Arrow Energy (aoe)

[bermuda]

You probably right there ratkin .... looks like this gas thing was a bubble after all and won't live up to the hype

I got sucked in a month or so ago when the share price was about 430 ... went to 450 plus and it was all going well .... but had to bail out around the 400 mark ... jeez I hate losing money ... esp on something I don't really know much about

Anyway at 333 and heading downhill fast looks like the bubble has burst eh ... and generally they don't reinflate do they

Will keep watching though ... never know maybe an opportunity to make money on this after all

Winner,
You were around when the 1st CSG bubble burst. You have seen this before. It is happening again now. Please read the British Gas Quarterly. Gladstone is the Jewel in their Crown. And let me say they have some pretty impressive assets.

This thing will re-inflate with a vengenance with the 1st FID. Could be Arrow,...could be British Gas.

Remember.......This ,........is a ........WORLD FIRST.

And British Gas last week said it is definitely going to happen. Wait for the bottom and get on board. I just hold.

[STRAT]

I just hold.Hi Super B,
Have you got on board or were you just referring to your trading style? :D

[bermuda]

Hi Super B,
Have you got on board or were you just referring to your trading style? :D

Hi Strat,
replying on this new format ain't as clear as what it was. Hope Vicky can get it sorted because it has left me feeling down. Sounds like some sort of advertising agency talked them into it. I prefer the old format...but then again.......I am getting older.

Re your question. Sorry I was talking generically. I dont hold AOE......... but it has crossed my mind to only have one stock. ........And that would be AOE.

[STRAT]

Hi Strat,
......... but it has crossed my mind to only have one stock. ........And that would be AOE.All your eggs in one basket or should I say all your egg farms?
Bad Idea I reckon and heres why.

You thought about it with VPE. That wouldnt have turned out too good to date.

You are far to good a stock picker. Your talent wold be layed to waste.

You would get very very bored :D

[Footsie]

a lot of these energy stocks
AOE, BPT, BOW, ESG etc are starting to look a bit oversold.
Sentiment is poor right now..... but the story is not over. I think within the next few years they will all come back with avengence.
watch the charts because when they turn, the next move up could be veryv very powerful.

[bermuda]

a lot of these energy stocks
AOE, BPT, BOW, ESG etc are starting to look a bit oversold.
Sentiment is poor right now..... but the story is not over. I think within the next few years they will all come back with avengence.
watch the charts because when they turn, the next move up could be veryv very powerful.

Footsie,
I am absolutely with you on this. This is a world FIRST. And there are so many many doubters. Voelte from WPL included. ( well...that is half the Aussie energy market ) When this moves, it will move fast. Remember...again...this is a WORLD FIRST....and BG have already ticked it off financially. And they beat WPL to be the supplier to the new Singapore Gas Hub. It is time Voelte took a good look at Queensland CSG.

Strat,
Yes I got lucky with BOW and I reckon I will get real lucky with VPE. What a program in front of them. This game does require extreme patience. At this stage we have our eggs in BOW, BUL, ITC, STX, TEX, VPE, WCL. One day I might just put the lot on AOE. Am really impressed with Davies.

But, I like the idea of 5 stocks. ( my wife actually has BUL ,STX and WCL in her portfolio). It would be so boring to have only one. I learnt this from the Axioms of Zurich.
BG know what's going on. Gladstone is the Jewel in their Crown...... And Davies planned this a long time ago.

[soulman]

CSG sector getting hammered continuing. Who are nibbling at some at the mo?

[bermuda]

CSG sector getting hammered continuing. Who are nibbling at some at the mo?

Soulman,
I wish I could have a go but am fully invested awaiting great things. The market is the market. But both BOW and AOE know exactly where this is heading.

And so do British Gas. Fancy them describing Gladstone as " Their Jewel in their Crown". BG have a pretty big international crown.

[shasta]

Thats the story Bermuda, a 5 stock max portfolio is inline with my own strategy, if you would want to put funds into another stock, instead of the 5 you hold, you need to consider why you are holding them in the first place!

I'm out of the market, but have a very good idea where i'd be putting my money into...

[lissica]

Here we go again...more takeover talk:

http://tinyurl.com/yczjn8z

In todays Business Spectator:

Anglo-Dutch oil major Royal Dutch Shell Plc has made a takeover offer for energy company Arrow Energy Ltd worth more than $3.3 billion, according to The Australian Financial Review.

According to the newspaper, Arrow has cancelled a planned investor roadshow this week after receiving the offer late last week.

The AFR reports that the move was sparked by Arrow's recent restructure of its Fisherman's Landing LNG project, including its need to secure $2.2 billion in funding for capital expenditure.

