Shares of NiSource, Inc. (NYSE:NI) booked a new 52 week high today by trading above $17.16, traders are definitely monitoring NiSource’s price action to see if this move attracts further buying into the stock.

NiSource Inc. (NYSE:NI), an energy holding company, thorugh its subsidiaries provide natural gas, electricity and other products and services to customers located within a corridor that runs from the Gulf Coast through the Midwest to New England.

NiSource is currently trading 1.81% versus its previous trading session close, and it has calculated support and resistance at $14.19 and $17.15 respectively. Clearly with this action this range has been penetrated, and traders will be reviewing price action to establish a new tradable range

The overall market index S&P 500 is trading higher by 1.27% from its previous trading close, which means that NiSource stock is outperforming the overall market.

SAN FRANCISCO (MarketWatch) – Crude-oil futures rose Friday, tracking narrow gains in U.S. stocks and buoyed by growth in wholesales inventories that met expectations.

Crude for August delivery added 69 cents to $76.15 a barrel on the New York Mercantile Exchange.

The crude contract fluctuated in early floor trading but gathered steam as U.S. stocks built modest buying momentum. Technology stocks propped up the main equity indexes. Read more about stocks.

Stocks are oil’s “latest hangout buddies,” said Peter Beutel, president of trading advisory firm Cameron Hanover in Connecticut. Prices are likely to move in tandem with stocks in the absence of other news and supply data, he added.

“The assumption is if the stock market is higher, it implies increased economic activity” and therefore more demand for oil, Beutel said.

In the one bit of U.S. economic news out Friday, wholesale inventories rose in May as warehouses were restocked with durable goods, a government report showed. Wholesale sales dropped a little, but they were up 15% from May 2009.

“As long as we have the economy stable — not great, but stable — we are going to see higher oil prices,” said Carl Larry, president of Oil Outlooks and Opinions in Houston. “We know the commercial side of America is growing. … People are buying goods, and these goods have to be made, they have to be delivered, and people have to drive to buy them.”

Oil futures snapped a six-session losing streak early this week amid hopeful signs about the global economic recovery. Reports of boosted global oil demand and a surprisingly large decrease in stockpiles also lent support to prices earlier in the week.

On Wednesday, the Energy Information Administration revised its forecast, saying it underestimated oil consumption in 2009. The agency expects global oil demand to rise by 1.5 million barrels a day in 2010 and 2011.

And on Thursday, the EIA reported a decline of 5 million barrels in the nation’s crude inventories last week.

Meanwhile, natural gas for August delivery reversed higher, adding 4 cents, or 0.8%, to $4.44 per million British thermal units. August reformulated gasoline gained a penny to $2.06 a gallon.

But for the week, natural gas has lost 6% so far. Gasoline futures have gained 3.9% this week.

The dollar index (DXY 83.94, +0.11, +0.13%) , which compares the U.S. unit to a basket of six other currencies, added 0.1% to 83.93. A stronger dollar usually pressures commodities prices as it makes them more expensive to holders of other currencies, but the stock market gains cancelled out that dynamics for Friday.

The euro (CUR_EURUSD 1.2644, -0.0052, -0.4095%) was marginally lower after hitting a two-month high on Thursday.

Claudia Assis is a San Francisco-based reporter for MarketWatch.
Cynthia Lin is a MarketWatch reporter based in New York.

By KRISTINA PETERSON – U.S. stocks climbed as the energy sector rallied and strengthening home sales helped boost sentiment.

The Dow Jones Industrial Average rose 113 points, or 1.10%, to 10137, with all of its components in the black. Walt Disney led the measure’s gains, lifted by comments from Chief Executive Robert Iger who said at an investor conference that it’s too early to discount the ability of media companies to drive revenue from emerging new media platforms.

Hewlett-Packard rose 1.7% after the company received antitrust approval to acquire Palm. Palm, which isn’t a Dow component, edged up 0.5%.

The Dow’s other top gainers Wednesday included Alcoa, which climbed 0.7% and Caterpillar, which rose 1.1%. Both stocks fell Tuesday as investors worried about how the companies could be affected by China’s efforts to slow its growth and economic struggles in the euro zone.

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The Nasdaq Composite climbed 1.3%. The Standard & Poor’s 500-stock index rose 1.3%, with all its sectors in the black, led by the energy and materials sectors. The energy sector’s gains came as crude-oil futures rose above $73 a barrel.

