December 16, 2011, 2:21 AM EST

By James Paton

Dec. 16 (Bloomberg) — Arrow Energy Ltd., the natural gas producer owned by Royal Dutch Shell Plc and PetroChina Co., won approval from Australia’s Foreign Investment Review Board to buy Bow Energy Ltd. for A$535 million ($534 million).

The transaction was also cleared by Chinese authorities, Brisbane-based Bow said today in a statement. The decisions follow approval earlier this month by the Australian Competition & Consumer Commission.

Arrow, seeking additional resources for a liquefied natural gas venture in Queensland state, agreed in September to increase its takeover offer to A$1.52 a share in cash from A$1.48. The accord was 72 percent more than Bow’s price of 88.5 cents in Sydney before Arrow made its initial offer Aug. 22.

Brisbane-based Bow was valued at between A$1.14 and A$1.53 a share by independent analyst Grant Samuel, the company said Nov. 17. Samuel found the deal “highly attractive,” given the uncertain economic and market conditions, the premium given to shareholders and the “remote prospect of Bow shares trading above A$1.52 per share in the foreseeable future,” Bow said.

Arrow, also based in Brisbane, plans the fourth LNG venture in Queensland to meet rising Asian demand, following approvals for more than $50 billion in developments led by BG Group Plc, Santos Ltd. and ConocoPhillips. The acquisition may allow Arrow to expand output at the venture’s first two units by as much as 15 percent, it said in September.

Bow expects the transaction to be completed Jan. 11, it said last month.

–Editor: Keith Gosman,

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net

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By James Paton

Sept. 26 (Bloomberg) — Arrow Energy Ltd., owned by Royal Dutch Shell Plc and PetroChina Co., agreed to buy Bow Energy Ltd. after sweetening its offer to A$535 million ($516 million), gaining resources for a natural gas project in Australia.

The coal-seam gas explorer and producer in Queensland state increased its cash offer to A$1.52 a share from A$1.48, Brisbane-based Bow said in a statement today. That’s 72 percent more than the stock’s price of 88.5 cents in Sydney trading before Arrow made its initial offer on Aug. 22.

Arrow plans the fourth liquefied natural gas venture in Queensland to meet rising Asian demand for the fuel, following approvals for more than $50 billion in developments led by BG Group Plc, Santos Ltd. and ConocoPhillips. The acquisition may allow Arrow to expand output at the venture’s first two units, or trains, by as much as 15 percent, the company said today.

“These big LNG project developers will need more gas” to underpin additional processing units, Ivor Ries, an analyst at E.L. & C. Baillieu Stockbroking Ltd., said by telephone today from Melbourne. “We’ll see more consolidation.”

Bow rose 0.3 percent to A$1.465 at 4:10 p.m. in Sydney. Bow has gained 66 percent since Aug. 19 on the Australian stock exchange, before Brisbane-based Arrow made its initial offer.

‘Good Deal’

The Arrow accord values Bow at about 16 cents a gigajoule of proven, probable and possible reserves, compared with an average of about 50 cents a gigajoule for Australian coal-seam gas transactions over the past two years, Andrew Williams, an analyst at RBC Capital Markets in Melbourne, said by phone.

“This is a very good deal for Arrow,” Williams said.

The Arrow LNG venture may cost more than $20 billion to develop, Deutsche Bank AG estimated in a Sept. 23 report. Bow had been the subject of takeover speculation since Santos, Australia’s third-largest oil and gas producer, agreed in July to pay about A$730 million to buy the shares in coal-seam gas explorer Eastern Star Gas Ltd. it didn’t already own.

“Our project is proceeding quite nicely on our existing reserves,” Andrew Faulkner, Arrow’s chief executive officer, said in a phone interview today. The transaction provides “the opportunity to take that project to the next level, to expand the train size and to strengthen our reserves base,” he said.

The Bow deal may allow Arrow to expand the size of each of the first two LNG processing units on Curtis Island to as much as 4.6 million metric tons of the fuel a year from the current plan of 4 million tons a year, Faulkner said. Arrow is on track to make a final investment decision in late 2013, he said.

