Hey LIS. Its because of the new Santos offer to QGC shareholders. They are offering an overall value of 1.80 per share for QGS shares. You would of read from the fat prophets write up they are extremely keen on Arrow Energy. For others to see extracts from the write up below.
"With regard to a broad earnings outlook, we anticipate Earnings per Share (EPS) of 2.5 cents in 2007, increasing to 4.5 cents in 2008. We regard these as conservative estimates, as they do not account for other significant production opportunities that could materialize in what is a very rapidly changing landscape.
Corporate activity in the resources sector is increasing and the CSG sector is no exception. Santos recently announced a hostile $606 million takeover bid for Queensland Gas. A close inspection of the bid shows that Santos is paying A$1.38/GJ of 2P reserves, based on QGC's current 2P reserves of 423 PJ.
By comparison, Arrow's own 2P reserves are 498 PJ, yet Arrow's market value is just $450 million. We believe that valuations based on 2P reserves alone are not an appropriate way of valuing CSG companies, as they do not accurately reflect the potential upside from commercialization of overall 3P reserves, but the exercise does provide an interesting comparison and highlights Arrow's fundamental value. Furthermore, Arrow beats QGC in terms of 2P & 3P reserves, current and forecast production, contracted gas sales, producing and developing projects, as well as boating tremendous partners in GAIL and Tata. "
Now you have to take into account they have aquired a 50% ownership in Global CBM pty ltd which will now be renamed to Arrow Global CBM pty ltd.
"Global is in the advanced stages of business development for the
acquisition of coal bed methane (CBM) assets in Indonesia, China, Vietnam
and India."
The other assets the have exposure to in Indonesia are
"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."
So what valuation can we put on Arrow? Another winner with this one LIS. Still a long long way to go.