Arrow Energy signs PSC with PetroVietnam

The Directors of Arrow Energy Ltd declares that Arrow Global CBM Ltd (Arrow) signed a major Production Sharing Contract (PSC) with PetroVietnam in Hanoi.

The PSC, known as the Hanoi Trough (MVHN-01KT) Onshore PSC, gives Arrow title to a highly prospective Coal Seam Gas (CSG) tenement area of 2,743 sq km in the Hanoi Basin. The tenement, at its nearest point, is only 100 km from the City of Hanoi and is adjacent to the Thai Binh industrial area.

Under the terms of the PSC Arrow will receive a 70% interest in the block and PetroVietnam Exploration and Production (PVEP), a subsidiary of Vietnamese Government owned PetroVietnam, will receive 30%. Arrow is also considering bringing an additional local partner into the block.

The PSC requires Arrow to spend US$1.5M over a period of 12 months to drill 8 wells on the block. At that point Arrow can choose to proceed to an appraisal program at its own discretion. It is anticipated that exploration drilling will begin later this year.

Arrow believes the PSC to be a technically and commercially attractive proposition. Thick coal occurs in the Miocene age Tien Hung Formation. There are multiple coal seams with combined thickness of over 20m, which occur at depths between 450m and 800m over anticlinal structures within the PSC. The Vietnamese Department of Mines and Geology has estimated very large resources of coal within the Hanoi Basin.