Arrow purchases 35% in Chinese CSG block
Arrow Energy Limited (AOE) subsidiary Arrow Energy International has signed an agreement with Fortune Oil subsidiary, Fortune Green Energy, to acquire a 35% stake in Fortune Liulin Gas. The company said the cost of the acquisition was US$13.3 million, while there are also conditional options to increase its stake to 75%.
Arrow said the considerations of the funds were being committed to the 2010 work program which includes the drilling of horizontal pilot wells.
The company said Fortune Liulin Gas’ sole asset is a 50% participating interest in the Luilin Coal Bed Methane (“CBM”) in China.
Arrow said the block has certified 3P reserves of 89 petajoules and is located 500 km south-west of Beijing.
CEO, Nick Davies, said the block provides an opportunity for the company to achieve near-term production and gas sales, while providing the company with some existing reserves.
As at 1052 AEDT, Arrow shares were up 8c to $4.03.
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