CENTRAL PETROLEUM LIMITED — Call Transcript 2009

Oct 5, 2009

ASX Company Announcements Platform Boardroom Radio Interview

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CENTRAL PETROLEUM LIMITED BROADCAST & TRANSCRIPT

CENTRAL PETROLEUM LIMITED (CTP) provides the opportunity to listen to an audio broadcast with Mr John Heugh, MD in a presentation titled "Central Petroleum in Major Farmout to Red Sky Energy - Mr John Heugh, MD" .

To listen , simply click on the link below:

http://www.brr.com.au/event/61247

The presentation details are as follows:

• Central Petroleum in Major Farmout to Red Sky Energy - Mr John Heugh, MD

• Powered by Mr John Heugh, MD

• A transcript of the Broadcast is set out below

Suite 2 1300 667 995 50 Stanley Street brr.com.au East Sydney 2010 NSW Australia

ASX Company Announcements Platform Boardroom Radio Interview

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RADIO INTERVIEW BETWEEN JAMES MARLAY AND JOHN HEUGH, MANAGING DIRECTOR, CENTRAL PETROLEUM LIMITED, CONDUCTED ON FRIDAY, 2 OCTOBER 2009.

• Q1 Welcome to Boardroomradio. I’m joined by the Managing Director of Central Petroleum, Mr John Heugh. John, thanks very much for your time and welcome back to Boardroomradio.

• A1 Always a pleasure, James.

• Q2 The Company has provided an update on a deal that’s being transacted with Red Sky to farm into your Central Australian energy prospects. Can you start by telling us a bit about Red Sky and why you’ve selected them to be a partner?

• A2 Sure. Red Sky Energy started out its life as a company with some proprietary gas detection equipment techniques designed to be a prospect evaluation tool, I suppose. It was listed a few years ago and I think it raised a bit less than $10 million. The company appeared to have got itself into a situation where it wasn’t making a lot of progress and didn’t have much in the way of funding left. Rohan Gillespie, who’s an ex-BHP Billiton executive, who was the business development manager for their coal seam gas interests in Queensland, vended in some coal seam gas properties to Red Sky and that resulted in a major uptick of the share price. So Rohan was looking for further projects to get involved in to enhance, if you want, the portfolio of assets that Red Sky had. We had already done or reached agreement on the terms of a farm-out deal to another Rohan Gillespie company, Energy Infrastructure and Resources, on EPA130, and so it seemed like a reasonably logical thing to extend that idea, if you want, into more of a broadacre deal. As I said, Rohan was looking for further assets to add to his Red Sky portfolio. He has proven capital-raising abilities. He and his team have got proven technical expertise and business development expertise. So, all in all, it seems like the rejuvenated Red Sky Energy company will have access to capital, technical expertise and so forth, and has a got a rather dynamic guy joining the Board; that is Rohan Gillespie. So, all in all, it seems like a good idea for us to enter into an agreement with Rohan and Red Sky Energy.

• Q3 Okay. On that point, John, can you, I guess in relatively clear points, articulate the details of the deal?

• A3 Sure. The terms of the deal over the 29 different permits that it’s composed of would be that Red Sky will fund 20 per cent of the first three wells and 20 per cent of the first $3 million of seismic subsequent to them joining the joint venture on each permit. So there is another deeming provision in there that says that, if nonconventional drilling is done less than 1000 metres, each $3 million worth of expenditure on that sort of drilling will be counted as one well. So the 20 per cent applies to the initial exploration subsequent to them joining the deal or joining the joint venture on each permit. That 20 per cent increment of expenditure could range from around about 2.5 to $4 million, depending upon the mix of conventional drilling and non-conventional drilling that was done for each permit. An additional bonus for Central, of course, is the $5 million reserve premium that will be paid by Red Sky to Central upon the discovery and decision to develop each incremental trillion cubic

Suite 2 1300 667 995 50 Stanley Street brr.com.au East Sydney 2010 NSW Australia

ASX Company Announcements Platform Boardroom Radio Interview

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feet of gas or oil equivalent, which is each incremental 167 million barrels of oil that would be assessed independently at a 3P, that is proved probable and possible reserve definition and, on final investment decision, the $5 million bonus, which is indexed to CPI, would be paid for each increment forever more. So that adds a real layer of cream on the cake. So those are the essential ingredients in the deal with Red Sky Energy.

Q4 So John, Red Sky is funding 20% of the first three wells and the first $3 million of seismic in each of the 29 permits, which could add up to somewhere between $70 million to over $100 million for their contribution over a time frame of several years or so. What percentage of each permit will they retain?

• A4 “They can earn up to 10% in each permit James, that is a 2 to 1 “promote”.

• Q5 Okay, John. And just very briefly to wrap things up, are there any steps that need to take place before this deal is cemented and activity gets under way?

• A5 Well, all the documentation – the farm-out agreements and the various deeds of assumption – have all been signed by ourselves and Red Sky Energy. It is required, under the terms of the existing joint operating agreement, that PXA also sign off on certain deeds of assumption and they are compelled, under the terms of the JOA, to do so and we anticipate that those documents will be signed off in the very near future, some time probably in the next week or two. And then, of course, Red Sky has a seat at the table in any operational committee meetings that we have, and certainly they’ll be entitled then to vote. We think that that arrangement will probably expedite progression of drilling and seismic exploration generally. It’s a very common arrangement in the industry to have three parties in a joint venture so that we don’t end up in a stalemate situation. So we’ve very much looking forward to having them join the op-com meetings and assisting us in our exploration program development.

• Q4 Well, John, thank you very much for taking the time to explain the details of this transaction and giving us an update on some of the progress being made at Central Petroleum.

• A4 You’re most welcome.

INTERVIEW CONCLUDED

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Suite 2 1300 667 995 50 Stanley Street brr.com.au East Sydney 2010 NSW Australia