EXPLORATION PROGRAM

Arrow Energy is focused on Coal Seam Gas (CSG) exploration and production in the Surat, Clarence-Moreton and Ipswich Basins in southeast Queensland and Northern New South Wales and the Styx Basin and Nagoorin Graben in coastal central Queensland.

Arrow has an enormous acreage portfolio with low holding costs. Most of the acreage is held 100% by Arrow.

The majority of Arrow wells to date have been drilled in the Surat Basin – near to the towns of Dalby and Chinchilla. The Walloon Coal Measures section in this area is productive and a number of substantial accumulations have already been identified. In particular Arrow’s Tipton West field contains over 2 TCF of gas, enough to meet Queensland’s forecast demand for the next 15 years.

In addition, Arrow holds the entire prospective Central Queensland coastal Tertiary oil shales basins play that have potential for new gas discoveries close to the rapidly expanding Gladstone power and industrial markets. Recently drilled wells, at Boyne River, encountered numerous coal seams and promising flow rates.

In the Clarence-Moreton Basin of Queensland and northern New South Wales, Arrow has recently had four exciting discovery wells. All of these have significant supply potential and are within easy reach of the Brisbane market (50-60km), the Gold Coast (20-30km) and the Swanbank Power Station (30-50km).