AOE - Arrow Energy

[Dukey]

Arrow update - no idea about any t/o, but Arrow really hitting its straps now...
New daily gas sales average of 75Tj/day - up a mere 30% since June Qtr. Arrow now supplying about 22% of gas Qld gas market.
And - continuing negotiations with asian partners.

Looking good for all holders methinks after the August downturn...

 

[SGB]

At this stage AOE is struggling to find any sort of trend . Currently trading in this very choppy enviroment between 2.40 - 2.60.
Watching volumns with interest.
SGB

 

[Dukey]

quiet lately here - just creeping up along with QGC since August but announcement today could be positive :
AOE and AGL (50/50) to aquire 'Enertrade' ('gas and pipeline' business) from Qld government.
Seems to be a sensible - 'synergistic' aquisition and the market likes it so far....

nice one - hope you still have AOE chops..???

 

[chops_a_must]

quiet lately here - just creeping up along with QGC since August but announcement today could be positive :
AOE and AGL (50/50) to aquire 'Enertrade' ('gas and pipeline' business) from Qld government.
Seems to be a sensible - 'synergistic' aquisition and the market likes it so far....

nice one - hope you still have AOE chops..???

Yep, they are once again my largest holding, with the free carried part being about my 3rd biggest holding alone. Lol!

A lot of these other CSM plays look to be setting up nicely as well...

 

[jman2007]

Looking good for Arrow holders,

After stumbling a little bit in the 2.50 range for a few months, AOE look to be cementing their place in the Qland gas market as one of the major technical partners of choice, QGC also having a good run...these two companies track each other remarkably well. The intense interest from institutional investors over the last 120M share placement further makes me believe these guys have some pretty solid fundamentals....

Cheers
jman2007

 

[chops_a_must]

I'm not exactly sure how they keep doing it, but they do. Getting Nick Davies on the board to me says they are really serious here. Potential takeover target in LNG down the road from AOE if all goes well I'd reckon. AOE look to have gotten a blocking stake as well. All looks good to me though.

ASX Announcement
11 December 2007
Arrow takes strategic stake in Liquefied Natural Gas
Ltd - broadens regional commercialisation options
The Directors of Arrow Energy Ltd (Arrow) are pleased to announce Arrow has subscribed for approximately
10% of the ordinary shares of Liquefied Natural Gas Ltd (LNGL) (ASX: LNG) and agreed a comprehensive
strategic alignment of the two companies.
Under the terms of the arrangement between the two companies Arrow:
• has agreed to subscribe for 14 million shares of LNGL at 65 cents per share for a total cost of $9.1m with
a right to participate in future equity issues on a “no dilute” basis
• has reached agreement with LNGL which gives Arrow the option to bring in LNGL to design fit for
purpose LNG facilities for any coal seam gas (CSG) accumulations in Australia or Asia which Arrow
deems appropriate for LNG development. Arrow will then have an option to take a 50% interest in any
LNG plants subsequently developed.
• has an option to take a 20% interest in the proposed Gladstone LNG terminal at “ground floor” (ie at
cost) terms (compared with the previous “promote” terms)
• will join LNGL in the marketing of LNG from the Gladstone LNG plant
• will be given expanded and full aggregation rights for any gas supply to the Gladstone LNG plant
• will have the right to appoint a director to the Board of LNGL. Arrow intend to nominate Arrow MD &
CEO, Nick Davies to fill this position. Nick has extensive experience in the international LNG arena,
particularly in his role prior to joining Arrow as President of BP’s Asian Gas & Power business.
This investment will allow Arrow to pursue a broader range of resource opportunities across Asia without
being constrained solely to local markets and to develop a specific “CSG to LNG” strategy to compliment the
current international portfolio.
The investment also closely follows Arrow’s broader strategy of maximising margins by selling higher value
product and through downstream investment where appropriate.
Commenting on the investment, Arrow CEO Nick Davies said:
“This investment represents an exceptional fit with Arrow’s high margin strategy. We believe that the
proposed Arrow/LNGL Gladstone LNG project will represent a major milestone in the global LNG business
by proving that smaller gas accumulations can be developed as LNG projects. This will bring previously
stranded gas accumulations into the realms of commercially viable LNG projects and could be particularly
enhancing for typical sized CSG accumulations and hencefor our future business”

 

[DionM]

AOE getting smashed over the last two days - down 7.6% yesterday, another 6% today, on no real bad news? Getting hit a lot harder than others in the market

 

[oldblue]

AOE getting smashed over the last two days - down 7.6% yesterday, another 6% today, on no real bad news? Getting hit a lot harder than others in the market

Can't see any reason for this.

