Central Petroleum Limited

Our presentation today covers Central Petroleum's annual results for 2025. I'm Leon Devaney, CEO and Managing Director of Central Petroleum, and I am joined by our CFO, Damian Galvin. Throughout today's presentation, you are welcome to submit questions online, which we will address at the end. Please ensure you read the legal disclaimer that applies to this presentation. Last week, we released our 2025 annual report. Consistent with our quarterly reports, the company has achieved several key milestones that highlight strong operational and financial progress. A major success was the conclusion of a competitive gas marketing effort that resulted in a significant multi-year gas sales agreement that de-risks and strengthens the company's future cash flows. Operationally, two new production wells were drilled and brought online at Rainey, These wells were completed ahead of schedule, under budget, and delivered production rates well above initial expectations, demonstrating effective project execution and strong asset performance. On the financial front, the company restructured its debt with a revised amortization schedule extending to 2030, eliminating refinancing risk and increasing our financial flexibility. As a result of these achievements, the company has the capacity to undertake a share buyback program, marking its first shareholder return event since listing nearly 20 years ago. I'll now hand over to Damian to go through our annual results in more detail.

Thanks Leon. FY 2025 has certainly proven to be a pivotal year for the company and the results won't come as a surprise for those who've been following our quarterly results. Our bottom line statutory profit of $7.7 million is I think in many ways more satisfying than the $12.4 million profit we posted last year and that's because last year's profit included $13.8 million profit from selling our interest in the range coal seam gas permit in Queensland. So when you strip out those one-off profits, you get a much better feel for how the business has turned around. So the underlying profit is $6.5 million this year compared with an underlying loss of $1.4 million the year before. So that's a significant turnaround and more than two-thirds of that profit was recorded in the second half of this year as those new gas sale contracts came into effect. Now, the improvement in performance is evident across most of the metrics. You start with the revenues, $43.6 million. That's up 17% from last year, largely due to the increase in realised price, which was up 19% to $9.02 per gigajoule equivalent over the full year. And that flows through to the increased sales margins and the underlying EBITDAX which was up 43% at $19.6 million. So there's some other items in there. The result also benefits from lower corporate and admin costs and reduced exploration activity this year. Higher interest rates have kept finance costs relatively steady and we recognise a profit of $1.3 million on the sale of some surplus land near Alice Springs. An excellent result all round. Let's have a closer look at some of the main drivers. The catalyst for the transformation lies with the new gas contracting strategy that we implemented early last year. And the impact from that on revenues was twofold. Firstly, the new contracts resulted in more reliable volumes. In the first half of the year we had the benefit of those available contracts wholly within the Northern Territory. and they were mitigating the impact from the extended closure of the Northern Gas Pipeline. In the second half of the year, we had new contracts that also provided reliable offtake within the Northern Territory when we couldn't deliver gas to our customers due to pipeline closures. Secondly, those new contracts which replaced the legacy contracts from 1 January this year, they're at higher prices. And the chart on the right shows the 27% jump in the second half average prices. And that flows through to the bottom line in cash flows. I'll come back to margins shortly. Now, the 17% increase in revenues was also boosted by record demand for gas from the dingo field. and the two new marini wells which were on line from quarter three providing much needed additional volume. In terms of other revenue, we also recognised $1.3 million from the release of take or pay proceeds and were able to pass through some of the increased Northern Territory regulatory costs to some customers and we covered $600,000. Coming back to volumes, the two new Marini wells were successfully drilled and commissioned. They were ahead of schedule, they were under budget and they'd outperformed the pre-drill expectations. So it was a great result and we're very happy with the outcome from those wells. Oil production at Marini was also high, it was up 14% and that was largely as a result of the flare gas compressor that we commissioned and installed late in the previous financial year. However, the oil offtake was partially constrained in the fourth quarter and that did have a knock-on effect on gas production. We've implemented some solutions recently so that volume shouldn't be affected going forward. We do continue to see some seasonal demand fluctuations, particularly when the NGP is closed. You can see on the chart the lower volumes experienced in late winter, early spring, both last year, which is on the far left of the chart, and also in the current quarter, which is on the far right. The difference this year is that we've protected our cash flows through take or pay arrangements in our recent gas supply agreements. So while we're expecting the September quarter gas volumes to be about 8% lower than the June quarter, cash flows will be less affected. The higher prices have flowed through to margins. So if you exclude depreciation, our gross margins increased by 26%. They're up from $3.65 per gigajoule equivalent last year up to $4.60 this year. Our cost of sales, they rose about 6% on a per-unit basis, and some of that's due to the higher cost of our return to over-lift gas. The cost is linked to the sales price, so it's naturally higher. The improved margin that we saw was really just from six months of improved contract pricing, so we could expect a further improvement for the full year to June next year, and that's also going to benefit further once the over-lifted gas is all returned in May next year. Our focus on cost control continues though and we do pride ourselves on being a low cost operator. For example, the chart on the bottom left shows the progress that we've made in reducing our net corporate and administration costs. They're down 39% from last year and 60% lower over the last two years. The improved financial performance and cash flows has us in a much stronger financial position than previously. Cash at June 30 was $27.5 million and net cash, that is cash less debt, was $3.9 million. That's our highest in over a decade. Our loan facility is in good shape. It's locked in until 2030. We don't have any mandatory principal repayments until March 2027, but we do have the ability to make earlier repayments if we choose to do so. So this Stronger Balance Sheet has enabled us to commence our first program of shareholder returns through an on-market share buyback. We could buy back up to 10% of issued capital over the next 12 months and this would cost a relatively modest $4 million at current prices or $2 million if we only bought back 5%. Now we've appointed Morgans to manage this process for us, although it should be noted that the total number of shares ultimately bought back over the 12-month period may be significantly less than the 10% cap and our trading activity will be dependent on considering various factors including, for example, the prevailing share price, market liquidity, regulatory requirements and trading constraints under the ASX listing rules, maturity of potential commercial transactions that could be material to the share price and other capital allocation opportunities including growth opportunities and debt repayment. So although we haven't yet been able to start buying on market, consistent with that buyback strategy to reduce issued capital at the current market prices, we've cash settled some of the vested equity incentives which would otherwise have converted to shares this month and that's about 8 million shares that we've effectively taken off the market already. Now another achievement that might have gone unnoticed in the annual report was the reserves upgrade. and that arose from the outperformance of those two new marini wells and also the continuing ongoing consistent performance of the dingo field. So the upgrade of Proved and Probable as 2P gas and oil reserves means we effectively replaced 96% of our FY 2025 production. And so that's an indication of the ongoing reliability and producibility of these unartispaced fields. Look, in summary, it's a satisfying result across the board. It's got us in a strong financial position. So with that, let's let FY 2025 fade away into the rearview mirror and I'll hand you back to Leon.

