woosh underpin 123 pj gas sales, page-2

tipton west - certification of proved, probable an ASX ANNOUNCEMENT
18 May, 2005
Tipton West Gas Reserves Certification of 2 TCF to underpin 123 PJ
Gas Sale Agreements
Tipton West Field (PL 198, Arrow Energy 80%, Comet Ridge 20%)
Arrow Energy NL [Arrow] is pleased to announce the achievement of a major milestone with
the certification of Proved, Probable and Possible reserves on its second development field,
Tipton West. The Tipton West Project is located in the Surat Basin approximately 20km
south of the township of Dalby in Queensland.
Netherland Sewell and Associates Inc [NSAI] of Dallas, Texas, USA have certified initial
reserves on Tipton as follows:
Proven 1P 61 PJ
Proven + Probable 2P 143 PJ
Proven + Probable + Possible 3P 2,028 PJ
The 3P reserves of approximately 2 trillion cubic feet of gas confirms the enormous potential
of this field and is almost double the previously certified 3P reserves of 1,029 BCF
announced in July 2004.
Arrow has gas sales Memoranda of Understanding (MOU’s) for 123 PJ of gas reserves from
the Tipton West field, comprised of 60 PJ to Wambo Power Ventures (50% Babcock &
Brown, 50% ERM Power), 48 PJ to Ergon Energy and 15PJ to BP. All of these MOU’s can
now proceed to, or continue with, Gas Sales Agreement (GSA) negotiations with a view to
achieving financial close by the end of September 2005 and first gas sales from Tipton West
within a further twelve months. Arrow has a further MOU with ERM Wambo for 225 PJ which
is not field specific.
Gas sales from Stage 1 of the Tipton West project development are planned to ramp up to
10.2 PJ p.a. (28 TJ/day). In addition, by the end of 2006, Arrow’s production timetable has
11 TJ/day from Kogan North (first gas sales to CS Energy on track for October 2005) and 5.5
TJ/day to the Daandine well head generation project (first electricity sales to Country Energy
scheduled for March 2006).
Arrow’s combined Tipton West, Kogan North, and Daandine field production target by the
end of 2006 is 44.5 TJ/day gas or 33 TJ/day net to Arrow.
The initial 2P reserves certification is restricted to the areas immediately surrounding the pilot
and the monitoring wells (see attached Reserves type map). Typically, 1P reserves are
assigned for one well spacing away from known producing wells and 2P reserves for two well
spacings. Further reserves certification of additional 2P reserves is likely with successful
production from the TWP17 well, planned to be drilled this month, 3km to the North of the pilot area. Additional 2P reserves are targeted to be added, during the field development
phase as production wells are gradually drilled to in-fill all areas and coal seams and thereby
convert further 3P volumes to 2P volumes.
As well as the Kogan North, Tipton West and Daandine projects in the Surat Basin, Arrow
has a further 7 projects in early to advanced stages of exploration and appraisal. These
further projects, in the Surat Basin, Clarence Moreton Basin and Nagoorin Graben, will be
developed, subject to continued positive appraisal results to meet Arrow’s target of 45 PJ
p.a. (123 TJ/day) of operated gas production by 2010.
For and on behalf of the Board of Directors
JPK Marshall
Company Secretary
The reserves estimates used in this statement were compiled by Mr. John Hattner of
Netherland, Sewell & Associates, Inc., Dallas, and are consistent with the definitions of
proved, probable, and possible hydrocarbon reserves that appear in the Australian Stock
Exchange (ASX) Listing Rules. Mr. Hattner consents to the use of the reserves figures in this
announcement.
For further information contact:
Stephen Bizzell or Nick Davies
Phone (07) 3303 0650
Fax: (07) 3303 0651
E-Mail: [email protected]
Website: www.arrowenergy.com.au