Arrow now has seven projects in three different Chinese regions, which will be technically and commercially evaluated before going ahead with exploration and development drilling.

This morning the company announced it had signed two “significant” agreements in Liaoning Province in northeast China.

“The agreements signed this week mark a significant milestone in the development of Arrow’s global growth strategy,” Arrow’s chief executive Nick Davies said.

“China has the potential to provide a major component of Arrow’s future growth and we look forward to continuing to grow the outstanding relationships we have developed across China, and progressing project developments.”

The first deal is an agreement with Shenyang Gas Company, which supplies gas to the Greater Shenyang area and its population of more than 24 million.

Arrow has agreed to complete technical studies and drilling operations on nearby coal acreage.

It expects to drill the first well – most likely a surface to inseam well –in the next few months.

If successful, gas can be sold into Shenyang’s gas grid and a further four vertical and 14 horizontal wells would follow over the next 12 months.

The second agreement is with Liaohe Petroleum Development Company, to evaluate nine blocks in Liaoning Province, covering about 9000 square kilometres of high potential thick coal.

Arrow will evaluate the project area and, depending on the results, will finalise a production sharing contract to develop some or all of these blocks.

LPDC is a subsidiary of China National Petroleum Corporation and operates over 10,000 producing oil wells in Liaoning province.