Arrow launches $294m expansion for LNG, international projects

30 July 2007 | 07:46 Code : 14744 Geoscience events
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Australia’s leading coal seam gas producer, Arrow Energy has launched a $294m.....
Arrow launches $294m expansion for LNG, international projects

  Australia’s leading coal seam gas producer, Arrow Energy has launched a $294m development program over the next 18 months to ramp up the multi-billion dollar Gladstone LNG project, accelerate exploration in key Australian acreages and to roll out its international expansion.Arrow Chief Executive, Nick Davies said the program would be funded through a $125m placement, $25m share purchase plan, $75m from existing financing arrangements through Sweden’s Energy Infrastructure Group, along with $69m existing cash and cashflow from production operations. Mr Davies said the program represented a step change in the coal seam gas producer’s growth, both domestically and internationally. Pricing for the bookbuild will range from $2.20 to $2.35, with pricing for the share purchase plan to be based on the lesser of the placement price and the placement discount to the 10-day VWAP. “This capital raising will help Arrow execute its current domestic growth plans in eastern Australia to benefit from a tightening of gas prices as we build towards a 2P (proved and probable) net reserve target of 1,550 petajoules by end of fiscal 2008,” Mr Davies said. “We will also accelerate the exploration, development and appraisal of our acreage for the proposed Gladstone LNG project in partnership with LNG International and Golar LNG, which will give Arrow exposure to oil pricing and potentially more than double production,” he said. Mr Davies said Arrow’s current reserve certification had been obtained from less than two percent of its 90,000sqkm of exploration acreage. He said the company will spend around $110m over the next 12 months to ramp up its reserves and to develop new projects.

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