AOE - Arrow Energy

[chris1983]

I thought the CBM blocks that were won in India would drive the price up. They were bound to go up eventually..they continued to release message after message which was always positive..

Combine those positive messages with the added interest from investors into the coal seam gas market..plus the QGC takeover offer..then..Bam! up goes the SP. They should keep going too. I'll be holding these long term. Emerging company.

 

[markrmau]

I'll be holding these long term. Emerging company.

I agree totally. I stuck some in the super fund as well.

I think it would be terrible if someone makes a bid for AOE - you would be looking at $1.20 max(?) If india is successful, this could go much higher in the long term (though the market did not agree).

 

[chris1983]

I agree totally. I stuck some in the super fund as well.

I think it would be terrible if someone makes a bid for AOE - you would be looking at $1.20 max(?) If india is successful, this could go much higher in the long term (though the market did not agree).

Your right Mark. I hope no bids come through. Newhope may come in with a bid. Even if they bid I dont think they would get it. May just drive the price up for us and show the companies true value.

 

[laurie]

Your right Mark. I hope no bids come through. Newhope may come in with a bid. Even if they bid I dont think they would get it. May just drive the price up for us and show the companies true value.

I think AOE would welcome NHC T/O! they have {WD H. Souls Patersons} a hands off approach to investments they are involved in like New Hope Corporation just by getting approx 64% of the company

cheers laurie

 

[chris1983]

Keeps rolling.

Good long term play. I'm looking forward to a message on their expansion into India.

 

[chris1983]

Just some comparisons between the two. Posted this on another forum site and though it may of be interest to others. Any comments? AOE should crack a dollar if they continue to catch up to QGC. Also a good message released today with Arrow adding another 13% to its Reserves Base in Annual Bowen Basin Reserve.

Queensland Gas (Market Cap 710 Million with 478 million shares on issue)

To date, QGC's appraisal efforts have been directed towards proving gas reserves at its Berwyndale South and Argyle gas fields. QGC's share of Proved and Probable (2P) gas reserves amounts to 422 PJ (410 bcf), with 2,464 PJ (2.4 Trillion cubic feet) of 3P reserves.

Arrow Energy (460 million shares on issue plus 90 million options exercisable at 75 cents)

Fully diluted market cap is around 490 million. That’s with the oppies converted. The 75 cents oppies will bring arrow a nice bit of cash in the bank.

Reserve certifiers Netherland, Sewell and Associates Inc. (NSAI) of Dallas, Texas have confirmed a large reserves base at the Tipton West field with the certification resulting in 1P, 2P and 3P reserves of 25 PJ, 124 PJ and 2104 PJ respectively, making it potentially one of Australia’s largest onshore gas fields.
With subsequent reserves certification of 83 PJ Probable and 157 PJ Possible, the Kogan North project is now in full development mode following final approval by farmin partner, CS Energy Limited (Queensland’s largest electricity generator).The 83 PJ of certified Probable reserves is more than sufficient to meet the requirements of the CS Energy contract, which is for 4 PJ pa for 15 years.

NOTE: Arrow have their Indian project looking good with Gas price at a premium. Arrow could easily double. Way undervalued when you do the comparisons. Don’t forget their additional projects of converting Gas to Liquids with Alcan and their Gas power station project with Transfield.

 

[chris1983]

Arrow just hit 99. The magical dollar mark looks like it could be broken today. Its still a buy at these prices. One to watch when you do value comparisons with QGC.

 

[chris1983]

I wonder why the first part of this message hasnt been released by Arrow.

"Arrow Energy <AOE.AX> jumped 3.2 percent to A$0.965 after it said that it and Indian gas transporter GAIL (India) Ltd. <GAIL.BO> are together looking to invest in coalbed methane (CBM) projects in China and Indonesia.

Dealers said that continued speculation that the firm will receive a takeover talk also lifted its share price. "

They havnt released any message lately about moving into China and Indonesia am I right? This info was taken off the news section of Sanford securities.

(c) Reuters Limited 2006
REUTER NEWS SERVICE

 

[chris1983]

Found the information. Its from the Open briefing released on the 13th Oct.

"Overseas we continue to pursue attractive business development opportunities in China and Indonesia, which we believe may hold similar upsides to the company as India. And in the latter country, we will be preparing our exploration and appraisal program for what could be very large piece of business for us and will transform us into one of the key international CSG players."

This company wont be only limited to Australia. Allready expanding into India with good CBM blocks. The next countries will be China and Indonesia.

 

[vicb]

Thanks for the info Chris.

 

[chris1983]

Have you guys read the comments made by Nick Davies. This is a must read. Arrow is still considerably undervalued.

"Arrow’s own 2P reserves are 440 PJ. However, in general, I am not a great
supporter of the “2P Valuation Methodology” for CSG companies. It is more
suitable for conventional gas companies - because of the considerably greater
exploration risk and costs for conventional gas, and for CSG companies it does not reflect the massive upside reserves potential that exists within a company like Arrow. To some extent Santos’s bid has recognised this upside potential in QGC’s acreage, and given that Arrow has an order of magnitude more acreage under tenement than QGC across 5 basins compared with 1 basin, this bodes well for us.