A potential sale of some of Arrow's stake in its domestic coal seam acreage, in which Shell owns 30 per cent, is also believed to be a factor, according to the newspaper.

Shell owns a 10 per cent share in Arrow's international unit.

[Ketel One]

There it is:

Non-binding conditional proposal
Arrow Energy Limited (ASX:AOE, Arrow) today announces that it has received a non-binding indicative and conditional proposal (Proposal) from a company jointly owned by Royal Dutch Shell and PetroChina.
Under the Proposal Arrow shareholders would receive consideration of $4.45 cash per share plus a share in a new entity comprised of Arrows international business. Arrow has previously announced its intention to conduct an Initial Public Offering (IPO) of its international business.
At this stage the Arrow Board recommends shareholders take no action in relation to their Arrow shares.
Arrow has appointed Citi and UBS as financial advisers and Mallesons as legal advisers in relation to the Proposal.

[macduffy]

AOE trading at $5.01.

Either the market expects a higher bid or it values the International business - to be retained by AOE shareholders - as worth more than 55cps.

Or a combination of both!

[JBmurc]

talk about wrong time to sell out LOL Bank of america also sold out of BPT recently

Both Bank America Corporation and National Australia Bank have reduced their exposure to Arrow Energy. BA’s ceased to be a substantial holder on 25 February. The NAB ceased to be a substantial holder on 26 February

[mark100]

Well I missed my chance to top up. Was waiting for the expected rights issue for that. International business probably has around 50c/share of value so I reckon a small sweetner from Shell will get it across the line. I will sell for $5.50

[macduffy]

Comment from John Durie of The Australian.

http://www.theaustralian.com.au/business/opinion/shells-bid-for-arrow-was-always-a-question-of-when-rather-than-if/story-e6frg9if-1225838410329

[bermuda]

Comment from John Durie of The Australian.

http://www.theaustralian.com.au/business/opinion/shells-bid-for-arrow-was-always-a-question-of-when-rather-than-if/story-e6frg9if-1225838410329

Sometimes I wonder about these Aussie journo's. They seem to underplay what is in fact a huge endorsement for the coal seam gas industry that will mean so much for Australia. I would hate to be the guys at NAB who just a few weeks ago decided to sell their $A70 million of Arrow. They just kissed goodbye to $30 million.

It makes you wonder.

[macduffy]

talk about wrong time to sell out LOL Bank of america also sold out of BPT recently

Both Bank America Corporation and National Australia Bank have reduced their exposure to Arrow Energy. BA’s ceased to be a substantial holder on 25 February. The NAB ceased to be a substantial holder on 26 February

But NAB are now back as a substantial holder.

I havn't analysed the transaction dates but it's possible that they "fortuitously" bought back before the latest price move.

[macduffy]

Comment from Brian Frith of The Australian.

http://www.theaustralian.com.au/business/opinion/did-arrow-hit-its-target-with-shell-petrochina/story-e6frg9if-1225841122241

I hold AOE.

[STRAT]

Now thats an interesting announcement this morning.

Gladstone on hold.

So who wins and who loses ?

[bermuda]

Now thats an interesting announcement this morning.

Gladstone on hold.

So who wins and who loses ?

Well the pre bids dont show LNG falling out of the sky but it is early days yet.

As for AOE, they are free to pursue other alternatives which obviously includes negotiating with Shell/PC but more importantly would allow another major to have a go at AOE. If I was Chairman of BG I would be putting a $7 offer in front of AOE this morning. It would set BG up for decades and enable a cashed up AOE to pursue their International business and provide another multi bagger for their shareholders.
There are many permutaions ( and yanks ) walking around Gladstone.
The Majors want secure energy reserves and CSG is a very economical and political stable investment.

[STRAT]

Well the pre bids dont show LNG falling out of the sky but it is early days yet.

As for AOE, they are free to pursue other alternatives which obviously includes negotiating with Shell/PC but more importantly would allow another major to have a go at AOE. If I was Chairman of BG I would be putting a $7 offer in front of AOE this morning. It would set BG up for decades and enable a cashed up AOE to pursue their International business and provide another multi bagger for their shareholders.
There are many permutaions ( and yanks ) walking around Gladstone.
The Majors want secure energy reserves and CSG is a very economical and political stable investment.Thanks Bermuda.

Interesting times ahead.

How does/will this impact on other QL CSG companies such as the ones we hold IYO?

[bermuda]

Thanks Bermuda.

Interesting times ahead.

How does/will this impact on other QL CSG companies such as the ones we hold IYO?

