that is an interesting one. I would have thought FID was a key date in the unravelling of the back room plan.
As a sum of parts though, we know that: -shell may have made a low ball offer already -shell have executive staff within arrow -shell are continuing to embed staff within arrow -arrow are aggressively explanding the surat resource for FishLNG -arrow have conducted a significant amount of exploration in the Bowen -arrow have expanded quite rapidly into asia with CBM - in all the companies i have reviewed - I dont think I have seen any, anywhere near as advanced in an international cbm approach
Arrows attempt to shore up reserves (esp in Bowen), move to enhance their production profile and the international program are three key ingredients that could imply Shell is looking at them.
The Fish LNG progression is not necessarily a sign that Shell is pushing for an Arrow acquisition - rather that Arrow has chosen to stick to its core business plan. There are natural benefits here if Shell were looking at them.
My suspiscion is that Shell may be leveraging Arrows lower quality acreage heavily against them in favour of moving to an APLNG or GLNG deal.
The most sense I can make of it all is that Shell will make a low ball offer for Arrow and enter into a scaled back LNG plant deal with Origin or Santos.
There is a lot of stalling and screwing around coming Arrows way if this is the case.
I think that if Shell is going to have a go, that Arrow will have a go at BOW first. You would be a fool to think that just because BG did it (with QGC/SHG) that it will happen with BOW/AOE - but I have looked at it sideways and I think it is a real possibility.
I hold hoping that Arrow proceeds on their own in the first instance with the FishLNG.
Cheers,
SF
AOE Price at posting:
$4.07 Sentiment: Buy Disclosure: Held
