Arrow’s strategy has several prongs, Davies said.
The company aims to maintain and build an extensive acreage position close to markets. At each prospect it will drill low-risk and low-cost exploration wells, minimising spending until gas markets are secured, and it will aggressively certify reserves after securing markets. It will also seek funding through creative joint venture and financing arrangements where appropriate.
The Brisbane-based company has huge acreage throughout Queensland. Its most recent major deal was its acquisition of Comet Ridge’s Surat Basin acreage. Comet Ridge was Arrow’s partner in the Tipton West CBM project and Arrow now has a 100% stake in that acreage.
The Tipton project has also seen certification of reserves as well as new exploration and appraisal successes. Tipton reserves will also be sold under an agreement with the Braemer Power Partners for supply of 6PJ a year to the 450 MW Braemer Power Plant with an option for up to another 7.3PJ a year.
First sales are expected in October or November 2006 and will extend for 15 years. Further MOUs have been signed with Country Energy and Bramer II.
At the company’s other major project, Kogan North, development drilling has been completed and first sales gas is expected in November.
CS Energy is funding upstream appraisal and development programs up to $A13.1 million for Kogan North, while the Australian Pipeline Trust is funding the construction of the downstream central gas processing facility, which it will own and operate post commissioning.
Arrow is paying about 10% of costs for a 50% working interest. The initial production forecast is 4PJ per annum over 15 years.
Arrow has also made recent discoveries at Silverdale and Peak Crossing, and is planning pilot projects at Dundee, Mt Lindesay and Silverdale.
The company’s focus for the rest of the year will be on achieving financial close on the Daandine and Tipton projects, first gas sales from Kogan and the certification of additional reserves, Davies said.
The Daandine Power Generation project involves a 27.4 MW power plant near the Daandine field. Key terms of a long-term power purchase agreement with Country Energy have been agreed upon and a connection agreement with Ergon Energy is in progress, according to Davies.
