Given the encouraging results to date and the fact that the Kogan North-1 well is located 4 kilometres from the Roma to Brisbane pipeline, Arrow said they were considering the Kogan North area as a potential location for a CBM pilot project late in 2002.

The other area Arrow said was being considered for a pilot project late in 2002 was on the Dundee field in PLA 185 where recent flow tests indicated very high permeability, together with immediate gas flows.

After a final flow test at Kogan North-1, Arrow's activities will move to Tipton West-1, the first of four wells in ATP 683P where the revitalised Anzoil is funding drilling activities as part of a farm-in deal.

Anzoil has the option to earn a 20% interest in approximately one quarter of the area of ATP 683P by paying an additional $1 million towards the costs of a CSM production pilot project in the permit.

Anzoil also took a placement of 2.3 million shares in Arrow at $0.18 per share and 866,666 20 cent options expiring June 28 2002.