Brisbane, Jan 16, 2008 (ABN Newswire) - The Directors of Arrow Energy Ltd (Arrow)(ASX: AOE) are pleased to announce a substantial reserves upgrade of the Tipton West (Tipton) Field (Arrow 60%, Beach Petroleum 40%) as part of an ongoing multi-field certification program in the Surat Basin. Other Surat reserves increases are expected in the coming months.
At the Tipton Field 1P reserves have increased by 560% and 2P reserves by 68%. The new levels are as follows:
-------------------------------------------------------------
Tipton Reserves Previous Tipton Arrow Net Total Arrow
Revised Jan 2008 Reserves June Tipton Net Reserves
Jan 2008 June 2006 Jan 2008 Jan 2008
PJ PJ PJ PJ
-------------------------------------------------------------
1P 167 25 100 171
2P 293 174 176 791
3P 2316 2265 1390 2790
-------------------------------------------------------------
The reserves upgrade is predominately as a result of development drilling and continued strong production trends in the field.
Overall, production from Arrow's Surat basin projects continues to increase with the current gross field production rates from Arrow operated fields of 38 mmcfd and Arrow net sales of approximately 23 TJ/D. Combined Surat production levels have increased by a further 10% in the last two months. This performance will, in turn, lead to further reserve upgrades.
The Tipton reserves upgrade also include Tarooms coal seam reserves in the 2P category for the first time. The Tipton JV is in the early stages of two pilots in the Tarooms. The two Tarooms pilots are extremely encouraging and are currently producing a total of nearly 2 mmcfd with the rate continuing to increase. These Tarooms certifications provide further confidence that reserves will be added from on-going Tarooms work on Kogan and Daandine. Certification of Tarooms reserves are of particular value as development of the Tarooms will require significantly reduced investment through sharing of infrastructure with existing, co-located Juandah seams wells.
Commenting on the continuing reserves and production growth in the Surat, Arrow Chief Executive Nick Davies said "All of our Surat fields are now approaching or surpassing field production expectations. We now have wells producing more than 1mmcfd in both Kogan and Tipton fields with continued positive trends. We have always believed the wider spaced wells we are using in the Surat would lead to a gradual build up to a sustainable production level for optimal investment.
As we step out from the initial development areas we continue to expand our reserves base and refine our well completion techniques."
"The early success of the Tarooms pilots is particularly exciting as it will allow maintenance well drill and expansion of the existing fields to occur at significantly reduced capital cost by using the existing gas gathering and water handling infrastructure and well site equipment" added Mr Davies.
Reserves certification work for Daandine and the areas between the Tipton and Daandine Field and for the Meenawarra area to the south of Tipton is also currently underway. Reserves exploration and appraisal and Moranbah Gas Project reserves recertification work are also underway in the Bowen Basin.