American depositary shares of BP rebounded 3%, erasing part of its Tuesday tumble, which had come as the U.S. Justice Department opened a criminal investigation into the oil spill in the Gulf of Mexico. Among other energy stocks that bounced back from Tuesday’s sharp declines, Halliburton jumped 9%, Smith International rose 7.2% and Schlumberger rose 6.7%.

Investors said while the investigations cast a shadow on the companies in focus, other stocks may have fallen to attractive prices.

“There’s no doubt that the short-term prospects there are cloudy at best, but again there’s some particular sectors [within energy] that would be less affected,” said Jim Dunigan, managing executive of investments at PNC Wealth Management.

Other broad gains came as investors were encouraged by an increase in U.S. pending home sales in April. The result surpassed expectations as buyers signed contracts to collect a government tax credit.

Cautious investors hoped that Friday’s government jobs report would give the market more direction after several days of back-and-forth swings.

“There’s a lack of concensus on the sustainability of the recovery,” Mr. Dunigan said. “We’ll need some positive job numbers in June and we’ll need them in July and August as well. We’re a little bit in no-man’s land at the moment.”

The U.S. Dollar Index, reflecting the U.S. currency against a basket of six others, climbed 0.4% recently. However, other safe-haven assets—Treasurys and gold—were lower. The yield on the 10-year note edged up to 3.30%.

Markets Hub: Energy Sector in Spotlight
3:36
As the oil spill continues to dominate news, other energy companies besides BP are starting to feel market pressure. Dow Jones Newswires’s Paul Vigna, Stephen Wisnefski and Madeleine Lim discuss.

Overseas, Japanese Prime Minister Yukio Hatoyama said he will quit less than nine months after taking office, a change that could fray ties with the U.S. and frustrate other allies seeking greater cooperation and leadership from Tokyo. The Nikkei Stock Average closed 1.1% lower in Tokyo, and the dollar rose against the Japanese yen, following the sudden resignation.

The dollar also strengthened against the euro, which fell to $1.2204. Euro-zone banks placed a record €316.4 billion ($387.1 billion) in the European Central Bank’s ultra-safe overnight deposit facility, ECB data showed Wednesday.

Also in the euro zone, the Greek government announced long-delayed plans to privatize state-owned companies as part of its attempt to fix the country’s public finances and chip away at the public debt. Meanwhile, Germany and France continued to draw apart on regulatory changes Wednesday, when the German cabinet approved an extended ban on certain short-sales of securities.

In the U.S., the first of a series of employment reports was released Wednesday, with outplacement consultancy Challenger, Gray & Christmas saying major U.S. corporations cut 38,810 jobs in May, a 1.3% increase from the 38,326 in job cuts last month. Figures on private-sector employment are due Thursday and the government’s nonfarm payrolls report is set to be issued Friday.

Among companies in focus, Amgen jumped 8.8% after the drug maker received U.S. Food and Drug Administration approval for Prolia to treat osteoporosis in postmenopausal women. The approval comes almost two months earlier than expected.

Collective Brands fell 11%. The footwear retailer’s fiscal first-quarter profit rose 43% on higher margins and international sales growth, but same-store sales declined slightly. The company’s revenue also came in below Wall Street’s expectations.

Write to Kristina Peterson at kristina.peterson@dowjones.com

Halliburton said earnings fell to $206 million, or 23 cents a share, from $378 million, or 42 cents a share, in the year-ago period.

The oil service giant’s adjusted net income totaled 28 cents a share in the latest period.

Revenue rose to $3.8 billion from $3.7 billion.

Wall Street analysts expected earnings of 26 cents a share, according to a survey by FactSet Research.

Shares of Halliburton rose 0.3% to $31.73, despite weakness in the energy sector.

S&P Equity Research increased its price target for Halliburton to $35 a share from $33 and reiterated its hold rating on the stock.

“Results were led mainly by strong North America activity, which was helped by demand in unconventional plays,” S&P Equity said in a note to clients. “We think that Halliburton can generate better margins on the international front, where margins were lackluster in the first quarter, as we believe its strategy to maintain its cost base in several markets, while waiting for projects to start, will eventually bear fruit.”

Halliburton said natural-gas fundamentals in North America remain a risk to continued rig-count growth in the near-term.

“We believe a sustainable recovery will only occur with an increase in natural-gas demand,” the company said.

Consolidated operating income rose to $449 million from $428 million.

Halliburton said the recent devaluation of the Venezuelan Bolivar Fuerte resulted in a charge of $31 million, or 4 cents a share, and $10 million, or a penny a share, of additional income tax expense.