‘Superior Bid’

Bow’s board recommends that shareholders vote in favor of the proposal in the absence of a “superior” bid, according to the statement. The accord is subject to regulatory approvals in Australia and China, and Bow shareholders are due to vote on the deal in December, the companies said in separate statements.

Bow said it is being advised by Bank of America Corp. and Wilson HTM Investment Group, while Arrow said it named JPMorgan Chase & Co. as a financial adviser.

The offer “absolutely reflects the underlying value of Bow’s assets and resources,” Arrow’s Faulkner said in the interview. “The price acknowledges the volatility and the technical and commercial uncertainties that are out there.”

The coal-seam gas industry on the east coast of Australia “must repair damage and rebuild the trust” of communities amid criticism from environmental groups who say the drilling of wells may contaminate water supplies, Elaine Prior, a Citigroup Inc. analyst in Sydney, said in a Sept. 21 report.

–Editors: Keith Gosman, Amit Prakash

To contact the reporter on this story: James Paton in Sydney jpaton4@bloomberg.net.

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.

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By James Paton – Aug 22, 2011 8:09 AM GMT+0100

Arrow Energy Ltd., owned by Royal Dutch Shell Plc (RDSA) and PetroChina Co., offered about A$520 million ($540 million) for Bow Energy Ltd. (BOW), seeking more resources to underpin a proposed liquefied natural gas project in Australia.

Arrow, a coal-seam gas explorer and producer in Queensland state, offered A$1.48 a share in cash, Brisbane-based Bow said today in a statement. That’s 67 percent more than Bow’s price of 88.5 cents in Sydney trading on Aug. 19. The shares surged 60 percent today to A$1.415 at the 4:10 p.m. close.

The bid “does significantly undervalue the stock compared with where we think it should be,” said Andrew Williams, a Melbourne-based oil and gas analyst at RBC Capital Markets, who has a price target of A$1.75 on Bow’s shares. “It still leaves scope for upside and more play to come.”

Arrow plans a fourth LNG venture on Queensland’s Curtis Island, following approvals for more than $50 billion in rival developments led by BG Group Plc (BG/), Santos Ltd. (STO) and ConocoPhillips (COP) to meet rising demand in Asia. Bow has been the subject of takeover speculation since Santos, Australia’s third-largest oil and gas producer, agreed last month to pay about A$730 million to buy the shares in Eastern Star Gas Ltd. (ESG) it didn’t already own.

Bow has been in talks to supply gas to the companies developing the LNG projects in Queensland as it targets a more than fivefold gain in reserves by next year, Chief Executive Officer John De Stefani said in an Aug. 3 interview. Bow increased its proven and probable reserves to 238 petajoules last month and aims to reach 1,250 petajoules in 2012, enough gas to support an LNG plant producing 1 million metric tons of the fuel annually over 20 years, De Stefani said.

‘LNG Opportunity’

The offer values Bow at about 6 Australian cents a gigajoule of gas reserves that may be recoverable, 33 percent less than the price Santos agreed to pay for Eastern Star and the amount Shell and PetroChina paid last year for Arrow, John Young, a Melbourne-based analyst at Wilson HTM Investment Group, estimated today. Those deals valued the targets at 9 cents a gigajoule, he said.

“Bow is still working to demonstrate conversion to 2P reserves,” from proven, probable and possible reserves, “whereas Arrow and Eastern Star were probably more advanced,” Young said, adding he thinks a rival bid is unlikely.

Dart Energy Ltd. (DTE), a Sydney-listed company developing coal bed methane resources in countries including Australia, rose 6.7 percent to 56 cents in Sydney, the most in four months. Exoma Energy Ltd. (EXE), a natural gas explorer in Queensland, climbed 21 percent to 14.5 cents in Sydney, the most since July 1.

A transaction with Bow would help Arrow increase the size of its first two LNG processing units, Chief Executive Officer Andrew Faulkner said today in a statement. Arrow initially plans to produce 4 million tons of LNG a year from each of the first two units, the company said this month.

