fort cooper coal boost

http://www.theaustralian.news.com.au/business/story/0,28124,25339249-5005200,00.html

Bow gets a little pump at the end.

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Ross Kelly | April 16, 2009
Article from: Dow Jones Newswires
ARROW Energy Ltd has achieved gas flows from coal tenements previously thought unsuitable for gas extraction, prompting shares in the coal seam gas specialist to surge.

Brisbane-based Arrow said the surprise development meant it could be sitting on a substantial new CSG resource -- one that was much bigger than anything it had found before.

"Our exploitation manager regards it as the most significant development in his time at the company and (it) stands as Arrow's greatest prospect," a spokesman said.

Arrow shares rose 22c to $3.13 on the news.

The initial gas flows came from the Fort Cooper Coal Measures at the Bowen Basin in Queensland.

Arrow estimates the measures could contain more than 21,050 petajoules of gas. To put that in perspective, the company produced about 16 petajoules of gas in total last year.

The company had previously thought the Fort Cooper Coal Measures could be too hard to mine because the coal is banded, meaning its thickness is irregular. The coal is also tighter, meaning it has lower gas permeability.

But the trial of a hydraulic drill, which fractures the coal to make the gas easier to extract, has yielded promising results.

"We emphasise that it is early days for the testing of the Fort Cooper Coal Measures as a major producing zone.

"However, the company is very excited about the initial results from these first pilot wells," Arrow said.

Along with initial flows at the Fort Cooper Coal Measures, Arrow said high flow rates in the shallower Rangal Coal Measures had provided a "major boost" to its plans to supply multiple liquefied natural gas trains at Gladstone on the Queensland coast.

Arrow has agreed to supply Liquefied Natural Gas Ltd with CSG for a planned LNG terminal at Gladstone.

It has also agreed to provide local joint venture partner Royal Dutch Shell with gas should it decide to build an LNG plant at the port town.

Arrow currently produces CSG from the shallow section of the Moranbah Gas project in the Bowen Basin and from projects in the nearby Surat Basin. It said production testing showed promising gas flows from the deeper part of Moranbah.

A smaller company with CSG interests in the Bowen Basin, Bow Energy Ltd, also had a good day on the market yesterday, as its shares rose 9.7 per cent to $1.25.