Well, I have held right through the worst GFC I have ever experienced and I dont intend to sell now. The world needs stable secure energy and CSG from Australia provides that. It ain't Girlie Gas. And I have heard that BHP wants to join the party. This just gets hotter. Would love BG to have a crack at AOE. Gladstone is BG's Jewel in their Crown. ..and It is a pretty big Crown.

[pedro.nz]

Has been my biggest holding for years - have always liked the CSG story and how Arrow have steadily progressed building the company.
That being the case, I will certainly keep a holding in Arrow International if that is how the end game plays out and the current management stay involved.

Would also like to start building a stake in another CSG player, but the question is, which company?
I have not really followed the other companies in any depth and plan on reading related threads again soon, but at this moment, does anyone have any strong views as to which company/s would be the best to do some research on?

BOW maybe?

[The Big Ease]

IMO BOW is the next best thing available.
It is a mini Arrow an operates from the hottest part of the CSG industry, QLD.

ESG, BUL and WCL are others to consider, though the latter two are long term plays and perhaps ESG will need some game changing facts to go its way. The game is hot in QLD, not yet in NSW.

[bermuda]

Has been my biggest holding for years - have always liked the CSG story and how Arrow have steadily progressed building the company.
That being the case, I will certainly keep a holding in Arrow International if that is how the end game plays out and the current management stay involved.

Would also like to start building a stake in another CSG player, but the question is, which company?
I have not really followed the other companies in any depth and plan on reading related threads again soon, but at this moment, does anyone have any strong views as to which company/s would be the best to do some research on?

BOW maybe?

I would be accused of ramping if I told you what I own. Okay, I have a bit of BOW....my retirement fund. But if you wanted something else which I don't own have a look at ESG. STO will take them over. Welcome to CSG...Fuel of the Future. ( we will see how shale gas goes...CSG first ).

The Arrow story is fascinating. Bow and Arrow. The reason I sold Arrow was to get into Bow. But remember Bow and Arrow are linked.

[macduffy]

The Australian seems to think that the Shell/PetroChina offer is firming up.

http://www.theaustralian.com.au/business/arrow-falls-for-higher-bid-as-shell-petrochina-offer-accepted/story-e6frg8zx-1225843480264

[Huang Chung]

If I was Chairman of BG I would be putting a $7 offer in front of AOE this morning. .

Bermuda, it would seem that Arrow management have a dimmer view of their worth than you do. Do you think Arrow management (always considered very talented) have sold the farm too cheaply, or are CSG valuations not quite what they might have been in the past?

[MrDevine]

HC, I think Shell were always going to get AOE. They already own 30% of the tenements, and NHC said they wanted to sell. They've turned a $66m investment into $600m+ so their shareholders are happy!

I think its pretty difficult to gauge what's the best valuation for CSG assets. Conocco probably paid over the top for Origins assets. But I think BG probably got what they wanted at a 'fair' price for QGC. The interesting aspect of this deal, is Shell waiving its rights to AOE's international assets. The founders will start again.

This deal does change the game for smaller players. It will be interesting to see what happens next and whether there will be just two LNG export plants setup (BG/ShellPetrochina). This would seem to make sense. Maybe smaller players to get into power generation and domestic gas supply?

But this deal still isn't done, and there is still opportunity to be had.

Mr D.

[macduffy]

But this deal still isn't done, and there is still opportunity to be had.



In the absence of a rival bidder it seems to be all over bar the shouting. It's to be effected by a scheme of arrangement and I'd be very surprised if AOE management havn't lined up the big shareholders, at least enough of their votes to carry the day.

[bermuda]

Bermuda, it would seem that Arrow management have a dimmer view of their worth than you do. Do you think Arrow management (always considered very talented) have sold the farm too cheaply, or are CSG valuations not quite what they might have been in the past?

HC,
Arrow would have the best management team going. Just a matter of time before BG throw their bid in. Imho this is history repeating itself. $7 plus.

[Huang Chung]

HC,
Arrow would have the best management team going. Just a matter of time before BG throw their bid in. Imho this is history repeating itself. $7 plus.

You're more confident of a rival bid that I would be, Super B....

[The Big Ease]

HC,
Arrow would have the best management team going. Just a matter of time before BG throw their bid in. Imho this is history repeating itself. $7 plus.
I would agree with you here B.
I just cant see the competition letting AOE go at such a bargain.
Whether they put a bid in remains to be seen, but you would expect them to.

[Ketel One]

~5.4TCF of 2P is around 900mmboe. @$50 / boe that's around $45Billion USD.

That's not how CSG is usually valued. But it does show that there's certainly plenty of room for other bidders to make a higher offer to secure the scarce resource Arrow holds.