Halliburton said the Latin America region posted disappointing results, due to further deterioration of activity in Mexico.

“Tangible indications are that, barring any major economic disruption, the industry is likely to experience a steady resurgence in international activity in the second half of the year and into 2011,” the company said.

The company said it expects better margins in North America in the second quarter. Overseas, Halliburton officials said customers are more confident about starting up big projects now that oil prices are well above year-ago levels.

Halliburton officials also said they’re seeing strong demand in the U.S. from shale plays in the Bakken, Haynesville and Eagle Ford formations.

Halliburton also expects plenty of oil service business in Iraq, with more contract approvals expected by the summer.
Steve Gelsi is a reporter for MarketWatch in New York.

By Steve Gelsi – Energy stocks traded mixed Thursday as investors weighed another sector acquisition against lower expectations for natural-gas prices down the road.

The NYSE Arca Oil Index rose 0.1% to 1,130, as the benchmark again approached its 52-week high of 1,132 on higher oil prices.

The NYSE Arca Natural Gas Index dipped 0.1% to 566.

The Philadelphia Oil Service Index also fell, off 0.2% to 215.

Shares of Mariner Energy Inc. (ME) jumped 39% to $25.15 after independent oil and gas producer Apache Corp. (APA) said it would buy the exploration firm. Including assumed debt, the deal carries a price tag of about $4 billion.

Also in the spotlight, Seadrill Ltd. (SDRL) shares jumped 6% to $26.58 in their debut on the New York Stock Exchange. The operator of drill ships and offshore platforms has been trading on the Oslo exchange.

Shares of Valero Energy Corp. (VLO) fell 17 cents to $20.19. Credit Suisse initiated coverage of the refining giant with an outperform rating.

In the energy pits, crude-oil prices rose 19 cents to $86.03 a barrel.

S&P Equity Research on Thursday increased its 2010 price target for West Texas Intermediate crude by $4.11 to $83.19 a barrel, after reviewing forecasts from IHS, the Energy Information Administration and Bloomberg. And for 2011, S&P Equity now expects oil prices of about $86.10, up from its earlier view by $4.10 a barrel.

S&P also cut its target price for natural gas in 2010 by 9 cents to $4.04 per British thermal unit. Its 2011 target price was reduced by $2.36 to $3.93 per British thermal unit.

-By Steve Gelsi; 415-439-6400; AskNewswires@dowjones.com

Energtek Inc., a world leader in the development of Adsorbed Natural Gas (ANG) technology, reported advances towards the implementation of its proprietary CNG Lite(TM) and Low-Pressure Mobile Pipeline(TM) (LMP) technologies in the Philippines.

Significant advances in the Philippines have taken place towards the implementation of LMP technology, a mobile natural gas supply system for industrial energy consumers. Structural changes in the Filipino local natural gas market have been taking place during the past months, changes that will enable the distribution of natural gas to industrial users in the area of Metro Manila. In parallel, Energtek has maintained ongoing contacts for several months with potential customers interested in receiving mobile natural gas supply.

The recent completion of successful LMP field tests in Africa have further advanced discussions with these customers.

Advances have also taken place with Filipino parties that have expressed interest in the development of natural gas markets in the Philippines, using Energtek’s proprietary CNG Lite(TM) technology for the conversion and ongoing fuel supply of small vehicles.

Energtek’s fully owned subsidiary, Energtek Philippines Inc., was recently certified as a duly accredited participant in the Filipino Natural Gas Vehicle Program for Public Transport (NGVPPT). Accreditation entitles Energtek Philippines to convert and retrofit existing vehicles to operate on Natural Gas; as well as to provide ongoing Natural Gas supply to the vehicles from the Malampaya Offshore Gas Reserve in Batangas, the nation’s largest indigenous energy source.

The certification was preceded by extensive field trials of the company’s CNG Lite(TM) fuel system for small vehicles by government officials. Following the successful tricycle tests, Filipino investment groups have expressed interest in CNG Lite(TM) technology, and are studying their cooperation in the development of the natural gas market for three-wheelers.

Converting the vehicles to Natural Gas provides a substantial reduction in hazardous emissions and is cost-effective. CNG Lite(TM) is currently the only commercially viable system that can be utilized for mass conversions of tricycles in the Philippines.

