logo-loader

Arrow Energy Increases Gross 3P Gas Reserves by 61% in major reserves upgrade

Last updated: 01:00 05 Feb 2009 AEDT, First published: 00:00 05 Feb 2009 AEDT

no_picture_pai

Arrow Energy (ASX:AOE) has announced a further major reserves upgrade certified by consultants Netherland, Sewell and Associates Inc (NSAI).

Arrow’s Net 2P Reserves increases to 1,177 PJ and Net 3P Reserves to 3,676 PJ after allowing for the recent sale of 30% of Arrow’s tenement interests to Shell.

Arrow Energy CEO Nick Davies said: “It is pleasing to announce a further upgrade to our reserve position. This substantial upgrade is testament to the quality of our acreage as evidenced through reserve additions from several new geographic locations across both our Surat and Bowen interests including new coal seams not previously certified. Our focus going forward is to continue to prove up our 3P reserves and systematically move these to the 2P category. Our goal is to add approximately 1,000 PJs of gross 2P reserves each year through an intensive and continuous reserves certification program. Further reserves certification work is currently in progress with a number of production test wells and 34 pilot programs underway that will allow us to do this in a relatively short timeframe.”

On successful completion of the proposed takeover of Pure Energy (announced December 22, 2008) Arrow’s Net 2P Reserves will be 1,571 while net 3P reserves will increase to 6,148 PJ and Arrow’s gross uncontracted 2P reserves will be 2,399 PJ – more than sufficient to underpin the currently proposed 1.5 mtpa LNG train at Fisherman’s Landing. Post the Pure acquisition, gross 3P reserves will be 10,636 PJ providing a solid platform for consideration of future growth opportunities for Arrow’s domestic gas supply and electricity generation businesses and LNG export supplies.

Mr Davies said, “Arrow’s gross 3P reserves of 8,164 PJ now represents around 20% of Queensland’s certified 3P reserves. Once we have completed the Pure Energy takeover this will increase to 10,636 PJ or approximately 25% of Queensland’s certified 3P reserves. Our experience to date gives us a high level of confidence that we will be able to convert a significant portion of these to 2P reserves. Our demonstrated success in certifying reserves adds further support to our bid for Pure Energy as Pure shareholders stand to benefit from these and future reserves upgrades and the associated monetisation strategy.

It is also pleasing to note that Arrow and its partners will have sufficient uncontracted reserves to supply gas to at least two 1.5 mtpa LNG trains further supporting our drive to secure FID for that project by year end. The substantial 3P reserves allow us to continue progressing further expansion opportunities for domestic gas supply and electricity generation as well as LNG exports.”

Update in earnings guidance

Arrow Energy has announced an updated earnings guidance for the half year ended 31 December 2008 with pre-tax profit expected to be approximately $345 million.

There have been a number of transactions announced and completed by Arrow in the period 1 July 2008 to 31 December 2008 that have materially increased the earnings of Arrow compared to the prior year corresponding period. The most significant impact has been the partial completion of the sale of 30% of Arrow’s interests in its Australian tenements to Royal Dutch Shell group which resulted in a pre-tax gain on disposal of approximately $310 million.

Arrow intends to finalise and release its audit reviewed half year results in the week commencing 23 February 2009. Arrow will also present full year guidance after the release of the audit reviewed half year results.

Arrow was trading up 7%, at $2.31.

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

5 hours, 44 minutes ago