From reading the Ann.'s today, I can see why management like this deal. They get to cash up their seriously large holdings, and get to play the game all over again with Dart (both through Apollo and the international assets). On the other hand, i'm not sure they're really maximising other shareholder's value. AOE's current gas is worth more than the $4.70, and the company could be worth a whole lot more if it stayed independent.

[STRAT]

I have a question fellas. If this is a rude offer why has BOW come out and publicly supported the offer?

[bermuda]

I have a question fellas. If this is a rude offer why has BOW come out and publicly supported the offer?

Hi Strat,
BOW have reported the offer as Arrow own 1.4% of BOW. Please advise where you read that they have supported the offer. Thanks.

[Paddie]

I have a question fellas. If this is a rude offer why has BOW come out and publicly supported the offer?

Hi Strat,

I wasn't aware that BOW had supported the offer.

Would you mind posting a link?

Thanks
Paddie

[Huang Chung]

So why is Arrow's switched on management letting go for 'such a bargain'.

Can only be one of three things:

- They have made a mistake in valuing the worth of AOE to a bidder
- Self interest
- They have correctly assessed the current value of AOE, given they are a small player in a game rapidly being dominated by the big boys

[bermuda]

So why is Arrow's switched on management letting go for 'such a bargain'.

Can only be one of three things:

- They have made a mistake in valuing the worth of AOE to a bidder
- Self interest
- They have correctly assessed the current value of AOE, given they are a small player in a game rapidly being dominated by the big boys

There can only be one reason that they accepted this bid. And that is to attract a higher bidder to give them more ca$h to get on with developing their new international baby Dart.

[Huang Chung]

Problem with doing that is that you will likely only get a small premium over the current bid....why pay $7 if management says they'll take $4.70 (excl international ops)?

[drillfix]

Problem with doing that is that you will likely only get a small premium over the current bid....why pay $7 if management says they'll take $4.70 (excl international ops)?

Very good question HC.

And also the media reporting on Lateline Business with the guy from Shell talking about how Arrow drives a hard bargain, to make the current deal sound like its sweet.

What a load of crock, big biz doing a play over on the small guy, (as usual) imo

I see the sp hanging around $5 bucks now, guess that will be a potential premium target should the next mob bid in, dont ya think?

[Ish]

The market is pricing a share in dart at approx $35c ($5.05 - $4.70).

This would indicate the market currently thinks its a done deal and that a better bid wont eventuate

[macduffy]

The market is pricing a share in dart at approx $35c ($5.05 - $4.70).

This would indicate the market currently thinks its a done deal and that a better bid wont eventuate

Unhappily, I agree that seems to be the case. Normally I'd be all in favour of " the last offer is always the best offer" but in this case I think we've seen the "last offer".

I think also that HC was right in his 3rd option - that AOE management realise that gas isn't all that scarce at the rate that various companies are proving it up and that AOE risks being left out in the cold by the bigger boys. Also a touch of self-interest perhaps in that the AOE executives will receive v big payouts from their substantial holdings and remain on with Dart with a chance of repeating their success on a bigger stage.

I'm aware that Bermuda doesn't share those views - and I respect his knowledge and judgement in this area - but that's how I see it. As for BG having a go I wonder if their involvment via QGC might weigh against them on competitive grounds. It seems that Shell have played a clever hand in involving a key customer, PetroChina, as part of their proposal. Perhaps BG might turn their attention to one of the smaller players such as BOW or ESG. I hold BOW and will divert part of my AOE proceeds to a small stake in ESG.

[Huang Chung]

I might be wrong here, but doesn't Shell already jointly control most of AOE tenements anyway?

Assuming I'm right with this, wouldn't this be a significant turn-off to another multi-national wanting to control its own agenda?

[STRAT]

Hi Strat,
BOW have reported the offer as Arrow own 1.4% of BOW. Please advise where you read that they have supported the offer. Thanks.Hi Bermuda and Paddie.

You are right of course Arrow Recommends Acquisition By Shell / PetroChina (https://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=2470314)

My bad. :blush::blush: Sorry fellas. Was not intended as a wind up

[macduffy]

I might be wrong here, but doesn't Shell already jointly control most of AOE tenements anyway?

Assuming I'm right with this, wouldn't this be a significant turn-off to another multi-national wanting to control its own agenda?

Only to the extent of 30% for AOE's Australian tenements. That leaves a big 70% floating "free".

The international interests are a bit more complicated. Shell have certain JV rights there so if they are giving them up in the offer for AOE that will have a certain (uncertain?) value to AOE shareholders..

