The merged company, expected to be the leading, stand-alone coal seam methane company in Australia and the Asia-Pacific region, will have multiple projects, including Tipton West and Daandline, spanning a tenement area of 90,000 square kilometres.

The bidder’s and target’s statements released on Monday, also outline Arrow’s and CH4’s offer for BHP Billiton’s share of the Moranbah Gas project.

Arrow chief executive Nick Davies said the scale of the companies post merger would allow increased financial strength, improved ASX index position and liquidity, diversification of earnings, customers and markets, broadened technical competence and complementary asset portfolios and earning streams.

“Between the two companies, we are targeting around 60 petajoules (PJ) per annum of gas sales within the next three years or 27,000 barrels of oil equivalent per day. Hence we’ll be a major supplier of energy to Eastern Australia with aspirations to supply considerably more through a gas-to-liquids conversion plant in Queensland,” he said.

On June 2, Arrow acquired 18 million shares, 9 million ordinary and 9 million 30c options, in Pure Energy Resources.

The $1 million investment will mean Pure Energy’s assets in the Bowen Basin will be complementary to Arrow’s current projects in Gladstone, Queensland.

“Strategically, if successful, these projects could feed into any future pipeline to Gladstone and to a future gas-to-liquids project,” Davies said.

The agreement between Arrow and Pure Energy includes allowing Arrow to directly farm-in to two of the Bowen Basin blocks.