Gas producer Arrow Energy Ltd
(ASX:AOE) has acquired a major stake in a highly prospective coal seam gas block in China.
Arrow’s subsidiary Arrow Energy International has signed an agreement with Fortune Oil subsidiary, Fortune Green Energy to acquire a 35 per cent stake in Fortune Luilin Gas, whose sole asset is a 50% participating interest in the Luilin Coal Bed Methane block which is one of the most advanced coal bed methane prospects in China.
The company will pay US$13.3 million for the sake with US$6 million of these funds being committed to the 2010 work program which includes the drilling of horizontal pilot wells.
Arrow has conditional options to increase its stake to 75 per cent over time.
CEO Nick Davies says the transaction is a significant step forward for Arrow International in China.
Arrow Energy posted profit after tax of $366.85 million for fiscal 2009.