Overall, I am very positive over what Santos’ bid could mean for Arrow’s share
price going forward. On any of the typically used valuation metrics, Arrow
numbers exceed QGC’s and that includes: 2P reserves; 3P reserves; current
production; 2007 forecast production; all subsequent years forecast production;contracted gas sales; number of producing projects; number of appraisal projects and area of tenements. Add to this the upside of India, the potential GAIL farmin and the GTL project and we expect a dynamic situation over the next few months."

 

[chris1983]

News found on other forum sites. Thought its important for Arrow holders who are members of this forum to know.

"Gail will be investing about Rs 500 crore for 50 per cent stake in four CBM "areas" currently owned by Arrow Energy in Australia, which are at various stages of exploration and production."

500 crore is an equivelent of around 140 million. I think its around that value.. See article. Link below

http://www.gailonline.com/news/gail1.htm?newsnum=35

 

[chris1983]

Creeping back to its high of 1.08. Should be interesting to see if it will hold above a dollar once the options come onto the market.

 

[chris1983]

Holding extremely well. The oppies expire on the 1st December. They havn't pulled back far at all from their high of 1.08.

The presentation released on the 24th of November is a good read.
The achievements for 2006 are as follows

•Successful merger with CH4
•46% increase in share price
•Over 100 wells drilled
•Over $160m funding raised
•Three new producing projects
•Three Indian blocks awarded with net resources up to 500 MMBOE (approx 10 TCF gas gross)
•Joint GTL concept study agreed with Alcan
•Plans in place to target $100m annual EBITDA by FY 2010
•Significant reserves upgrades achieved

The Indian blocks they won during the bidding process look great...10 TCF is a lot of gas and they have a 35% share in two of the blocks and 40% share in the other. Arrow is the leading CSG tenement holder in Australia and have the largest onshore Gas field in Australia. They have more than 90,000 sq km of land and have access to all major Queensland markets as stated in their presentation. They will have more than enough money to fund ongoing projects with all options being underwritten by Wilson HTM Corporate Finance. Its going to be a good future for Arrow IMO.

 

[vicb]

They are a busy little lot.
They are holding their price alot better then I would of thought. It will be interesting to see how the price holds after the options convert.
I will be holding on with a long view. Managed to buy up extra options a 4.4c. So they are treating me kindly.

 

[chris1983]

The date to exercise the options is over..They are off and racing. 1.09. Has broken through resistance of about 1.05 and has also broken previous highs of 1.08

 

[chris1983]

Arrow are expanding rapidly. With money coming in soon from their options..they look to be a great company. They should soon take over QGC's market cap. Comparison wise they have a lot more projects on the cards.

4 December 2006

Arrow Takes Strategic Option to Farm-In to Indonesian Coal Bed Methane
Projects

Arrow Energy has reached an agreement with Sugico Graha, PT (Sugico), which provides Arrow with an option to farm-in to twelve of Sugico’s tenements in South Sumatra, Indonesia to earn up to a 65% interest in each.
Sugico’s projects consist of twelve coal KPs (Kuasa Pertambangan = Mining Authorisation) in the South Sumatra Basin covering approximately 140,000 hectares. Sugico’s KPs are close to existing gas pipeline infrastructure and growing energy markets. The Government of Indonesia is currently preparing regulations to govern the exploration and development of Coal Bed Methane (CBM) in Indonesia with the regulations expected to be released in the 1st quarter of 2007. These regulations are expected to give first right of refusal for CBM tenements to the existing and overlapping tenement holders for Coal and Petroleum.

The Farm-in Agreement Option with Sugico provides Arrow with the opportunity to farm-in to earn 65% interest in all of the twelve KPs. Sugico is a privately held Indonesian company with diversified interests in Mining (Coal, Mineral Sands, Gold, Lime Stones and Iron Ores), Oil & Gas exploration and production, Equipment Supply and Plant Maintenance Services, Coal Mine Mouth Power Generation and Crude Palm Oil.

The government of Indonesia is moving quickly to settle the regulations and terms for CBM production, as the demand for clean energy in Indonesia is enormous. A study in a Society of Petroleum Engineers’ paper (Scott H Stevens, Hadiyanto: - Indonesia Coalbed Methane Indicators and Basin Evaluation - Paper SPE 88630) has estimated that the potential Coal Seam Gas resource in South Sumatra alone is 183 TCF.

Pipeline infrastructure connecting South Sumatra and the heavily populated island of Java is currently under construction. This farm-in option represents a strategic first mover advantage for Arrow in Indonesia and follows Arrow’s recent strategy document outlining a plan to follow up the successful award of exploration blocks in India with a selection procedure for prospective blocks and local partners in Indonesia and China

 

[vicb]

Thats great news
Good to see some positive news and support at the moment. Should be good for the options to hit the market.

 

[chops_a_must]

Have been watching this one for a while as I am a holder in QGC.

Seriously considered getting on it while it was about .70. Should have in retrospect.

But it is good to see two really well run companies taking on the big boys and beating them at their own game.

 

[laurie]

97% acceptance on options by shareholders says a lot about a company when you get that level of support [2.9m to underwriter]

cheers laurie