OilVoice - Arrow Energy Reports Significant Reserves Upgrade

Arrow Energy Reports Significant Reserves Upgrade

Wednesday, January 27, 2010

Arrow Energy Limited announces a significant reserves upgrade certified by independent consultants Netherland, Sewell and Associates Inc (NSAI) and MHA Petroleum Consultants LLC (MHA).

Arrow's gross proved and probable (2P) reserves have increased 50.3 percent to 6,150 PJ while gross proved, probable and possible (3P) reserves are up 18.6 percent to 11,042 PJ. The company has added 3,458 gross 2P reserves in 12 months which substantially exceeded our target to add at least 1,000 PJ of gross 2P in 2009.

After adjusting for the recent Shell pre-empt on Tipton West 2P reserves net to Arrow have increased 53.4 percent to 3,690 PJ and net 3P reserves have risen 13.8 percent to 5,781 PJ.

This substantial increase in 2P reserves following the similarly large 2P reserves increase in June 2009 demonstrates Arrow's ability to continue to convert the estimated gross gas resource of 74,000 PJ that exists on our Australian tenements to commercial reserves, and is a direct result of the $300m exploration and appraisal program, the maturation of our gas fields and our technical and reservoir knowledge. Exploration and appraisal activity over the next twelve months will focus on expanding our 3P footprint through further conversion of our contingent resource, with 3,000 PJ of gross 3P expected to be added in 2010 and gross 2P reserves additions expected to be 1,500 PJ as we begin a new reserves maturation cycle.

Arrow operated tenements now have 5,379 PJ of gross un-contracted 2P reserves which is a substantial contribution towards reserve requirements for future growth opportunities which include a potential second LNG train at Fisherman's Landing and supply of gas to Shell Australia's LNG facility planned for Curtis Island, Gladstone.

During the half year to December 31st, 2009, Arrow Energy transferred reserves associated with the Tipton West Joint Venture to Shell as part of the exercise of its pre-emption rights following Arrow's purchase of Beach Petroleum's interest in the Joint Venture.

Arrow Managing Director Nick Davies said:
'In July last year Arrow announced a $300mm exploration and appraisal program to complete 76 pilots and 89 core wells - our largest and most comprehensive reserves certification program ever. So, it is especially pleasing to announce such a significant upgrade to our reserve position in the early days of that program - and before much of that work has borne fruit. Our previously stated goal was to add approximately 1 TCF of gross 2P reserves each year, we now believe that for the next 3 years we may be able to add up to 1.5 TCF per year. This acceleration of reserves additions will ensure that we are well placed for future commitments to further growth opportunities in the domestic market, Fisherman's Landing or Curtis Island.'