AOE - Arrow Energy

[SGB]

Trading halt today.

Has any got any news or speculation on what is happening to Arrow.
Can some fundies fill us in

SGB

 

[trueblue]

Col

I think QGC are in the best position locally in southeast qld. For the follwoing reasons:
- They are conveniently associated with two of the biggest electricity generators. ORG & AGK
- They also have the lowest cost base on CSG producers through the highest flow rates and hence lesat wells per unit of gas production.

AOE/PES
The upside for AOE lies internationally. I think talk of an LNG exports from Mackay? is very positive for AOE and PES. At 55PJ per annum (i have no idea of Capex and operating costs for an LNG train however I think margins are extremely high) at a price of $3m per PJ this gives revenue in the order of $150m. There is however talk of potentially doubling this to 110PJ year, doubling revenue. This adds up to potentially 150PJ a year of gas sales including domestic sales with prices unlikely to go lower equates to around 450-500m revenue.

PES with gas fields in Tassie and the Basslink electricity line going in is also a positive. Potential gas sales to the mainland as well.

CSG on the whole.
- Low cost low life fields.
- Carbon benefits of gas???
- Potential price rises???
- Huge reserves.

I would appreciate any commentary on this. I am just an average investor, far from an expert.
Holding QGC, PES

The LNG Project was announced as Gladstone not Mackay. Big things happening in Gladstone and AOE hold fields within an hour's drive. Whether or not that helps - I do not know??? Since I have held shares from the .60cents days and sold enough to make my present holdings free! I am not too concerned!

 

[vicb]

Record date for the new shares tomorrow 1/07/07 at 7pm.
Good news today, but I think the closing date coming up may be a factor in the price.

 

[Sainter]

1/7/07 is RECORD date, not 'SPP EX' date which was 27/7/07 ( if I can count to 3), so the opportunity to buy to gain access to the SPP has already passed.
Cheers!

 

[vicb]

Thanks for picking that up Sainter mate.
My misunderstanding and mistake.
All the best...

 

[chops_a_must]

Considering the main supporter of this stock is now banned, I guess I better step up to the plate. It's just unfortunate this thread has been torn to shreds, especially considering it has got to be one of the best performing stocks on the ASX200 over the last 6 months.

Is anyone not intending to take part in the SPP? Looks like a no brainer, with the SP holding up after the record date. The insto placement was about 10x oversubscribed, so it gives you a lot of confidence. I'm free carrying a whole bundle, but would be looking at re-entering on this breakout if the SPP wasn't happening.

Along with many others in the energy sector, the technicals look very good. Has respected and established a longer term and more realistic trend line. With ORG one of the CBM heavy-weights reporting well in this sector, it only has to put upward pressure on some of these mid cap CBM players.

As with a lot of the energy stocks, this has done very well in this "correction" and post record date. Key signs for a heavily sought after stock. The fibs point to a SP of between $4.50 - $5.50. Would be hoping for that level over the next 6 months.

Cheers,
Chops.

 

[chops_a_must]

More great news today to add to the PetroChina deal yesterday. See todays announcement below. Arrow are taking control of China and its CBM assets..more deals to be signed im sure. Showing fantastic strength as the market tanks. Once Again!

Arrow Signs Agreements With Two Leading Shaanxi Province Coal Miners

The Directors of Arrow Energy N.L. (“Arrow”) are pleased to announce the signing of two agreements with leading coal miners in the extensive Binchang Coalfield of Shaanxi Province in North-Central China. These two agreements are the culmination of many months of geological review work and discussions with the mining groups and government organizations.
The first of these agreements is a Heads of Agreement (“HOA”) with Bin County Coal (“Bin County”). The HOA is for Arrow to provide a degassing service ahead of mining operations in a similar business model to Arrow’s current Moranbah North Mine Degassing Project in Queensland, Australia in conjunction with the mine owner, Anglo Coal. The Bin County mining lease covers an area of approximately 100 km² of Jurassic age coal with apparent good permeability and mid level gas saturations. Arrow will now continue its technical studies and draw up plans for a pilot production program followed by the field’s development if the pilot is successful.

The second of the agreements is a Memorandum of Understanding (“MOU”) with Shaanxi Binchang Mining Company Limited (“SBMCL”) to initially evaluate the potential for Coal Bed Methane (“CBM”) developments on their mining tenements and following a successful evaluation to form a Joint Venture arrangement with SBMCL. These areas, totaling approximately 700 km², are adjacent to the fields covered by the Bin County HOA and host coals with similar features.

