On the drilling front, Arrow’s Boyne River-1 well, located 60km south of Gladstone has been well tested with water flow of up to 2,500bbls/per day and 2-3m continuous gas flare recorded. The firm’s Mount Lindesay-1 well also revealed gas content of 500 cubic feet per day.
Independent certifiers Netherland, Sewell and Associates Inc have certified Arrow’s Tipton West reserves at 1,086PJ of 3P reserves and the firm expects gas flow rates to increase as additional pilot wells are drilled in the third quarter.
The company’s Kogan North acreage revealed a ‘Probable’ of 83PJ and a ‘Possible’ of 157PJ, a result which could prove important as Arrow needs to produce 4PJ per annum for 15 years in order to meet a gas sales agreement with CS Energy.
On the commercial front, Arrow has signed a 15PJ MOU which would see gas sales over five years to the BP refinery at Bulwer Island. The gas will come from Tipton West and delivery is slated for January 2006 onwards.
The firm also has an MOU with Ergon Energy, which will seen an increase to 3.2PJ per annum on a current deal due to begin late 2005, and Arrow has received tenders for the supply of equipment on a ‘Build–Own–Operate’ basis for well-head generation facilities at sites in the Dalby area to use up to 1PJ per annum of gas from each of the Tipton and Kogan fields. Electricity generation and sales are slated for first quarter 2005 and Arrow is currently negotiating with prospective electricity buyers.