‘Complementary’ Businesses

Shell is “quite happy” to wait to develop the Arrow LNG project as costs to develop ventures rise, Peter Voser, chief executive officer of The Hague-based company, told analysts in July. Arrow expects a final investment decision to proceed with its development in late 2013, Faulkner said in June.

“Shell’s public statements indicate that they didn’t mind being last, and they were willing to wait,” RBC’s Williams said. “Now it looks as though they may want to accelerate it. It’s a clear signal there is an LNG opportunity out there.”

Bow recommends that shareholders take no action at this stage, the company said in the statement.

“It makes sense for both companies to explore business opportunities given the proximity of both companies’ coal-seam gas assets and the complementary nature of our businesses,” Arrow’s Faulkner said. “Arrow has the technical capability, capital resources and guaranteed market that may assist Bow Energy realize the potential of its assets.”

Conoco and Sydney-based partner Origin Energy Ltd. (ORG) last month approved the first phase of a $20 billion project in Queensland. Santos said in January its venture would cost $16 billion, while BG in October said it would invest $15 billion.

To contact the reporter on this story: James Paton in Sydney jpaton4@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.

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The takeover of gas producer Arrow Energy Ltd. by Royal Dutch Shell Plc and PetroChina Co. will generate a A$326 million ($308 million) profit for shareholder New Hope Corp., giving the coal miner more cash for acquisitions.

By James Paton – Aug 26, 2010 4:48 AM GMT+0100

THE NEW YORK TIMES

Published: July 24, 2010

SYDNEY (Reuters) – Arrow Energy (AOE.AX) shareholders approved a $3.05 billion takeover by Royal Dutch Shell (RDSa.L) and PetroChina’s (0857.HK) on Wednesday, clearing the way for a final legal go-ahead due later this week.

Shareholders voted to demerge Arrow’s international assets into Dart Energy, a newly listed entity, and to sell the bulk of the company, including the coveted coal-seam gas assets to a consortium of Shell and PetroChina in an agreed deal.

The deal cleared a major regulatory hurdle on Wednesday after the National Development and Reform Commission of China recommended the offer and waived a requirement to obtain clearance from the State Administration of Foreign Exchange of China.

The last hurdle for the deal will be approval from the Federal Court of Australia, which is due to rule on the spin-off on July 16.

The Shell-PetroChina joint venture will integrate Arrow’s Australian assets with Shell’s existing CSG assets and Shell’s site for a planned Liquefied Natural Gas (LNG) plant on Curtis Island, Queensland, the companies said previously.

Shell and PetroChina will each own 50 percent of the gas produced by the LNG plant and the Anglo-Dutch oil major said it was likely to sell its gas to China.

^> Shell and PetroChina offered A$4.70 a share for most of Arrow’s domestic coal seam gas assets. Arrow shareholders are also set to receive one share in Dart Energy, for each share in Arrow.

Arrow shares, which have risen more than 20 percent so far this calendar year, last traded at A$4.99.

(Reporting by Michael Smith; Editing by Ed Davies and Balazs Koranyi)

THE WALL STREET JOURNAL

MAY 4, 2010

SYDNEY (Dow Jones)–Royal Dutch Shell PLC (RDSB.LN) said Wednesday there has been no change to it and PetroChina Corp.’s (PTR) A$3.44 billion takeover offer for Arrow Energy Ltd. (AOE.AU).

“There’s been no change to the proposed offer following FIRB (Foreign Investment Review Board) approval,” a Shell spokesman said.

“Shell continues to look at the impact of the government proposal across all of our Australian investments,” the spokesman said, referring to the resource super profits tax announced this week by the Australian government.

The spokesman declined to comment on whether there might ever be a change to the terms of the deal.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; ross.kelly@dowjones.com

WSJ ARTICLE

April 30 (Bloomberg) — Royal Dutch Shell Plc and PetroChina Co. received approval from Australia’s Foreign Investment Review Board to acquire gas producer Arrow Energy Ltd. in a A$3.5 billion ($3.3 billion) transaction.