Shell, PetroChina owned Arrow Energy bids $543 million for Bow Energy

Arrow Energy, a venture between Royal Dutch Shell and PetroChina, has made an A$520-million ($543 million) bid for Australian gas explorer Bow Energy.

Brisbane-based Bow today said that it has received a A$1.48-a-share initial cash offer from Arrow Energy, valuing the company at $520 million, and recommended shareholders to take no action.

The offer represents a premium of 67-per cent to Bow's closing price of 88.5 cents on 10 August.

Shell and PetroChina had jointly acquired Arrow Energy last year for A$3.4 billion, which gave it a 1.4-per cent stake in Bow through its spin-off Dart Energy.

Andrew Faulkner, Arrow's chief executive, said the proposed acquisition made sense given the companies hold adjacent coal seam gas (CSG) assets. "Any future business arrangement would strengthen the opportunity for Arrow to increase the size of its first two liquefied natural gas trains on Curtis Island from the currently proposed 4.0 million tonnes per annum," he said.

Arrow Energy, which has a tie-up with Tata Power for developing the Satpura coal bed methane block in Madhya Pradesh, is a coal seam gas explorer and producer having around 70,000 petajoules of gas or more than 12 billion barrels of oil within its portfolio of exploration tenements that cover more than 65,000sqkm. across Queensland and northern New South Wales.