2009-04-09-2009-04-03-2009-04-03

Bought 40% stake in JV in Surat Basin, gaining 1 Tcf 2P.

Arrow Energy Ltd., Brisbane, Australia, (Australia: AOE) has acquired a 40% stake in the Tipton West Field in Australia from Beach Petroleum Ltd., Adelaide, Australia, (Australia: BPT) for approximately US$285 million (A$400 million). Arrow will pay A$260 million in cash on completion, A$70 million in shares, A$40 million in cash for the booking of additional gross proved, probable and possible gas reserves, A$15 million in cash upon gas owned by Arrow supplying any LNG project no later than Dec. 31, 2016, and A$15 million in cash upon any LNG project producing an annualized equivalent of 1 million tons per annum of LNG using gas supplied from Arrow's tenements no later than Dec. 31, 2017. The assets feature a joint-venture interest in the Walloon coal-seam gas properties in the Darby area of the Surat Basin in Queensland. Gas production at year-end 2008 was approximately 28 million cubic feet of gas per day. Proved and probable reserves as of July 2008 were 1,107 petajoules or approximately 1 trillion gross cubic feet of gas (421 billion net). Arrow is operator of the field and now holds 82% interest in the joint venture. Beach managing director Reg Nelson says, "This deal realizes significant and immediate value from a small investment in the then nascent coal seam gas industry only a few years ago. The cash generated from what was a material, but non-core asset, leaves Beach in a strong net cash position." Core Energy and Gryphon Partners were advisors to Beach.