Central Petroleum And 2 More ASX Penny Stocks To Watch

As the Australian stock market continues to evolve, investors are increasingly turning their attention to penny stocks – shares in smaller or newer companies that trade for less than AUD$1.00. These stocks can offer high growth potential but come with considerable risk, as they often lack the financial stability and predictability of larger established companies. In this article, we will explore three such penny stocks listed on the ASX in February 2025, focusing on their growth potential and financial health.

1. Central Petroleum Limited (ASX: CTP)
Central Petroleum Limited is an Australian ASX-listed oil and gas company with a diverse portfolio of producing and prospective gas tenements across the Northern Territory (NT) and Queensland. The company's strategic shift towards the Northern Territory gas market has significantly improved its long-term financial stability and growth prospects. This shift is evident in the following developments:

* Increased Gas Sales and Revenue: Central Petroleum's focus on the NT market has led to a 10% rise in half-year sales volumes compared to the previous six months. In the December quarter, the company achieved a 3% rise in sales volumes and a 4.6% increase in sales revenue, primarily due to a new well in the Mereenie gas field.
* Improved Pricing and Contractual Certainty: Central Petroleum successfully secured new gas sales contracts at higher prices than historical averages, which will supply about half of the NT's gas demand from 2025 through to the end of 2030. These contracts reduce the company's exposure to pipeline outage risks and promise increased free cash flow.
* Strengthened Balance Sheet: The strategic shift has reduced Central Petroleum's future capital commitments, as seen in the company's exit from the Range gas project in Queensland. This move resulted in a $12.5 million cash proceeds reduction in net debt and a positive net cash position at the end of the year.
* Debt Repayment and Financial Flexibility: The company has fully repaid one of its debt layers, the pre-sold gas used to fund new production wells three years ago. This repayment, combined with the stronger market pricing and contractual certainty from the new multi-year NT-focused gas contracts, facilitated a bank loan extension, providing confidence in forward cash flow projections.



2. SciDev Limited (ASX: SDV)
SciDev Limited is a water technologies and chemical services company that has shown remarkable growth in recent years. The company's strong financial performance is reflected in its record revenue of AUD$109.2 million in FY24, a 22% increase from the previous year. This growth is supported by an underlying EBITDA of AUD$8.8 million and a net profit after tax of AUD$2.1 million, up from AUD$4.1 million and AUD$0.3 million in FY23, respectively. SciDev's strategic initiatives, such as leveraging a AUD$10 million finance facility secured with Westpac, position the company well for continued growth in FY25.

3. Orthocell Limited (ASX: OCC)
Orthocell Limited is a clinical-stage immuno-oncology company based in Australia. The company's global license and manufacturing agreement with BioHorizons, a major player in the dental industry, has validated its Striate+ product and opened doors to the largest healthcare markets. Orthocell's remarkable growth, with a compound annual growth rate (CAGR) of 93% over the past three years, highlights its potential for continued success in the global medical device market. The company's revenue breakdown shows that Striate+ Dental, its dental membrane for tissue repair, was the largest contributor with AUD$3.41 million, followed by Remplir Nerve at AUD$1.04 million.



In conclusion, the ASX penny stocks listed in February 2025 offer investors a diverse range of opportunities for growth and potential returns. By carefully evaluating the financial health and growth prospects of these companies, investors can make informed decisions and capitalize on the growth potential of these smaller, less-established companies. As the Australian stock market continues to evolve, penny stocks remain an attractive investment option for those seeking high growth potential and willing to accept the associated risks.