amadeus has potential in conventional petroleum resources of up to 6 billion barrels of oil equivalent in yet-to-find petroleum resources,” the company said yesterday.

But the basin could also hold significant reserves of helium, a valuable gas, selling at approximately 20 times the value of an equivalent volume of petroleum gas, according to Central.

“The basin’s sedimentary salt layers are considered to be nature’s most efficient sealing mediums, capable of sealing helium, the second-most mobile element known,” the company said.

“The sub-salt Heavitree Formation produced helium gas to surface of an unusually high concentration and the company considers the Heavitree/Gillen play to be of very great importance in its exploration plans going forward.”

Most of the Amadeus is underlain by the Heavitree/Gillen sediments, and Central operates virtually the whole of the 200,000 square kilometre basin outside the rapidly depleting Mereenie/Palm Valley gas fields run by Santos and Magellan.

According to Central, there is a looming shortage of helium, which is a non-renewable resource in great demand due to its applications in nuclear magnetic resonance imaging, space launches, super-conductor production, cooling of fourth-generation nuclear reactors and other applications now being fuelled by industrial expansion, particularly in East Asia.

“Subject to various contingencies, Central plans on drilling the Mt Kitty Prospect during the latter half of 2007 in partnership with its joint venture partner, He Nuclear Limited,” the explorer said.

“The prospect is thought to have high potential of hosting 105 billion cubic feet of recoverable prospective resources of helium.

“The company also has signed a memorandum of understanding with BOC Industrial Gases aimed at a joint venture approach to developing and marketing any extractable resources of helium.”