Total Signs Shale Gas Exploration Deal with Central Petroleum

Central Petroleum has inked a farm-out agreement with French energy company Total for shale gas exploration of approximately 6 million acres of four highly prospective areas in central Australia. 

The agreement covers areas in the vicinity of recent discoveries in the Southern Georgina Basin in central Australia, in 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 of $60 million for stage one. Total will have the option to hike the investment to $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% of exploration and appraisal costs over four years to which the French firm has committed the first $48 million of expenditure for stage one after which Central will fund the next $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.