Thanks, Damien. While we were pleased with last year's performance, our focus remains on maintaining momentum and enhancing shareholder value, including improving the share price. With a cash balance exceeding $25 million and a strong portfolio of firm gas contracts, we are well positioned to pursue both growth and shareholder returns. In addition to the share buyback program, we are evaluating more substantial forms of shareholder returns, such as sustainable dividends, as part of a broader capital allocation strategy that balances near-term value with long-term growth. Our existing producing assets continue to be a vital avenue for increasing shareholder value with opportunities to rapidly boost production through the drilling of new wells. We have made significant progress in planning and securing approvals for future drilling programs at Palm Valley and Marini. These investments are obviously dependent on obtaining long-term gas contracts at acceptable margins, so we will persist in actively marketing these volumes to potential customers. Additionally, we are advancing efforts to restart exploration in our sub-salt permits, with the initial activity likely to be an appraisal well at Mt. Tiddy, a discovery with high helium and hydrogen potential. Concurrently, we are progressing farm-out discussions for conventional exploration in the western Amadeus Basin, focusing on EP-115, which is on trend with our existing producing fields at Marini and Palm Valley. Beyond our current portfolio, We remain open to lower risk, high impact growth opportunities that align with our core strengths and support reserve expansion and revenue diversification. In conclusion, we are confident in our ability to sustain the momentum generated over the past year well into the future. We have significant opportunities for capital allocation, including further returns to shareholders And as mentioned earlier, we are diligently working to deliver some of these growth opportunities over the coming months. I want to assure our shareholders that as we pursue growth, we will remain disciplined, ensuring that any transaction adds value and effectively leverages the strong financial foundations we have built. That's the end of the formal presentation, so we can now move on to questions and answers.