Based upon geological data reviewed, Arrow estimates Gas in Place in these two areas could be up to 4 TCF.
In its review of China’s coal basins, Arrow is seeking to leverage its existing skills and knowledge base by specifically targeting coal basins geologically similar to the Surat and Bowen Basins which host Arrow’s Australian gas fields. The Company believes the Bin County and Binchang coal mines exhibit these similarities. With these two agreements Arrow will have access to most of the Binchang Coalfield. The nearby cities of Xi’an and Xianyang have combined populations of over 5 million people and both cities have established city gas businesses.

Speaking from the city of Xi’an, capital of Shaanxi province, Arrow Chief Executive Officer Nick Davies said “The signing of these Agreements today, together with yesterday’s signing of an agreement with PetroChina and Arrow’s earlier agreement with Orion Energy represents a further foundation stone in the execution of our China project acquisition strategy of targeting coal basins of China where characteristics are similar to those in our Australian operations. We are also delighted to be supporting the Chinese authorities as they launch initiatives to increase mine safety through mine degassing projects and to reduce fugitive gas emissions while at the same time rapidly creating a Chinese CBM industry”.

 

[chops_a_must]

Another fantastic announcement today. Not that it matters... I wonder what this thing would be doing on an up day in the market.

Arrow Signs Two Agreements in North East China;
Near Term Revenue Potential

The Directors of Arrow Energy N.L. (“Arrow”) are pleased to announce the signing of two significant agreements in Liaoning Province in north-east China
The first of these agreements is a Heads of Agreement (“HOA”) with Shenyang Gas Company, the city gas company supplying gas to the Greater Shenyang area. Shenyang Gas Company has a substantial gas reticulation system in place serving both residential and industrial customers and is currently purchasing LNG to meet strong energy demand growth in the Greater Shenyang area which has a population of over 24 million.
Shenyang Gas has rights to gas from nearby coal acreage owned by Fushun Mining. The Fushun coals are up to 70 metres thick, mid rank, Tertiary age coals with high gas contents. Following completion of technical studies and final agreements, Arrow will drill and complete wells in this field on behalf of Shenyang Gas and receive revenue based on gas produced to surface at global gas market prices.
It is anticipated that Arrow will drill its first well (likely a surface to inseam well) within the next few months. If successful, gas can be sold immediately into Shenyang’s gas grid and it is anticipated that a further 4 vertical and 14 horizontal wells would then follow over the next 12 months.
The second of the agreements is a HOA with Liaohe Petroleum Development Company (“LPDC”) to evaluate nine blocks in Liaoning Province, covering an area of approximately 9,000 km² of high potential thick coal ranging from high volatile bituminous to semi anthracite. Arrow will undertake an initial technical evaluation of the project area and following a successful evaluation Arrow will finalise a Production Sharing Contract (PSC) with LPDC to develop some or all of these blocks.
LPDC is a subsidiary of China National Petroleum Corporation (“CNPC”) and operates over 10,000 producing oil wells in Liaoning province, and has over 10,000 employees.
These two agreements mark the final stage of Arrow’s initial project acquisition strategy in China. Arrow now has a total of 7 projects in 3 different geographic regions to evaluate technically and commercially and to then proceed with exploration and development drilling. The projects constitute a varied portfolio of opportunities for the country with some coal mine degassing, some large open CBM exploration acreage, some appraisal acreage and a potential near term revenue project in Shenyang.
Speaking from Shenyang, Arrow’s CEO Nick Davies said “The agreements signed this week mark a significant milestone in the development of Arrow’s global growth strategy. 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.â

 

[nioka]

Another fantastic announcement today. Not that it matters... I wonder what this thing would be doing on an up day in the market. ]

Friday was the ex date for the right to apply for up to $5000 of shares at $2.35. There will be some selling to get funds to invest back to that ammount although you are not guaranteed the full amount to the $5000. It would buy 2127 shares, valued today at $2.88 which will show a $1000 plus profit.( only if you get the full allocation )

 

[chops_a_must]

Friday was the ex date for the right to apply for up to $5000 of shares at $2.35. There will be some selling to get funds to invest back to that ammount although you are not guaranteed the full amount to the $5000. It would buy 2127 shares, valued today at $2.88 which will show a $1000 plus profit.( only if you get the full allocation )

No, last friday was only the record date, not the ex-date. That date and selling from that has been and gone.

 

[nioka]

No, last friday was only the record date, not the ex-date. That date and selling from that has been and gone.

