17/02/2009 - 10:53

Central Petroleum soars on coal report

17/02/2009 - 10:53

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Shares in South Perth-based Central Petroleum soared 56 per cent before entering a trading halt, following a report that more than a trillion tonnes of coal could be extracted on the South Australia and Northern Territory border.

Central Petroleum soars on coal report

Shares in South Perth-based Central Petroleum soared 56 per cent before entering a trading halt, following a report that more than a trillion tonnes of coal could be extracted on the South Australia and Northern Territory border.

Shares in Central jumped from yesterday's close of 9.6 cents to a high of 15c, before last traded at 13.5c before the halt was enacted.

The boost stems from a report commissioned by Central which described the Pedirka Basin in the Simpson Desert as "sufficiently promising".

It found potential for up to 1.3 trillion tonnes of coal above 1,000 metres and more than 2 trillion tonnes when including deeper coal sections.

"This is a significant conclusion," Central Petroleum's managing director John Heugh said on Tuesday.

"This is a further step along the confidence path to vindicate substantive coal focused drilling throughout the basin."

On the back of the report's findings, Central Petroleum said it would now explore the potential for various technology applications, such as underground coal gasification, coal bed methane and gas-to-liquids.

"We are ... encouraged and heartened at many levels about the near term coal technology options for the Pedirka Basin," said Mr Heugh.

The Perth-based company commissioned the report after discovering over 100 metres of cumulative coal seams in the Purni Formation late last year.

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