ARC Energy Limited (ASX:ARQ) is pleased to advise that it has entered into a major gas sales agreement (GSA) with Alcoa Australia for the delivery of up to 500 petajoules of gas from future discoveries on ARC’s interests in the onshore Canning Basin. The GSA includes a gas prepayment by Alcoa to ARC of A$40 million in September 2007 that will be used to accelerate ARC’s regional Canning Basin exploration program."
Comment: You can't get more bullish about drilling success than that ... making a sales agreement before the gas has been discovered!
In an Open Briefing also released today:
"The Wandoo acquisition turns out to be a “cracker”, a bit like the Alcoa deal. Our reserves have essentially trebled, the BassGas project looks to have the potential to have twice the resources we thought and we think the offshore Perth Basin will be a good long term exploration playground for us. The oil price has also been very strong which is making our bankers smile, a rare occurrence, so the structuring of the Wandoo deal has worked out very well for us and we also have plenty of financial firepower left so are looking at a number of additional things to continue to add value.
..Our strategy has been to focus on share price growth through acquisitions that have good upside and through oil and gas exploration. We had a terrific recognition of the value of the Wandoo acquisition when the share price appreciated to around $1.80, but it has been very frustrating to see the price come off from these levels and also quite dangerous for our shareholders as it makes the Company much more attractive to a potential acquirer."
ARQ Price at posting:
0.0¢ Sentiment: None Disclosure: Held
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