What I said was it was an ex date for THE RIGHT to apply. Which is the record date. If you sell now you are still entitled to apply for the new issue as a holder recorded on the record date. Offers to subscribe should be posted out today I believe.

 

[nioka]

AOE up nicely today which means sell at $2.93 and take up new issue at $2.35 for 2127 shares ( maximum allowed) will allow a profit of almost $1200.

 

[SGB]

AOE up nicely today which means sell at $2.93 and take up new issue at $2.35 for 2127 shares ( maximum allowed) will allow a profit of almost $1200.

Nice to see this one cross the $3.00 mark again. Technically looking healthy again and looking forward to bigger improvements.

 

[sus]

I am not sure what is the second bullet point mean from the SPP announcement, under "Quote from SPP announcement page "TERMS & CONDITIONS OF SHARE PURCHASE PLAN" page 5 SUBSCRIPTION PRICE:

Is that mean the SPP price will be set on 10 day from 5 Sep to 18 Sep 2007 VWAP at 4.9% discount?
or the share price is $2.35.?
Please help!!!Thanks

"Quote from SPP announcement page "TERMS & CONDITIONS OF SHARE PURCHASE PLAN" page 5
SUBSCRIPTION PRICE
The subscription price of the Plan shares will be the lower of:
· $2.35 per share; and
· the price being an amount equal to 95.1% of the Volume Weighted Average
Price for a period of 10 ASX trading days commencing on or about 5
September 2007 (VWAP) (that is, the price calculated at a 4.9% discount
to the VWAP).
Accordingly, the Subscription Price will represent a discount of at least 4.9% to the Volume Weighted Average Price for Arrow’s Shares for a period of 10 ASX trading days commencing on or about 5 September 2007.

 

[Yeti]

AOE up nicely today which means sell at $2.93 and take up new issue at $2.35 for 2127 shares ( maximum allowed) will allow a profit of almost $1200.

Was thinking of doing this myself as I already hold a large proportion of AOE in my portfolio, so not sure if I want another $5000-worth. But by the time you allow for CGT and brokerage fees, I'm not sure it will be worth wile. Also, there is no guarantee that you will get $5000-worth of shares in the SPP. If it is over-subscribed, which is highly likely, it will be scaled back.

 

[Yeti]

I am not sure what is the second bullet point mean from the SPP announcement, under "Quote from SPP announcement page "TERMS & CONDITIONS OF SHARE PURCHASE PLAN" page 5 SUBSCRIPTION PRICE:

Is that mean the SPP price will be set on 10 day from 5 Sep to 18 Sep 2007 VWAP at 4.9% discount?
or the share price is $2.35.?
Please help!!!Thanks

It means either one, or the other, whichever is the lowest.

The announcement is poorly worded and might make more sense as follows IMO (changes in red):

The subscription price of the Plan shares will be the lower of either:
· $2.35 per share;
or
· an amount equal to 95.1% of the Volume Weighted Average Price (VWAP) for a period of 10 ASX trading days commencing on or about 5 September 2007 (that is, a 4.9% discount to the VWAP).

 

[nioka]

I am not sure what is the second bullet point mean from the SPP announcement, under "Quote from SPP announcement page "TERMS & CONDITIONS OF SHARE PURCHASE PLAN" page 5 SUBSCRIPTION PRICE:

Is that mean the SPP price will be set on 10 day from 5 Sep to 18 Sep 2007 VWAP at 4.9% discount?
or the share price is $2.35.?
Please help!!!Thanks.

The price will be no more than $2.35 and could be less if the SP falls to a point where after applying a discount of 4.9% to the weighted average price for the 10 days prior to the close of the SPP a price less than $2.35 is established. This does not seem likely.

 

[Sean K]

For techies out there, am I seeing a head and shoulders happening or is it a little tenuous? O&G would generally have to fall over for this to eventuate surely, and that doesn't look like happening atm? Maybe one of those set ups that don't eventuate. I hope not, as I have a few O&G ers. Will be interesting to watch anyway. Thoughts?

Well, the H&S practically played out and would have been a good time to be set to top up holdings. Something for long punters to keep in mind.

This has been a champion stock during the recent downturn. Only this overnight crash probably halting the momentum, if at all...

 

[SGB]

Hi Guys

Not much action on thread of late but may have finally found support @ $2.40ish.
Also good to top at $2.50 to confirm double top. $2.60 next challenging resistance which may confirm trend change.

any thoughts?

SGB

 

[laurie]

I'm smelling an takeover by NHC but that's JMHO they only need 80%

cheers laurie