Think its just the state of the market.

Goes on my watchlist for adding to a modest position.

 

[jman2007]

Can't see any reason for this.

Think its just the state of the market.

Goes on my watchlist for adding to a modest position.

Could have something to do with this lads...

Austock Securities have initiated coverage on AOE, with a lighten recommendation.

The broker said the comapny's international assests "had potential" but it pointed to delays in the company's ability to achieve reserve certification at it's Australian sites. "A further 200 development wells are planned for 2008. In our view, this strongly suggests flow rates per well are taking longer than anticipated to achieve expectations" Austock said.

"Given Arrow's timelines to achieving reserves domestically, we find it difficult to see how, when operating under perhaps more bureacratic legislation, AOE will be able to grow production at a much faster rate than in Australia".

The broker's valuation of the company's hard assets was $1.82, with a price target of $2.16.

Source: The West Aust business section, p 72 Jan 12th 2008.

jman

 

[joelc]

The only 2 reasons I could think is with the declining share price that people with margin loans have had margin calls and thus some unnecessary selling, oh and around a year ago the sp was hovering around the 1.20 mark (I was one of the traders selling my AOE holdings for a 20% profit around this period ) and possibly some long term holders could be selling off parcels now that they've got the 50% CGT discount..

What are everyone’s thoughts on the current P/E ratio, theage quotes it at 57.7 (to me this is based on last years total recognised income (total sales revenue) of 27million) and commsec says 75.83 (to me this roughly reflects last years 17.83million dollar profit after the write down of losses from CH4 etc), maybe with the current p/e ratio based off last years sales there's a little too much blue sky for some?

I've read through a whole heap of announcements but am unable to find a projected sales revenue for 2008, everything seems to focus only on 2008 projected certified net gas reserves, could someone point me in the direction?

 

[DionM]

Compared to other CSM prospects AOE seems to have been hit the hardest, yet AOE is best positioned I would say (and have diversity with pipelines too)? Look at MEL by comparison, or BPT.

 

[laurie]

yep totally agree Dion at times I wonder how the market works

cheers laurie

 

[DionM]

Absolutely flogged so far today.

Down 12.5% to $1.61 ...

I doubt it has anything to do with the name change ... I suspect it's being dumped big time by speculators who are getting out.

 

[chops_a_must]

Absolutely flogged so far today.

Down 12.5% to $1.61 ...

I doubt it has anything to do with the name change ... I suspect it's being dumped big time by speculators who are getting out.

Yep... targets now are 1.51 - should get there today. Thought that would be the very bottom.

1.08-1.24... and after that, 60c.

 

[SGB]

Absolutely flogged so far today.

Down 12.5% to $1.61 ...

I doubt it has anything to do with the name change ... I suspect it's being dumped big time by speculators who are getting out.

yer DionM, They can't short this one so its fear based. Will recover quickly though, IMO when tide turns again.
Ive been looking to re-enter in this one. Keeping eyes open for an entry point...but not just yet.

 

[chops_a_must]

yer DionM, They can't short this one so its fear based. Will recover quickly though, IMO when tide turns again.
Ive been looking to re-enter in this one. Keeping eyes open for an entry point...but not just yet.

Rubbish. I was short this one just last week.

And even if they couldn't, that would mean that the down plunge had nothing to do with shorters. Purely people long getting out. Mortal damage has been done to the long term technicals here.

 

[SGB]

Rubbish. I was short this one just last week.

And even if they couldn't, that would mean that the down plunge had nothing to do with shorters. Purely people long getting out. Mortal damage has been done to the long term technicals here.

Interesting Chops, who is your provider, I'd like to come along at this stage as well. My provider will only long AOE.

 

[SGB]

Rubbish.

And even if they couldn't, that would mean that the down plunge had nothing to do with shorters. Purely people long getting out.

DER...... What do you think Fear Based mean't in my previous post!!!!!!! Investors getting out maybe.

 

[chops_a_must]

DER...... What do you think Fear Based mean't in my previous post!!!!!!! Investors getting out maybe.

Sorry... have been trading the SPI as I've been writing this.

But it was ripe for shorts, the technicals became horrible.

IB is who I use.

 

[SGB]

Sorry... have been trading the SPI as I've been writing this.

But it was ripe for shorts, the technicals became horrible.

IB is who I use.

Totally agree chops, I noticed a tech breakdown at $3.00ish with a double top retracement. Just been waiting for an entry because I couldn't short this.

Cheers
SGB