Central Petroleum Limited: New Gas Sale Agreement underwrites two new Palm Valley wells

Brisbane, Australia - Central Petroleum Ltd. (ASX:CTP) (FRA:C9J) (OTCMKTS:CNPTF) advised that it has executed a binding multi-year Gas Sales Agreement ("GSA") with the Northern Territory Government ("the NTG") that will underwrite investment in two new wells at Palm Valley.

Highlights

- Multi-year GSA to supply up to 21 PJ of gas (10.5 PJ Central share) through to the end of 2034.

- Two new wells to be drilled at Palm Valley with drilling anticipated to commence in mid-2026.

- The new wells are expected to initially increase Central's gas production capacity by circa 40%.

- Increased loan facility available.

- Replaces gas sales arrangements outlined in the previously-announced letter of intent with Power and Water Corporation.

The GSA will support the Palm Valley Joint Venture in drilling two new wells to supply up to 21 PJ of gas (10.5 PJ Central share) on a firm basis from 2H 2026, through to the end of 2034. The GSA has a fixed market price with CPI escalation and take-or-pay provisions.

The Palm Valley JV has made a Final Investment Decision to drill the two wells on an accelerated basis. Preparations are already well-advanced, with key approvals in place or underway, orders placed for long lead items, a drilling rig contracted and civil works substantially complete. Drilling for the first well is scheduled to commence in the middle of this year, with production from the new wells anticipated to be brought online progressively over the second half of 2026.
Palm Valley's potential to quickly supply a material volume of new gas to the market makes it particularly attractive. If the wells deliver at their target production rate, they would initially increase Central's gas production capacity by circa 40%.

PWC LOI

This GSA replaces the proposed gas supply arrangements previously outlined in a Letter of Intent announced in December 2025 with the Northern Territory's Power and Water Corporation ("PWC LOI"). Whilst the gas supply arrangement contemplated under the PWC LOI also included new gas supply from the Mereenie Gas Field, these volumes are not included in the GSA. Central will market these volumes to customers seeking reliable longterm gas supplies backed by proven reserves.

Expanded loan facility

Central expects its share of Palm Valley drilling and completion costs to be approximately $26 million, inclusive of an allowance for possible elevated diesel prices. The acceleration of drilling at Palm Valley allows this transaction to take advantage of current NT market dynamics and generate sales revenue months earlier than would otherwise have been the case.

To maintain prudent working capital reserves while drilling at Palm Valley, along with exploration wells planned for the Cooper and Otway Basins, Central has increased its existing Macquarie Bank loan facility. The increased facility provides access of up to $15 million, available for drawdown through to 31 December 2026. Any funds drawn under the increased facility will be repayable in equal quarterly instalments from March 2027 to December 2029. Interest charges and other terms are as per Central's existing loan facility, and the loan drawdowns can be repaid early without penalty. Central expects to require only $8 to $10 million of this increased facility, with the remaining balance available as a contingency.

CEO Comments

Central's CEO and Managing Director, Leon Devaney, said "It has taken time to get the settings right, but we now have a significant GSA for the Palm Valley Joint Venture.

Importantly, it underwrites an investment in two Palm Valley appraisal wells on an accelerated basis. The new wells will replicate the extended lateral designs that were successful in the last Palm Valley drilling program.

If the two wells are successfully delivered as planned, sales under the GSA will generate strong returns and increase free cash flows from later this year. Combined with our exploration activity in both the Cooper Basin (targeting oil and gas) and the Otway Basin (targeting gas), also planned in FY2027, we are positioned with several exciting near-term growth opportunities."

About Central Petroleum Limited:

Central Petroleum Limited (Central) is an established ASX-listed Australian oil and gas producer (ASX:CTP) with exploration and appraisal permits in the Northern Territory (NT). Central has grown to become the largest onshore gas operator in the NT, supplying residential and industrial customers in the NT and wider Australian east coast market.

Central is seeking to become a major domestic energy supplier, in addition to helium and naturally occurring hydrogen, with exploration, appraisal and development plans across 169,112 km2 of tenements the NT, including some of Australia's largest known onshore conventional gas prospects in the Amadeus Basin.

Source:
Central Petroleum Limited

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