Sydney: Arrow Energy Soars on A$3.3 Billion Bid

Darlington Musarurwa
08 Mar, 2010
New York City

Arrow Energy Limited received A$3.3 billion joint bid from Royal Dutch and PetroChina Corp. The coal seam gas explorer soared 47% on the bid. BHP Billiton signs new coking coal contract with JFE Holdings of Japan that tracks spot market prices and is only for a quarter compared to annual increase.

[R]3:00 AM New York, 7:00 PM Sydney – Arrow Energy Limited received A$3.3 billion joint bid from Royal Dutch and PetroChina Corp. The coal seam gas explorer soared 47% on the bid. BHP Billiton signs new coking coal contract with JFE Holdings of Japan that tracks spot market prices and is only for a quarter compared to annual price increases.[/R]

Australian stock index rose 0.9% after Arrow Energy Ltd received a bid worth A$3.3 billion from a company jointly owned by Royal Dutch Shell and PetroChina Corp.

In Sydney trading ASX 200 Index rose 0.9% or 40.7 to 4,807.90.

Of the ASX 200 index stocks, 90 gained, 54 fell, and 18 were unchanged. Arrow Energy Ltd. led gainers in the index shares with a surge of 46.8% after the company announced that it has received a bid worth A$3.3 billion.

Commodity stocks gained as gold prices edged up 0.4% to $1,137 per ounce and crude oil increased 0.6% to $82 per barrel. Mount Gibson Iron climbed 6.2% to A$1.80 and Murchison Metals advanced 5.9% to A$2.70.

The Australian dollar advanced 0.4% to 91.07 U.S. cents.

BHP Signs New Coking Coal Export Contract

The Australian reported today that BHP Billiton on Friday struck a deal with Japan based JFE Holdings to supply “unknown amount” of coking coal at the price of $200 per ton. BHP was seeking the price as high as $240 a ton.

The price is 55% more that the 2009 contract price of $129 per ton but the contract is only for a quarter ending in June compared to previous annual contracts.

It is the first time that the Japanese steelmaker has been willing to depart from the annual contract system, to one that more closely tracks the spot market rate.

BHP noted that it has agreed terms for “a large portion” of its hard coking coal sales for 2010 with a range of international customers in Europe, China, India and Japan.

Arrow Energy Receives a A$3.3 billion Bid

Arrow Energy reported today that it has received a non-binding indicative and conditional proposal from a company jointly owned by Royal Dutch Shell and PetroChina.

Under the proposal, Arrow shareholders will receive consideration of $4.45 cash per share plus a share in a new entity comprised of Arrow’s international business.

Arrow has previously announced its intention to conduct an Initial Public Offering 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,” said the company in a statement.

ASX Movers

Emeco Holdings Limited led the decliners in the S&P ASX 200 index with a loss of 2.9% followed by losses in iSOFT Group Limited of 2.7%, in OM Holdings Limited of 2.2%, in Insurance Australia Group Limited 1.9% and in CSR Limited 1.7%.

Arrow Energy Limited led gainers in the S&P ASX 200 index with a rise of 46.6% followed by gains in Eastern Star Gas Limited 12.5%, in Gindalbie Metals Ltd of 8.0% and in Energy Resources of Australia Limited of 6.9%.

Other Movers

Arrow Energy Limited surged 46.8% to A$5.11 after the largest coal-seam gas area explorer in Queensland state received a bid that valued the company at A$3.3 billion.

BHP Billiton plc added 2.3% to A$43.51 after the mining company fixed 55% price increase for coking coal prices.

Eastern Star Gas Limited surged 12.5% to A$0.81 and Linc Energy Ltd rose 3.5% to A$1.59.

Rio Tinto Limited the miner increased 2.5% to A$76.94 and Santos Ltd the exploration climbed 2.9% to A$13.83.

Woodside Petroleum Ltd the oil and gas producer advanced 1.6% to A$45.25.