In its March quarterly activities report released on Thursday, Arrow said its total domestic electricity sales increased by 81% and Surat Basin gas production rose by 14% in the quarter. Meanwhile, reserves certification is continuing for the Gladstone LNG project, and pre-feasibility work has started on the Moranbah-to-Gladstone gas pipeline.
Arrow said initial development of the Taroom coal seam in the Surat Basin continued to exceed expectations, with excellent flow rates developing in Tipton with an average peak flow rate achieved for the nine wells of 525,000 cubic feet per day.
The Tipton West field was currently producing 21 million cubic feet per day, with net gas sales for the quarter of 1.1 petajoules, according to Arrow. The field continued to be dewatered and production increased by 17%, with sales increasing by 16%.
The company said the Taroom Pilots in Tipton had already delivered commercial gas production and an additional 70PJ of certified reserves. On-going development of the Taroom in Tipton West could be done with significantly reduced investment through sharing infrastructure with existing, co-located Juandah seams wells, according to Arrow.
Field production and gas sales to Braemar power station via the Tipton West central gas processing facilities continued to improve.
The Kogan North Field was currently producing 9.38MMcfd, with net gas sales of 0.37PJ. Four maintenance wells in the northern end of the field had been prepared for production and were expected to further increase sales during the next quarter.
The Daandine field was currently producing 10.6MMcfd, with net gas production of 0.64PJ and net gas sales of 0.20PJ, as well as net electricity sales of 53,622MWh from the Daandine Power Station. Four maintenance wells had been drilled and were dewatering, which would further increase gas production.
Four Taroom pilot wells had been drilled and were dewatering, with the first pilot well producing gas and others expected to soon start production.
But Arrow said that Bowen Basin production had slipped slightly due to extreme weather, which resulted in several Moranbah gas project wells being off-line for most of the quarter. Activity was now returning to normal in most areas.
The North Queensland Energy joint venture with AGL Energy had substantially achieved all pre-acquisition expectations, with net gas sales during the quarter of 0.76 PJ and net electricity sales of 162,732MWh from the Townsville power station.
Arrow said reserve certification work was ongoing over several project areas in the Bowen and Surat basins and that it had retained its gas reserve certification targets of about 2Tcf of 2P reserves by the end of 2008, and an interim figure of about 1.5Tcf by the end of the financial year.
The company also said full commercial operation of the 450MW Braemar 2 Power Station and associated high-pressure gas pipeline, in association with ERM Power, was scheduled to meet peak winter 2009 demands. Arrow is supplying 11.5PJ of gas a year over a 12-year period to Braemar 2.
Arrow is also about to start its first overseas drilling program in India and has won a Vietnamese production sharing contract, as well as signing joint venture agreements with China's Xinjiang autonomous regional government.
Arrow said it and its Indian joint venture partners were scheduled to start drilling in two exploration licences early this month. Each block would have a 13-well program of core and production wells. The drilling program is forecast to take about a year to complete.
In Vietnam, Arrow and partners PetroVietnam and the Vietnamese Government plan to start field activities in the second half of the year over 2743 square kilometres of prospective acreage near Hanoi.
And in China, Arrow's joint venture with Chinese company UCG ( 80% Arrow, 20% UGC Sino-Foreign) was identifying opportunities where CSM could be commercially exploited prior to coal mining in China.
