Central managing director John Heugh told the Excellence in Oil & Gas Conference this week in Sydney that the company's Pedirka and Amadeus assets were prospective for oil, conventional gas, coal seam methane and helium, and that some targets were huge.

"We think Mt Kitty is probably the biggest undrilled seismically defined structure in onshore Australia," Heugh said.

Central is targeting a recoverable resource of up to 1.7 trillion cubic feet of conventional gas as well as up to 105 billion cubic feet of helium at Mt Kitty, which lies in the Amadeus Basin in the southwest of the Territory.

But the drilling campaign will begin further to the east, in the Pedirka Basin, which abuts the Cooper across the other side of the NT-South Australia border.

"The Pedirka is a recognised prospective province for oil exploration with many similarities to the Cooper," Heugh said.

"Previous drilling has underscored the presence of three distinct petroleum systems in the Permian, Triassic and Jurassic as well as highlighting the potential for coal bed methane prospective recoverable resources."

The first well in Central's drilling program, the Blamore-1 wildcat, is targeting up to 25 million barrels (MMbbl) of oil recoverable.

It is to be followed by up to three coal seam methane exploration wells, the first stage of exploration for resources that Central estimates to be 34-70 trillion cubic feet recoverable. These will be followed by the Simpson-1 oil well, which is targeting up to 70MMbbl of oil recoverable.

All of these wells are in the Pedirka. Some of the CSM wells will also test deeper oil and gas potential in conventional reservoirs.

Subject to drilling success and the results of new seismic, Heugh said Central might keep the rig in the Pedirka to drill additional prospects before releasing it for the 2008 Amadeus Basin drilling program, which will include Mt Kitty-1 and Ooraminna-2.

Heugh said the Amadeus and Pedirka, particularly the Pedirka, were underexplored.

The Amadeus, which contains the Santos-operated Meerenie oil field and Palm Valley gas field, has an exploration well density of just 0.2 wells per 1000 square kilometres, compared with the Cooper's 6.2 wells per 100sq.km and the Perth Basin's 1.5 wells.

In addition, the reserves discovered per well have been more than twice as high as in the Cooper average.

The Pedirka is even less understood than the Amadeus, and Heugh said Central's processing of vintage data was constantly turning up surprises.

"A review of seismic mapping carried out by Robertson Australia in the early 1990s has delineated large and robust Jurassic-Permian prospects on a southerly plunging nose," he said in a statement last week.

This feature, which Central calls the Hector Trend, is updip from the depths of the Eringa-Madigan oil kitchens. The trend crosses permits EP(A) 130 and EP 93 both operated by Central, and also impinges on the far northwest portion of EP 97 operated by Rawson Resources.

The total mapped area of closure and corresponding undiscovered oil initially in place potential of the four prospects is 450 square kilometres and 2.1 billion barrels respectively in Permian and Jurassic target horizons, according to Heugh.

Four potential four-way dip closure prospects - the Lancelot, Lamerocke, Tintagel and Galahad leads - have been mapped at Permian and early Cretaceous levels, he said.

The UIIOP figures are based on Robertson's seismic mapping from the early 1990s, which was in turn based on data acquired from the 1970s and the 1980s, according to Heugh.

"Additional seismic is possibly required to better define drilling locations, structural traps and areal closure of these leads," he said.

Heugh said Central's forthcoming conventional oil wells, Blamore-1 and Simpson-1, will test the veracity of oil generation and migration from the Eringa and Madigan Trough source kitchens. If this was confirmed, several drillable prospects could be identified.

While oil found anywhere in appreciable quantities is commercial at today's prices, Heugh acknowledged that commercialising remote onshore gas fields would difficult.

Central's answer to this problem is gas-to-liquids. Heugh said the company was planning to develop a GTL plant on a spur line from the Darwin-Adelaide railway that would produce sulphur-free diesel, naptha and jet fuel.

This plant could be as small as 10,000-17,000 barrels per day or as large as 140,000bpd.

GTL products are selling for a 20% premium over the oil spot price in today's market, he said.

A smaller plant would be operating in a break-even environment of crude oil at $US45 per barrel. A larger one would be viable at $US40 per barrel, he said.

This would not only commercialise the gas, but value-add to it, according to Central.

Central has completed two farmouts, in both cases to start-up companies (Petroleum Exploration Australia (PXA) and He Nuclear) and is working to finalise a third.

The company's farmouts have been on a two-for-one promote system, meaning Central has maintained meaningful equity while having 40-50% of its costs covered.

In addition, it has farmed into acreage held by junior explorer Rawson Resources.