Further analysis of data from the well located in the Ipswich / Clarence Moreton Basin has shown that the gas pressure was considerably over-pressured for the depth encountered (estimated at 1150 psi, some 300 psi above a normal pressure gradient).

As announced last week, the gas was encountered at 581 metres while continuously coring for coal seam gas. After further operational and safety assessments it has been deemed unsafe to attempt to test this zone with the small core rig currently on-site and this well will be plugged and abandoned.

A new well will be planned to delineate and test the discovery using an appropriate rig and equipment designed to handle high pressure gas zones.

After an evaluation of the data from this well and existing seismic an optimal location will be selected and drilled to intersect and test the size and gas flow capacity of this discovery.

Mt Lindesay-1 was also the first CBM core hole test in the Clarence-Moreton Basin in Queensland and preliminary results suggest that the area has comparable CBM potential to the Walloon coals of the Surat Basin in Queensland. The well has been drilled to 580 metres and encountered 28 metres of net coal.

Arrow plans to drill additional CBM appraisal core wells in the permit and in adjacent ATP 643P (Arrow 100%).

Arrow has 100% equity in the Mt Lindesay gas discovery and surrounding permits. Mt Lindesay -1 is located in ATP644P 50 kilometres south of Brisbane, near the town of Beaudesert.