Arrow Energys gas reserves upgrade has increased the Australian-listed energy groups attraction as a takeover target, The Australian reported.
Arrow revealed the reserves upgrade yesterday in the following announcement:
Arrow Energy Limited announces a significant reserves upgrade certified by independent consultants Netherland, Sewell and Associates Inc (NSAI) and MHA Petroleum Consultants LLC (MHA).
Arrows 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.
According to The Australian report, which did not cite sources, any upgrade increases Arrows attractiveness to potential buyers. The report said that Shell has already made an informal offer rejected as too low.
An unsourced report in the Australian Financial Reviews Street Talk column said that other potential buyers include CNOOC, Petrochina, and ExxonMobil.
The report also noted that Deutsche Bank has emerged as a 5.9% stakeholder in Arrow, with much of it held under agreement. The paper said that Sinopec, the Chinese oil group, was trying to acquire Arrow shares last year, with Deutsche Bank rumoured to be the broker.
AOE Price at posting:
$4.20 Sentiment: LT Buy Disclosure: Held
