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Central off to drill in the Red Center

Australian producer raising funds for drilling wells in the Northern Territory

Australian onshore exploration and production company Central Petroleum is raising up to A$25 million (US$19.6 million) to fund a drilling programme at its producing gas fields in the Northern Territory.

The company has just completed a share placement at A$0.10 per share that earned A$9.2 million, and will raise up to A$18 million in a 5-for-12 fully-underwritten traditional non-renounceable entitlement offer, also at A$0.10 per share.

Central said the drilling programme will comprise of four horizontal wells - with no intention of hydraulic fracturing - with the aim of a big boost in gas reserves in time to have deliveries coincide with the new Northern Gas Pipeline being operational in the second half of 2018.

The wells will focus on targets where gas is already known to exist; two targets at the Mereenie field, one at the Palm Valley field, and one at the Ooraminna field.