Central Petroleum Ltd (ASX:CTP) (Central or Company) today announce a multistage farm- out agreement with French energy company Total for the exploration of approximately 6 million acres. The agreement covers four highly prospective areas in the vicinity of recent discoveries in the Southern Georgina Basin in central Australia, namely, EP(A) 132 in the Northern Territory and ATP(A)909, ATP(A)911 and ATP(A)912 in Queensland.
The exploration will start with an investment by the joint venture of US$60 million for stage one, and, at Total’s election, US$130 million for stages two and three. Should
Total continue and fulfil its funding obligations for stages 2 and 3 Total will earn in
increments to a total of 68 percent in the permits. Total is required to fund 80 percent of exploration and appraisal costs over four years to which Total has committed the first US$48 million of expenditure for stage one after which Central will fund the next US$12 million.
Central will operate the farm-out areas for the first four years and after completion of stage 3 Total will assume operatorship for 90% of the area. Central will retain
operatorship of the upstream activities on the remaining 10% of the area.
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