Central Petroleum’s PV14 Gas Well Tests Below Target as Water Questions Hang Over Output

PV14 drilled and being completed as a gas producer at Palm Valley

Central Petroleum (ASX: CTP) has advised that the PV14 well at Palm Valley has been drilled and is now being completed and tied into the Palm Valley production facility as a gas producer. The headline flow test number came in below what the company was aiming for, and that shapes how you should read the update.

A short rig flow test measured gas flows of 3.2 TJ/d (100% JV). A terajoule per day (TJ/d) is a measure of how much energy in gas a well delivers each day, and “100% JV” means the figure covers the whole joint venture, not just Central’s share.

Key points from the 8 October 2026 announcement:

• The flow test measured 3.2 TJ/d (100% JV)
• PV14 is expected to be tied into the Palm Valley production facility and commissioned by the end of October
• Drilling of PV15 will commence once completion activities are concluded at PV14

Managing Director and CEO Leon Devaney acknowledged the shortfall directly:

Leon Devaney, Managing Director and CEO

“PV14’s initial test result was below our target and less than recent wells, such as PV12 and PV13…”

Commissioning later this month matters most here. Central said it expects a clearer indication of long-term production rates once the well comes online.

Flow test results and what they mean

Test details

The table below sets out the key parameters Central disclosed under ASX Listing Rule 5.30.

The joint venture holds Central 50%, Echelon Resources Limited (ASX: ECH) 35% and Cue Energy Resources Limited (ASX: CUE) 15%.

Gross pay is the total thickness of the gas-bearing zone, while net pay is the portion judged productive. Here, that is 45m out of 200m.

Initial production outlook

Extrapolating the flow test conditions indicates the well would initially produce at approximately 3 – 4 TJ/d, assuming a typical gathering system backpressure. That estimate does not account for any further clean-up or ingress of water.

Central also noted that short-duration production tests through a rig are insufficient to accurately determine online production rates. Treat the 3.2 TJ/d figure as an early indicator, not a forecast.

The water question

Although no water reached surface during the flow test, subsequent flows to vacuum at surface showed evidence of water production. Central says the reservoir’s nature makes it difficult to distinguish perched, disconnected water from water drawn from depth through open fractures.

The company outlined two possible outcomes:

• The water may be residual standing water in the well that continues to clean up, improving production rates over time. This would reflect PV12, where water was isolated using packers and the well has since produced dry gas.
• Alternatively, it may indicate water ingress above the isolated hole section, requiring further isolation with packers or, in the worst case, cessation of production.

Both outcomes remain open. Commissioning should show which direction PV14 is heading.

How natural fracture gas wells work

Palm Valley produces gas from natural fractures, meaning cracks already present in the rock that let gas move toward the well. Central states that no hydraulic stimulation (fracking) has been conducted.

The reservoir is tight, which means the rock itself lets little gas through, so flow depends heavily on connecting with those fractures. Central says this makes it difficult to tell perched, disconnected water from water drawn from depth through open fractures, which is why the source of the water at PV14 is hard to pin down.

The gas composition has not been analysed. It is expected to be consistent with current P1 production, which contains around 98% hydrocarbons and minimal inert content.

For you as an investor, the takeaway is simple. A 90-minute rig test is a snapshot, so post-commissioning production rates will say far more about PV14 than the test did.

PV15 and the Palm Valley forward plan

After PV14 is completed, the Ensign 974 rig will move to spud PV15, the second well in the two-well campaign. Together, the two wells are aiming to restore Palm Valley plant sales capacity to approximately 14 TJ/d (100% JV) and deliver at least 10 PJ of gas (100% JV) over their operating lives. Actual production rates will depend on well performance and existing field decline.

The investment is underpinned by the new Northern Territory Government Gas Supply Agreement announced by Central in April.

According to Central, PV15 differs from PV14 in several ways:

1. It is located 2.3km from PV14 at surface and approximately 3km away at planned total depth
2. It will target the southern flank of the Palm Valley anticline, rather than the northern flank targeted by PV14
3. It will be only the second well after PV12 to directly access the southern flank of the field
4. It is closer to the field crest and further up-dip from possible water sources

Mr Devaney said “A strong result at PV15 would keep our target sales capacity of 14 TJ/d attainable.” That framing suggests PV15 now carries more weight in the campaign’s outcome.

Investor webinar

Central will hold an investor webinar covering the FY2026 Annual Report and the PV drilling program on Thursday 15 October at 11am AEST. Login details will be advised separately.

Central is an established ASX-listed Australian oil and gas producer and the largest onshore gas operator in the NT.

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