Coal seam gas producer Arrow Energy NL has grown market capitalisation tenfold over fiscal 2007 and delivered its maiden full-year profit. CEO Nick Davies says the company has made the switch from explorer to producer with strength in depth in staff and technology, both at home and abroad.
Here is what Mr Davies told investorTV about the rssults and the company's plans:
Arrow is releasing its financial results today. The financial results are very positive for the last 12 months and they are really a culmination of the many things we’ve been working towards over the last few years.
The things that we’ve been working towards are really about establishing a very credible and solid operating and producing company, which is a transition from the exploration company that Arrow was a few years ago.
In order to do that, we’ve been strengthening our technical team, strengthening our commercial ability and most of all delivering on our promises.
Our financial results today show that we’ve done exactly that – we’ve delivered EBITDA of $10.65 million, which is just in excess of what we had promised to the market; we’ve delivered production of 10.36 petajoules, which is again just in excess of what we promised to the market.
It’s been a very solid year for Arrow, we believe we’re a very solid and established operating company now and we’re looking forward to moving on with high growth at the same time as establishing this foundation business.
Our priorities for this financial year are to continue to grow our business in Australia. We’ve got some projects that we’ll be moving into the second phase of, particularly the Daandine and Tipton projects.
Secondly, the priority will be to establish reserves for our LNG project that we’ve announced recently. We have a lot of certification to do and that requires a lot of exploration and pilot work.
Overall we have about 90 exploration wells planned and about 14 pilots for the next year, with a view to effectively doubling our certified reserves by the end of the financial year.
Those are our priorities domestically; internationally we have a lot of work to do.
We’ve recently announced seven potential projects in China. Over the course of the next few months we have to bring those over the finish line and get them to closure and complete the full formal agreements that we have in those areas, and in a lot of cases actually start work and drill exploration wells.
In other parts of the region, in Indonesia and Vietnam we have deals to complete there; and in India we have our exploration program to do, most of which will be done during the next financial year.
There’s been a lot of discussion about the LNG project that is scheduled to be built in Gladstone over the course of the next few years, particularly relating to the capital costs.
Now of course Arrow is a supplier to the LNG project and we have an arms-length gas sale. The proponents of the project are LNG Limited; we’ve looked closely at their plans for the plant and we’ve very satisfied with what we’ve seen.
Some of the beauty of the capital cost in this project is because of its size and it is small so therefore you can use processes that perhaps you can’t use in some of the bigger projects.
In particular, some of the things that have been done on the project is its single mixed refrigerant which makes it a very simple project. We’re also going to be using ammonia absorption which effectively lowers the inlet temperature of the gas into the compression and makes the compression more efficient every day. Those are two key things.
On the storage side, LNG Limited will be using concrete tanks that are lower capital cost than conventional tanks but are well-established and well proven around the world.
And the final thing is again because of its size we’ll be using an existing site and existing infrastructure in Gladstone port that already has a jetty associated with it and already has land prepared.
So all of those things will reduce capital costs significantly.
The second thing about the project is its commercial viability given its size. The fact that it’s only one train of 1 million tonnes of about 18 cargoes a year means that it’s very easy to place those cargoes if necessary in the spot market.
Arrow has clearly changed a lot over the last 12 months. Twelve months ago at the beginning of the financial year we had a market capitalisation of about $150 million and one producing project; 12 months later we have a market cap of about 10 times that and four established producing projects.
The last 12 months and the next 12 months are a period of establishing a very technically strong and commercially nimble exploration and production company that will be focusing and majoring in CBM [coal bed methane] because that’s what we do best. So we’ll be looking to continue to add to our staff and create strength in depth in technology both domestically and internationally in the company.
Arrow is releasing its financial results today. The financial results are very positive for the last 12 months and they are really a culmination of the many things we’ve been working towards over the last few years.
The things that we’ve been working towards are really about establishing a very credible and solid operating and producing company, which is a transition from the exploration company that Arrow was a few years ago.
In order to do that, we’ve been strengthening our technical team, strengthening our commercial ability and most of all delivering on our promises.
Our financial results today show that we’ve done exactly that – we’ve delivered EBITDA of $10.65 million, which is just in excess of what we had promised to the market; we’ve delivered production of 10.36 petajoules, which is again just in excess of what we promised to the market.
It’s been a very solid year for Arrow, we believe we’re a very solid and established operating company now and we’re looking forward to moving on with high growth at the same time as establishing this foundation business.
Our priorities for this financial year are to continue to grow our business in Australia. We’ve got some projects that we’ll be moving into the second phase of, particularly the Daandine and Tipton projects.
Secondly, the priority will be to establish reserves for our LNG project that we’ve announced recently. We have a lot of certification to do and that requires a lot of exploration and pilot work.
Overall we have about 90 exploration wells planned and about 14 pilots for the next year, with a view to effectively doubling our certified reserves by the end of the financial year.
Those are our priorities domestically; internationally we have a lot of work to do.
We’ve recently announced seven potential projects in China. Over the course of the next few months we have to bring those over the finish line and get them to closure and complete the full formal agreements that we have in those areas, and in a lot of cases actually start work and drill exploration wells.
In other parts of the region, in Indonesia and Vietnam we have deals to complete there; and in India we have our exploration program to do, most of which will be done during the next financial year.
There’s been a lot of discussion about the LNG project that is scheduled to be built in Gladstone over the course of the next few years, particularly relating to the capital costs.
Now of course Arrow is a supplier to the LNG project and we have an arms-length gas sale. The proponents of the project are LNG Limited; we’ve looked closely at their plans for the plant and we’ve very satisfied with what we’ve seen.
Some of the beauty of the capital cost in this project is because of its size and it is small so therefore you can use processes that perhaps you can’t use in some of the bigger projects.
In particular, some of the things that have been done on the project is its single mixed refrigerant which makes it a very simple project. We’re also going to be using ammonia absorption which effectively lowers the inlet temperature of the gas into the compression and makes the compression more efficient every day. Those are two key things.
On the storage side, LNG Limited will be using concrete tanks that are lower capital cost than conventional tanks but are well-established and well proven around the world.
And the final thing is again because of its size we’ll be using an existing site and existing infrastructure in Gladstone port that already has a jetty associated with it and already has land prepared.
So all of those things will reduce capital costs significantly.
The second thing about the project is its commercial viability given its size. The fact that it’s only one train of 1 million tonnes of about 18 cargoes a year means that it’s very easy to place those cargoes if necessary in the spot market.
Arrow has clearly changed a lot over the last 12 months. Twelve months ago at the beginning of the financial year we had a market capitalisation of about $150 million and one producing project; 12 months later we have a market cap of about 10 times that and four established producing projects.
The last 12 months and the next 12 months are a period of establishing a very technically strong and commercially nimble exploration and production company that will be focusing and majoring in CBM [coal bed methane] because that’s what we do best. So we’ll be looking to continue to add to our staff and create strength in depth in technology both domestically and internationally in the company.
