ARROW TARGETS FISHERMAN’S LANDING FOR $167M
Written on the 1 April 2010
ARROW Energy Limited (AOE) will acquire the Fisherman’s Landing LNG project after an agreement with Liquefied Natural Gas Limited (LNG) with a potential end value of $167.5 million.
Arrow will pay $51 million up front. The transaction will cost a further $116.5 million once various milestones on the project are complete, but the acquisition is still subject to due diligence and shareholder approval at a meeting set to be scheduled within 45 days.
The acquisition also includes a grant of 12.5 million options to acquire Arrow shares at an exercise price of $3.50, with a May 14 expiry date.
AOE managing director Nick Davies, says initial site works have begun on the site with project and design at an advanced stage.
“Arrow is excited to be taking full control of the construction and future operation of the world’s first CSG to LNG facility,” says Davies.
“The further simplification of the Fisherman’s Landing LNG development and the elimination of the commercial agreements with LNG Limited, will improve the ability to construct, finance and ultimately allow for greater flexibility in the operation of the plant.”
CEO Shaun Scott (pictured) says the project will be the next leg of growth for the company, following the success of the Braemar 2 Power Station.
The Environmental Impact Study (EIS) has been completed for the downstream part of the project and Scott expects a pipeline license to be issued soon, but the upstream EIS process is ongoing.
“We’re in the process of completing our EIS for the upstream parts but fundamentally what we’re doing in terms of the wells and facilities that we’re developing is really just expanding upon what we’ve already done,” he says.
“It’s a process that we need to go through and there’s work that we need to do to demonstrate from an environmental perspective that the proposed development and the way we deal with water, and gas and so on is being managed to the best extent.”
AOE shares rose 2.4 per cent today to $3.48.