[MrDevine]

Stranger things have happened in these takeover 'battles'. Thing is we don't really know whats going to happen. The opportunity I see is the new company being spun out of AOE. I'll be looking at getting involved in that.

What we all must realise in the CSG game, is that requires MEGA bucks to develop these projects. Unless you want to be severely diluted, there is no option other than to take an offer when it comes. Shell needs a 'discount' for the risk its taking to develop the tenements. 30% ownership of tenements could be a 'poison pill' for other bidders. Why would shell give that up? I see NHC has accepted offer in lieu of superior one.

I see this will have short term implications for BOW, ESG et al as their SP and reserves will now be benchmarked on this deal.

Lets see what happens!

[Paddie]

Stranger things have happened in these takeover 'battles'. Thing is we don't really know whats going to happen. The opportunity I see is the new company being spun out of AOE. I'll be looking at getting involved in that.

What we all must realise in the CSG game, is that requires MEGA bucks to develop these projects. Unless you want to be severely diluted, there is no option other than to take an offer when it comes. Shell needs a 'discount' for the risk its taking to develop the tenements. 30% ownership of tenements could be a 'poison pill' for other bidders. Why would shell give that up? I see NHC has accepted offer in lieu of superior one.

I see this will have short term implications for BOW, ESG et al as their SP and reserves will now be benchmarked on this deal.

Lets see what happens!



There is also talk about BHP getting in to CSG.

Not a bad entry if they were serious to have a go at AOE.

More to be played out yet in this IMHO.

If nothing else a few hands will be showed in the next few months.


Paddie

[macduffy]

The opportunity I see is the new company being spun out of AOE. I'll be looking at getting involved in that.



At $4.99 the market is valuing shares in the new company (Dart) at 29c, assuming that the takeover goes ahead.

Until recently, the consensus seems to be that the international business was worth more than that, and with Shell having certain JV rights which they now intend to give up.

Given that the Shell offer, or something better, looks highly likely, that's not bad value IMO.

[macduffy]

Stephen Bartholomeusz seems to think so, too!

http://www.businessspectator.com.au/bs.nsf/Article/Arrow-Energy-Shell-PetroChina-LNG-coal-seam-gas-pd20100322-3S32L?OpenDocument&src=kgb

[The Big Ease]

There is also talk about BHP getting in to CSG.

Not a bad entry if they were serious to have a go at AOE.

More to be played out yet in this IMHO.

If nothing else a few hands will be showed in the next few months.


Paddie
I suspect we will see another bid.
I am also very interested to see if Mallesons "conflict" is due to their preference of working with a bigger client than AOE with respect to this transaction.

Mallesons are doing some work for someone more important than AOE. Who could that be? It wasn't Shell as Mallesons would have been unlikely to have developed that conflict to begin with. BG, BHP, Origin perhaps?

There is more to come IMO. Sad for AOE holders if they get taken out at such a low price.
Has there been an uncontested transaction in qld csg of such significance?

Origin had lots of wriggling to do.
SHG perhaps to QGC, but still paid industry average per Gj.
PES was heavily contested
Even tiny RPM was contested between BOW and QGC.

[macduffy]

Meanwhile, the Opposition finance spokesman seeks to make political capital out of the situation.

http://www.theaustralian.com.au/business/barnaby-joyce-questions-arrow-energy-bid/story-e6frg8zx-1225844486077

[macduffy]

The Arrow story reached its happy ending today with receipt of Shell's cheque for $4.70 per share!

But not quite the end as we also receive shares in Arrow's offshoot, Dart, and the opportunity for another ride on the csg train.

[pedro.nz]

mmm, will be interesting to see how Dart goes over the next couple of years. I am going to keep my Dart shares for the long haul, and maybe buy some more as well, but not at the moment. I think the price will drop off once things settle down and those that got their cheques over the last few days have stopped re-investing their funds.
I was disappointed that they were taken over, as I was of the opinion that they would have done very well over the next few years with the huge acreage they had in Australia and the Fishermans Landing project up and running.

I guess we should start a DTE thread

[macduffy]

Hi, pedro.

I was reasonably happy with the outcome, having bought into AOE for a bit less than a dollar.

The csg story was always going to be one for the big boys given the cost of the csg to lng plants; a technology which is not yet commercially operational; competition between up to four proposed plants in Queensland. Even a big company such as Santos is yet to tie up its finance and find buyers for its future lng, although signs are promising.

For the smaller companies such as Arrow, Bow - which I also hold - and Dart, the plan is to prove up gas quickly and sell it, or themselves, to a bigger player before those companies find their supplies elsewhere. At least, that's how I see it.