By James Paton March 16 (Bloomberg) — Arrow Energy Ltd. is continuing “active discussions” with Royal Dutch Shell Plc and PetroChina Co. over their proposal to buy the Australian coal-seam gas producer for A$3.3 billion ($3 billion). Arrow has also extended a preliminary agreement to buy the entire Fisherman’s Landing liquefied natural gas project in Queensland state until June 30, it said in a statement to the Australian stock exchange today. Shell and PetroChina offered A$4.45 a share in cash for Arrow’s Australian coal-seam gas business, the Brisbane-based company said on March 8. Shareholders would also get stock in a new company comprising its international assets, Arrow said. Arrow shares traded at A$5.20 in Sydney trading, down 1 percent, at 10:28 a.m. local time, compared with a gain of 0.3 percent for the benchmark S&P/ASX 200 Index. The Arrow bid is too low based on prices paid in previous coal-seam gas deals, including BG Group Plc’s 2008 acquisition of Queensland Gas Co., some analysts said last week. Shell and PetroChina would need to offer a figure in the high A$5 range to succeed, John Young, an analyst at Wilson HTM Investment Group in Melbourne, said last week. The bid values Arrow’s proven and probable reserves at 88 Australian cents a gigajoule, compared with about A$2 a gigajoule for BG’s acquisition, Nik Burns , an analyst at RBS Morgans in Melbourne, said last week. To contact the reporter on this story: James Paton in Sydney jpaton4@bloomberg.net .
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Arrow Continues `Active’ Talks With Shell, PetroChina on Acquisition Plan
