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BRISBANE, Australia, 8 March 2007 (Starlink Media)
Arrow Energy NL on Thursday said it would establish a coal seam gas base in the energy-hungry Chinese market, to capitalise on China’s higher gas sales margins and the country’s ambitious targets to develop its huge coal bed methane (CBM) resource.
Arrow’s chief executive Nick Davies said the deal with US owned Orion Energy International Inc, which specialises in CBM operations and services in China, was identified by Arrow’s international arm Arrow Global CBM Pty Ltd.
Mr Davies said Orion has the rights to operate coal seam methane businesses in two concessions in China and would provide an entry point into China for future growth.
He said the deal proved the merits of the company’s recent acquisition of a portfolio of international CBM opportunities encompassing China, India, Indonesia and Vietnam.
“Arrow is confident of replicating its success as one of the pioneers of the Australian coal seam gas industry in China, which has one-sixth of the world’s total CBM resource,” he said.
“Arrow Global CBM and Orion will undertake a joint study of two concessions in China’s CBM-rich basins of Ordos and Qinshu, gaining a 5 per cent share in both blocks with the option to farm in for a further 25 per cent based on funding a work program of up to $10 million.”
Already the world’s second-biggest energy consumer, the deal offers significant opportunities for both companies to grow their businesses in China by capitalising on their existing in-country relationships and extensive databases, Mr Davies added.
“The study phase of the farm-in is set to be completed within two months, after which the assets will add to Arrow Global CBM’s portfolio,” he said.
“Arrow Global CBM is targeting adding further assets in Indonesia and Vietnam to its portfolio, and these together with Arrow’s Indian tenements will form the basis of our planned international IPO of Arrow Energy International later this year.”
Arrow announced on January 18 the acquisition of 50 per cent of the issued capital of Arrow Global CBM, with a two-year option to acquire the remaining equity.
“India, China and Indonesia have enormous potential resources of coal seam gas, and all three are experiencing long-term critical supply shortages of gas,” Mr Davies said.
“Following the award of three CBM blocks in India in October 2006 and our deal to farm in to Indonesian tenements announced last December, Arrow continues to add international assets as part of our long term, high margin strategy with the overall goal of becoming the region’s technical partner of choice.”
About Arrow Energy
Arrow Energy NL (ASX code: AOE) is one of Australia’s leading coal seam gas companies, focusing on the exploration and development of CSG resources in south and central Queensland and northern New South Wales. The company will be supplying Queensland with 25 per cent of its daily gas needs by the end of 2007 and is exploring business development opportunities in China, India, Indonesia and Vietnam.
Arrow Energy NL on Thursday said it would establish a coal seam gas base in the energy-hungry Chinese market, to capitalise on China’s higher gas sales margins and the country’s ambitious targets to develop its huge coal bed methane (CBM) resource.
Arrow’s chief executive Nick Davies said the deal with US owned Orion Energy International Inc, which specialises in CBM operations and services in China, was identified by Arrow’s international arm Arrow Global CBM Pty Ltd.
Mr Davies said Orion has the rights to operate coal seam methane businesses in two concessions in China and would provide an entry point into China for future growth.
He said the deal proved the merits of the company’s recent acquisition of a portfolio of international CBM opportunities encompassing China, India, Indonesia and Vietnam.
“Arrow is confident of replicating its success as one of the pioneers of the Australian coal seam gas industry in China, which has one-sixth of the world’s total CBM resource,” he said.
“Arrow Global CBM and Orion will undertake a joint study of two concessions in China’s CBM-rich basins of Ordos and Qinshu, gaining a 5 per cent share in both blocks with the option to farm in for a further 25 per cent based on funding a work program of up to $10 million.”
Already the world’s second-biggest energy consumer, the deal offers significant opportunities for both companies to grow their businesses in China by capitalising on their existing in-country relationships and extensive databases, Mr Davies added.
“The study phase of the farm-in is set to be completed within two months, after which the assets will add to Arrow Global CBM’s portfolio,” he said.
“Arrow Global CBM is targeting adding further assets in Indonesia and Vietnam to its portfolio, and these together with Arrow’s Indian tenements will form the basis of our planned international IPO of Arrow Energy International later this year.”
Arrow announced on January 18 the acquisition of 50 per cent of the issued capital of Arrow Global CBM, with a two-year option to acquire the remaining equity.
“India, China and Indonesia have enormous potential resources of coal seam gas, and all three are experiencing long-term critical supply shortages of gas,” Mr Davies said.
“Following the award of three CBM blocks in India in October 2006 and our deal to farm in to Indonesian tenements announced last December, Arrow continues to add international assets as part of our long term, high margin strategy with the overall goal of becoming the region’s technical partner of choice.”
About Arrow Energy
Arrow Energy NL (ASX code: AOE) is one of Australia’s leading coal seam gas companies, focusing on the exploration and development of CSG resources in south and central Queensland and northern New South Wales. The company will be supplying Queensland with 25 per cent of its daily gas needs by the end of 2007 and is exploring business development opportunities in China, India, Indonesia and Vietnam.
