MORANBAH PROJECT

LOCATION
The MGP is located in the Bowen Basin, approximately 400km south of Townsville and 170km west of Mackay.

EQUITY
The MGP is operated by Arrow in a 50/50 joint venture with AGL Energy Ltd.

FIRST GAS

First gas was sold from the field to Enertrade in September 2004.

GAS CONTRACTS
Arrow Energy and AGL acquired the merchant gas and pipeline businesses of Enertrade from the Queensland Government in November 2007. The joint venture now has gas supply agreements with Queensland Nickel Industries for up to 6 PJ per year, and Copper Refineries for up to 0.25 PJ per year.

The balance of production is fed to the Yabulu Power Station in Townsville. Arrow and AGL share the right to dispatch the electricty generated from the 230MW power station under a long term agreement with Transfield Services.  

GAS PRODUCTION

The Moranbah Gas Project (MGP) is currently the sole supplier of natural gas into the Townsville market. The MGP is one of the the largest operating coal seam gas projects in Australia with current annual production capacity over 16 PJ per annum. The MGP has significant potential to supply the expanding Gladstone market in the future.

Gas from the Moranbah North Mine Degassing Project is currently being sold into the MGP. The daily rate being contributed from these wells is close to 3 TJ/day.

RESERVES

In 2006, independent reserve certifiers Netherland, Sewell & Associates, Inc. of the USA confirmed a gross reserves base at the MGP with the certification resulting in IP, 2P and 3P gross reserves of 118 PJ, 380 PJ 1336 PJ respectively.

PRINCIPAL EXPLORATION TARGETS
Additionally, at least one well will target a test of the Fort Cooper Coal Measures (“FCCM”). Typically the FCCM exhibits net coal thicknesses of up to 50 metres and there have been previously measured high gas contents. The FCCM seams are laterally extensive across the Moranbah area but their possible resource has not previously been included in Moranbah area resource assessments. If proven to be productive, these seams could add multiple TCFs of contingent resource that is as yet uncertified in the FCCM.