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Arrow Energy Shares Rise After 50% Increase in Gas Reserves

BLOOMBERG

By James Paton

Jan. 27 (Bloomberg) — Arrow Energy Ltd., Royal Dutch Shell Plc’s coal-seam gas partner in Australia, rose the most in three weeks in Sydney trading after it announced a 50 percent increase in gas reserves.

Arrow gained for the first time in six days, advancing as much as 5.4 percent to A$4.29, the most since Jan. 5, and traded at A$4.26 at 10:13 a.m. The benchmark ASX/S&P200 Index was 1.2 percent lower.

Brisbane-based Arrow is spending A$300 million ($270 million) on a drilling campaign to support the production of liquefied natural gas in the state of Queensland. Arrow said Jan. 4 it will own the LNG produced from the first unit of a proposed plant at Fisherman’s Landing after a revised agreement with LNG Ltd. The Gladstone project is one of five in Queensland planning to tap gas extracted from coal seams for conversion to liquid form and export to Asia.

Proved and probable reserves rose to 6,150 petajoules and Arrow may now be able to add as much as 1.5 trillion cubic feet of proved and probable reserves annually over the next three years. That compares with its previous estimate of 1 trillion cubic feet of reserves a year, it said in a statement to the Australian stock exchange today.

“This acceleration of reserve additions will ensure that we are well placed for future commitments to further growth opportunities,” including a potential second unit at Fisherman’s Landing and the supply of gas to Shell’s proposed Curtis Island project, Managing Director Nick Davies said in the statement.

To contact the reporter on this story: James Paton in Sydney [email protected].

Last Updated: January 26, 2010 18:31 EST

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