Highlights

  • FY26 sales revenue benefited from higher realised prices despite reduced volumes.
  • A Northern Territory gas agreement supports drilling at Palm Valley.
  • The June quarter included maintenance interruptions and lower sales volumes.
  • Repayment of a gas overlift obligation changed the cost profile at Mereenie.
  • Pipeline access, drilling outcomes and oil offtake remain important operational considerations.

Central Petroleum Limited (ASX:CTP) is an Australian oil and gas exploration and production company operating onshore fields in the Northern Territory. Its Mereenie, Palm Valley and Dingo assets supply gas to domestic customers, while its exploration interests extend into other Australian basins. During 2026, the company reported changes to gas contracts, drilling activity and its cost structure, and production constraints.

FY26 Revenue Reflects Pricing and Volume Changes

Central Petroleum (ASX:CTP) reported unaudited FY26 sales revenue of $43.9m, an increase of 3.7% compared with FY25, in its June 2026 quarterly activities report. The company attributed this outcome to a 10% rise in realised prices, which more than offset a 6% reduction in sales volumes. Lower volumes reflected oil offtake constraints and pipeline restrictions in H1 FY26.

For Q4 FY26, ASX:CTP recorded sales revenue of $10.9m, down 3.9% from the March quarter. Quarterly sales volumes were approximately 1.0 PJe, affected by scheduled maintenance at Mereenie and preparatory works for connections at Palm Valley. Higher average realised prices partly offset the reduction in deliveries.

Palm Valley Wells and Gas Supply Agreement

An agreement with the Northern Territory Government provides for up to 21 PJ of gas supply through to the end of 2034, representing 10.5 PJ attributable to Central Petroleum (ASX:CTP). The contract supported the joint venture’s decision to proceed with two additional Palm Valley wells. The first well, PV14, commenced drilling in July 2026, following site preparations and equipment procurement in the June quarter.

The project is intended to use existing field infrastructure where practicable. The company indicated that, if the two wells meet their production objectives, they could restore Palm Valley sales capacity towards the facility limit of approximately 14 TJ/d on a gross joint-venture basis. These figures are development objectives rather than achieved production.

Cash Position and Mereenie Cost Changes

At 30 June 2026, ASX:CTP held $20.4m in cash, compared with $19.5m at 31 March, and reported net debt of $5.0m. Its existing financing arrangement was expanded to provide up to $15m in working capital for Palm Valley drilling. June-quarter exploration and appraisal expenditure was $2.0m, with capital expenditure of $1.6m.

In May 2026, Central Petroleum (ASX:CTP) completed deliveries against its previously overlifted gas liability at Mereenie. Management estimated that ending these repayments would reduce cash operating costs by approximately $7m annually. The company identified the September quarter as the first period expected to reflect the full benefit, subject to operations.

Production Constraints and Exploration Activities

Oil offtake at Mereenie remained constrained during Q4 FY26, with sales suspended indefinitely from mid-June pending alternative arrangements. Planned maintenance also interrupted gas deliveries. Central Petroleum (ASX:CTP) therefore remains exposed to reservoir performance, infrastructure availability and customer delivery requirements across its producing portfolio.

Beyond the Amadeus Basin, the company continued technical planning for prospects in the Otway and Cooper basins. It also retained an interest in the Mt Kitty/Jacko Bore appraisal opportunity after withdrawing from the Dukas joint venture. These activities remain subject to exploration, funding and permitting uncertainties.

Key Insights

Central Petroleum (ASX:CTP) entered the second half of calendar 2026 with new gas supply commitments, Palm Valley drilling under way and a revised Mereenie operating cost base. Its FY26 results showed that improved realised prices could offset lower sales volumes, while future operating disclosures will clarify the contribution of new wells and the resolution of existing offtake constraints.