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Central Petroleum bags A$27.2 million to drill, says no to fraccing

Central is the largest onshore gas producer in the Northern Territory.
Macquarie Capital and Morgans are the underwritters

Central Petroleum Ltd (ASX:CTP) has received some very strong investor support in a fully-underwritten equity raising of A$27.2 million.

The raising will be conducted at A$0.10 per share, and will include a A$9.2 million institutional placement and an A$18.0 million 5 for 12 pro-rata non-renounceable entitlement offer to existing shareholders.

Central says no to fraccing

The new funds will be used for four horizontal wells with the objective of substantially increasing the company's gas reserves in time to have delivery coincide with the Northern Gas Pipeline becoming operational in the second half of calendar year 2018.

Central said that it has no intention of fraccing.

The drilling program will focus on targets where gas is already known to exist.

Richard Cottee, managing director, commented:

"Gas is already known to exist in each of the four targets and a substantial amount of fracture modelling work has been carried-out in order to identify the target well locations.

"Subject to joint venture approvals and funding, we expect all four targets will be ready for execution by the fourth quarter."

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