The $A140 million merger proposal, which would create Australia’s largest independent coal seam methane company, has seen Arrow offer 2.15 of its shares for each CH4 share, in addition to two Arrow options for every five CH4 shares.
Arrow chief executive Nick Davies told EnergyReview.net that he was confident the merger would go ahead, despite media reports suggesting that several large institutional investors in CH4 were reluctant to back the move.
“I’m sure that’s not the case - I’ve been talking to the investors in question and that’s not the feeling I got [from them],” he said.
“We’re confident of a positive result, but there’s still the concern that someone else could come in with a larger bid. Although we now have some protection to stop that happening after we bought up 20% of [CH4’s] shares.”
The merger would combine Arrow's coal seam gas projects in southeast Queensland, including its Kogan North project, with CH4's gas projects in the Bowen Basin in northern Queensland, including its Moranbah Gas Project.
It would also have two development projects, Tipton West and Daandine, along with another 15 potential projects within a tenement area of 90,000 square kilometres.
The company will also have 1P reserves of 84 petajoules; 2P reserves of 363 petajoules and 3P reserves of 2631 petajoules, with gas sales agreements in place for around 368 petajoules.
The board of the merged entity would comprise John Reynolds as chairman, Nick Davies as chief executive officer, two Arrow nominated directors Stephen Bizzell and Dr Paul Elkington and two CH4 nominated directors Jeremy Barlow and Robert Backwell.
