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Barrios

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Listened to the broadcast just now on the AOE website and there is a lengthy pause when an analyst from DB asked if AOE had held discussions with other interested parties prior to the annoucement today..

 

worth listening to that little moment in time and the response..26 minutes in

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IMHO I think today is purely a knee jerk reaction to what appears to be an offer that undervalues the company. I think as the acquisition unfolds we will begin to see what Dart is actually worth, and I believe ND and the management are fully aware of its potential. Due to the lack of information and concrete valuations, Darts value and full potential is not easily seen today, and I think this is creating a tendency to focus on the cash value of the offer, and overlooking the value/potential of Dart somewhat. It is a fantastic achievement for a management team to grow a company so consistently and rapidly as has been done with AOE. They have a very strong track record, and this shouldn't be overlooked when evaluating the potential of Dart, it certainly provides me with tremendous confidence in their capabilities in 1) understanding Darts potential and 2) executing in a similarly successful fashion to AOE. Finally reading the announcement, and although I am no expert, I get the feeling the way the demerger is being structured that the management team is adding substantial value potential to Dart.

 

I hold Arrow.

 

Cheers

H

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HDW

 

The problem is we already owned 90% of AOEI and they are not promising to load it up with cash. All the deal acheived was to remove a back in clause shell had..That is all we are getting on top of the $4.70..

AOEI is just another csg explorer with a high rate of cash burn. China has not been an easy play over the last 5 years for many in the csg business and I don't see why AOE will be suddenly kicking goals. And Shell are going to give them a 2 year loan ..gee some sweetener.

 

Meanwhile the offer this board have recommeded is clearly bottom dollar in terms of valuing AOE's qld assets against previous deals such as QGC. I don't care what kind of capital gain shareholders have made, it should be about realising the real value of the Qld business and when you factor in the generation assets, Shell are paying stuff all for all that gas. There is just no justification for selling shareholders short.

 

It really does underline how smart ORG were it stiching up the deal they did with Conoco, light years ahead of this deal even allowing for the gas market outlook.

 

Shell haven't as yet confirmed what percentage Petrochina will hold ..I hope its alot and the FIRB blocks it.

 

 

 

 

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Thank goodness there is sufficient time for BG to make an offer. However, Arrow will need PetroChina's help to get their permits in China. A key part of AOEI's international strategy. A takeover by BG would slow AOEI's Chinese ambitions.

 

I wonder when BG will put their bid in the ring?

 

 

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22 March 2010, Brisbane

 

Shell Energy Holdings Australia Ltd. (Shell), a subsidiary of Royal Dutch Shell plc, and PetroChina International Investment Company Ltd (PetroChina), a subsidiary of PetroChina Company Limited, welcome the announcement by the Board of Arrow Energy Limited (Arrow) to unanimously recommend its shareholders vote in favour of the joint proposal to acquire 100% of Arrow shares1.

 

1 The Board of Arrow support the proposed transaction in the absence of a superior proposal and upon the completion of an independent expertÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s report concluding the proposal is in the best interests of Arrow shareholders.

 

CS CSG (Australia) Pty Ltd, the 50/50 joint venture company owned by Shell and a subsidiary of PetroChina, has entered into an agreement with Arrow for the proposed acquisition under which it has agreed to pay A$4.70 cash per share for all of the shares in Arrow, representing a total consideration of A$3.5 billion. This allows Arrow shareholders to crystallise the value of the Queensland Coal Seam Gas (CSG) assets and realise a significant premium for their shares.

 

The offer is subject to customary conditions including regulatory approvals and Arrow shareholder approval.

 

Arrow has also announced its intention to make a pro-rata share distribution to its shareholders relating to the international assets and certain other interests. This enables ArrowÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s shareholders to retain exposure to, and benefit from, any potential future growth in those holdings.

 

On successful completion of the acquisition, the joint venture would own ArrowÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s Queensland CSG assets and domestic power business as well as ShellÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s Queensland CSG assets and its site for a proposed liquefied natural gas (LNG) plant on Curtis Island at Gladstone.

 

Shell and PetroChina bring technical capabilities, capital backing, major project experience and LNG marketing ability which will facilitate the growth of QueenslandÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s CSG and LNG industry, and help to further develop AustraliaÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s LNG sector.

 

ShellÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s Chairman in Australia, Russell Caplan, said "The proposal is good for jobs, good for Queensland and good for the long-term future of the CSG industry in Australia. In addition to the quality of its assets, both Shell and PetroChina are attracted to the quality of ArrowÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s employees, all of whom should be proud of the role they have played in building this great company."

 

Mr Qiliang Bo, Vice President of PetroChina Company Limited, said "The CSG to LNG project to be developed by the joint venture is an extremely exciting project and ShellÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s and PetroChinaÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s technical and financial capabilities will underpin the next phase of this significant development."

