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[alpha] =?utf-8?q?INSIGHT_-_CN65_Re=3A_CHINA/AUSTRALIA/ENERGY/GV_?= =?utf-8?q?-_Shell=2C_PetroChina=E2=80=99s_Arrow_Energy_Offers_=24540_Mill?= =?utf-8?q?ion_to_Acquire_Bow_Energy?=

Released on 2012-02-29 14:00 GMT

Email-ID 2654712
Date 2011-08-24 04:11:24
**Asked source if we should care about this news.

ATTRIBUTION: Australian contact connected with the government and
natural resources
SOURCE DESCRIPTION: Former Australian Senator
The Consul-General said last week that gas was of great importance to
them, as were all energy supplies, but gas particularly so. There was the
usual stuff concerning their environmental concerns, but he stressed that
they were going to make long term commitments to the gas sector. He did
not differentiate between off-take commitments, or equity commitments.
I also know that CNOOC has an investment team sitting in Brisbane, headed
by a GM. This is interesting, as they have not made any equity
investments, which suggests they may be intending or hoping to do so.
That would be an additional stake over the ones announced so far.
There is a potential Chinese gas deal that has been in negotiation for
sixteen months. I don't know if this involves CNOOC or not, so it could
be yet another deal, as i don't believe it is the bid for Bow.
The gas sector is fairly tightly held in Australia. I don't know what
minor explorers are left, but they are probably in NSW, rather than
Queensland. Queensland has already seen a fair bit of consolidation over
the last six or seven years.
Of course any bid will have to go through the FIRB. There is also a lot
of community concern in the farming sector about impacts on the aquifers,
which concern is well based. That may also be a factor in any FIRB

Should we care about this? What are the Chinese up to lately in Oz?

-------- Original Message --------

Subject: CHINA/AUSTRALIA/ENERGY/GV - Shell, PetroChina's Arrow
Energy Offers $540 Million to Acquire Bow Energy
Date: Mon, 22 Aug 2011 09:38:05 -0500
From: Michael Sher
To: The OS List , Jennifer Richmond

Shell, PetroChina's Arrow Energy Offers $540 Million to Acquire Bow
Aug 22, 2011 2:09 AM CT

Arrow plans a fourth LNG venture on Queensland's Curtis Island,
following approvals for more than $50 billion in rival developments
led by BG Group Plc, Santos Ltd. and ConocoPhillips to meet rising
demand in Asia. Photographer: Eric Taylor/Bloomberg

Arrow Energy Ltd., owned by Royal Dutch Shell Plc (RDSA) and
PetroChina Co., offered about A$520 million ($540 million) for Bow
Energy Ltd. (BOW), seeking more resources to underpin a proposed
liquefied natural gas project in Australia.

Arrow, a coal-seam gas explorer and producer in Queensland state,
offered A$1.48 a share in cash, Brisbane-based Bow said today in a
statement. That's 67 percent more than Bow's price of 88.5 cents in
Sydney trading on Aug. 19. The shares surged 60 percent today to
A$1.415 at the 4:10 p.m. close.

The bid "does significantly undervalue the stock compared with where
we think it should be," said Andrew Williams, a Melbourne-based oil
and gas analyst at RBC Capital Markets, who has a price target of
A$1.75 on Bow's shares. "It still leaves scope for upside and more
play to come."

Arrow plans a fourth LNG venture on Queensland's Curtis Island,
following approvals for more than $50 billion in rival developments
led by BG Group Plc (BG/), Santos Ltd. (STO) and ConocoPhillips
(COP) to meet rising demand in Asia. Bow has been the subject of
takeover speculation since Santos, Australia's third-largest oil and
gas producer, agreed last month to pay about A$730 million to buy
the shares in Eastern Star Gas Ltd. (ESG) it didn't already own.

Bow has been in talks to supply gas to the companies developing the
LNG projects in Queensland as it targets a more than fivefold gain
in reserves by next year, Chief Executive Officer John De Stefani
said in an Aug. 3 interview. Bow increased its proven and probable
reserves to 238 petajoules last month and aims to reach 1,250
petajoules in 2012, enough gas to support an LNG plant producing 1
million metric tons of the fuel annually over 20 years, De Stefani
`LNG Opportunity'

The offer values Bow at about 6 Australian cents a gigajoule of gas
reserves that may be recoverable, 33 percent less than the price
Santos agreed to pay for Eastern Star and the amount Shell and
PetroChina paid last year for Arrow, John Young, a Melbourne-based
analyst at Wilson HTM Investment Group, estimated today. Those deals
valued the targets at 9 cents a gigajoule, he said.

"Bow is still working to demonstrate conversion to 2P reserves,"
from proven, probable and possible reserves, "whereas Arrow and
Eastern Star were probably more advanced," Young said, adding he
thinks a rival bid is unlikely.

Dart Energy Ltd. (DTE), a Sydney-listed company developing coal bed
methane resources in countries including Australia, rose 6.7 percent
to 56 cents in Sydney, the most in four months. Exoma Energy Ltd.
(EXE), a natural gas explorer in Queensland, climbed 21 percent to
14.5 cents in Sydney, the most since July 1.

A transaction with Bow would help Arrow increase the size of its
first two LNG processing units, Chief Executive Officer Andrew
Faulkner said today in a statement. Arrow initially plans to produce
4 million tons of LNG a year from each of the first two units, the
company said this month.
`Complementary' Businesses

Shell is "quite happy" to wait to develop the Arrow LNG project as
costs to develop ventures rise, Peter Voser, chief executive officer
of The Hague-based company, told analysts in July. Arrow expects a
final investment decision to proceed with its development in late
2013, Faulkner said in June.

"Shell's public statements indicate that they didn't mind being
last, and they were willing to wait," RBC's Williams said. "Now it
looks as though they may want to accelerate it. It's a clear signal
there is an LNG opportunity out there."

Bow recommends that shareholders take no action at this stage, the
company said in the statement.

"It makes sense for both companies to explore business opportunities
given the proximity of both companies' coal-seam gas assets and the
complementary nature of our businesses," Arrow's Faulkner said.
"Arrow has the technical capability, capital resources and
guaranteed market that may assist Bow Energy realize the potential
of its assets."

Conoco and Sydney-based partner Origin Energy Ltd. (ORG) last month
approved the first phase of a $20 billion project in Queensland.
Santos said in January its venture would cost $16 billion, while BG
in October said it would invest $15 billion.

Jennifer Richmond
China Director
Director of International Projects
w: 512-744-4105
c: 512-422-9335