By 2010, it plans to generate 45PJ per annum and be Australia’s most profitable and productive coalbed methane producer, chairman William Stubbs told shareholders.

“Our progress to date has us well on the way to meeting that vision and we can look forward to the coming year with considerable optimism,” Stubbs said.

He said 2006 would mark Arrow’s full transition from explorer to producer, as it delivers first gas sales from the Kogan North field and starts development of its Daandine and Tipton West fields in the coming months.

“The Kogan North field has recently completed pre-commissioning of its facilities following an on-time and on-budget construction phase,” Stubbs said.

“As we progress our development activity we plan to bring a further two fields, Daandine and Tipton West, on stream during calendar 2006.”

Arrow is counting on “many more years of continued growth,” due to increasing customer acceptance of the company and CBM, and eight other projects in the pipeline, Stubbs said.

But he warned that future challenges would be balancing the market’s needs and supply potential with revenues, capital allocation and development.

The Kogan North project development was mostly funded by Arrow’s joint venture partner, CS Energy, while Australian Pipeline Trust paid for the gas processing and compression facilities.

Stubbs said the company had made significant progress in raising capital for two other projects, after Beach Petroleum paid $35 million to farm-in to Tipton West and the $27 million funding arrangement with Alinta to build, own and operate the power station component of the Daandine project.

The company also raised $17.5 million in equity capital through a placement and entitlement issue to existing shareholders.

During the year, Arrow also secured gas sales agreements with CS Energy, Braemar Power, and Ergon Energy and a power purchase agreement with Country Energy.

“This has been a year when CBM has finally gained recognition from investors and customers,” Stubbs said.

“Transparent, market-based values have been established through corporate transactions and the number of fields and companies delivering CBM into the market has continued to increase.”