 

Mr Malcolm Brinded, Royal Dutch ShellÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s Executive Director of Upstream International, said "This transaction combines ShellÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s global LNG expertise, PetroChinaÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s operational experience, and our access to regional gas markets. The new joint venture will be an important growth asset for Shell, and help meet growing demand for cleaner energy in Australia and international markets. We expect to take the final investment decision on this large LNG project by 2012."

 

Mrs Aiji Ge, PetroChinaÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s Project Manager, said "The proposal would create jobs and generate additional economic activity for Queensland through the export of 7 to 8 mtpa of LNG from the proposed Curtis Island LNG plant. PetroChina sees this joint venture as a significant commitment to building an integrated CSG and LNG business while continuing to supply domestic gas in Queensland."

 

Arrow is expected to hold a shareholder meeting mid July 2010 to allow shareholders to vote on the offer.

 

Contacts:

 

CS CSG (Australia) Pty Ltd: Jim Kelly, FD Third Person +61 412 549 083

 

Shell Australia: Phil Connole +61 417 063 605

 

PetroChina: Xinxiang Yuan +86 10 5998 6037

 

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Barra,

 

I totally agree and no one is more disappointed in the cash price than me, I think there has been some considerable manipulation and maneuvering over the past few months in the lead up to this bid, you'll notice that the bid price was based on the moving average of the months trading prior to the offer on the 8th of March, just so happens that months average price was the lowest average AOE has had in the last 8 months, im no conspiracy theorist but with the trading activity and negative press leading up to the bid it just seems all too convenient for me to swallow.

 

I understand that we owned 90% of AOEI, and living in Oman I certainly understand the benefits of doing business in developed and politically stable nations like Australia, but my question is, have we really had an accurate view of what the Dart business is worth to date? I think the managements track record has been exemplary, which counts for a lot in my books. What doesnt make sense to me is that they would sell out, to what at face value, is obviously an undervalued price, particularly after rejecting a not so dissimilar bid last year, although having considerably strengthened the position of the company in the meantime. I would hazard a guess that the AOE management team know the value of AOE/Dart better than anyone, and I think this question of why the bid price seems low against precedents set in the market over the last couple of years will be answered when we get further visibility into the Dart business, and what value/potential it has.

 

I could be wrong, and most probably am :), but IMO we will learn more about Dart in the coming months and see that AOE management haven't sold out under this deal.

 

Cheers

H

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I agree HD- management looked after us with the Bow and pure spinoffs and when they brought Simon Potter on board to head up "Dart" there was a plan already in the pipeline ready for when the t/o came along. Hopefully this will provoke another bid for which the ground rules have now been set, including cashing up and loan facility for the new Co.

The for-sale sign is out front.

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Yep no doubt they will put some gloss on Dart Energy between now and August if no other offer is received.

 

Bermuda < i like the optimism in BG having a swing..but I wonder what the competition watchdog would say about it?

 

Has anyone heard the broker podcast yet? At 26 mimutes into it, they had a little outtage before answering a simple enough question about whether there had been any discussions with other parties. A moment earlier ND had said no comment to a similar question and then a minute later I think it is Bizell confirmed that discussions were held with other parties ....

 

By coincidence this is what a fly on the wall heard going on in a conference room next door.

 

"S%%%t ..What do you want me to say ?'

 

'Tell them 'no comment'

 

" If we say that twice in two minutes it sounds like we are dodging the question."

 

"We are dodging the question?"

 

" Shhhhh..that button better be on mute...All right , all right, no panic Steve give them the one two"

 

"The one two?"

 

"Yes.. the one two..you know like you couldn't care less and make sure its ambiguous"

 

'Right'

 

click....

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HD: Surely something is only worth what a willing buyer is prepared to buy---still don't understand the negativity to the price acheived--aren't most sitting on excellent trading profits??? Plus another bite at the cherry--what more does anybody want? Who knows--the resultant IPO may start trading at $1 and presume Dart holders today will rank as fully paid and therefore suffer no IPO escrow--lucky lot!

 

Anyway--isnt it all done and dusted by the major holders--regardless?

------------------------------------------------------------------------------------------------------------------

 

Dart Energy (ex Reuters)

 

Arrow investors will receive one share in the new company called Dart Energy Ltd. for each Arrow share they hold. Dart, which will listed on the Australian stock exchange, is evaluating opportunities in Europe and Southern Africa, to add to its Asian assets, Arrow said.

 

Arrow's international business is worth about A$400 million, or 55 Australian cents a share, according to Nik Burns, a Melbourne-based analyst for RBS Morgans.

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