“Energtek’s CNG Lite(TM) and LMP(TM) natural gas supply systems have demonstrated themselves to be effective in the field,” said Energtek CEO Lev Zaidenberg. “These systems are garnering the attention of several parties that seek to join in the opening of substantial natural gas markets in the Philippines, enabled by our bulk-transportation and CNG Lite(TM) technologies.”

About Energtek

Energtek develops and applies proprietary low-pressure storage technology to provide complete well-to-wheel pipeless Natural Gas supply solutions to industrial consumers and fleets of small vehicles. Energtek’s Natural Gas solutions reduce pollution and alleviate consumer energy costs. Energtek provides competitive bulk transportation solutions to industrial users and a profitable alternative motor fuel solution for 2- and 3-wheel vehicle drivers in Asia. Energtek operates subsidiaries in North America, Europe, Asia and the Middle East. To learn more about Energtek, visit http://www.energtek.com

Forward-Looking Statements

This release contains forward-looking statements. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of Energtek and its technologies. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions. In evaluating such statements, prospective investors should review carefully all risks and uncertainties, including those identified in this release and other matters set in material publicly released by Energtek. These risks and uncertainties could cause actual results to differ materially from those indicated in the forward-looking statements.

Contacts:
IR@energtek.com
+1(212)999-6202

WSJ – The Energy Department is preparing to make sweeping revisions to its U.S. natural-gas production data after finding it has been overstating output, raising new questions about the government’s collection of energy information.

The monthly gas-production data, known as the 914 report, is used by the industry and analysts as a guide for everything from making capital investments to predicting future natural-gas prices and stock recommendations.

But the Energy Information Administration, the statistical unit of the Energy Department, has uncovered a fundamental problem in the way it collects the data from producers across the country — it surveys only large producers and extrapolates its findings across the industry. That means it doesn’t reflect swings in production from hundreds of smaller producers.

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The EIA plans to change its methodology this month, resulting in “significant” downward revisions in some areas, according to Gary Long, the acting director of the 914 form, who led the review.

The Wall Street Journal last month reported that the EIA also has key deficiencies in its collection of market-moving oil-inventory data that has caused swings in its survey.

The EIA has been overtaken by advances in technology, oil-shale finds and changes in the industry and has been less able to account for smaller companies that increase or decrease production. Some commodities analysts and gas producers, such as EOG Resources Inc., have long suspected that the EIA has overstated domestic natural-gas output — a factor they argue has helped push prices to seven-year lows in 2009.

“The model we have now overestimates” production, Mr. Long said in an interview. He said the review was prompted by the EIA noticing aberrations in some states. “We saw some numbers we didn’t like in Texas; we thought they were a little too high,” Mr. Long said.

Mr. Long said the EIA plans to change its methodology, though he didn’t give details. The changes could lead to a downward revision of the nation’s gas production. While overall there mightn’t be a big change, Mr. Long said, some states will see “significant” revisions in production.

The EIA data showed that gas supply rose 4% in 2009, despite a 60% decline in onshore gas rigs. The conflicting numbers have perplexed analysts.

Analysts also point to the discrepancy between supply (how much gas is produced or imported) and demand (the amount that is stored or used). Those two figures should cancel each other. While there always is a margin of error, that margin has widened sharply in recent months.

In December, the agency reported total new gas supply at 87.8 billion cubic feet a day and total demand of 80 billion, leaving 7.8 billion cubic feet unaccounted for — a margin of error of 10%.

“It’s getting ridiculously large,” said Ben Dell, an analyst with Sanford C. Bernstein. “When you have a 10% gap, that’s somewhat making a mockery of the data.”

Mr. Dell in January wrote a report raising questions about the mismatch. In that report, he focused on October numbers that showed a 12% margin of error.

“We think that most would agree that a 12% margin of error makes a data set tough to rely on, to say the least,” Mr. Dell wrote in that report. Rather than gas supply being flat or slightly down as the data suggests, Mr. Dell wrote, he believes production is actually falling.

When that gradually becomes apparent, gas prices will be pushed “much higher,” he says.

When told of the expected changes, Mr. Dell said: “It’s good that they are actually paying some attention.”

Mark Papa, chief executive of EOG Resources, a Texas-based gas producer, has long criticized the data, and sought a meeting with EIA officials because it is “a serious enough consistent data error we need to bring to their attention.”

The “erroneously high” numbers have depressed prices, Mr. Papa said.

On April 30, the EIA is scheduled to release its natural-gas monthly report for February. In the report, the agency will use the new methods to estimate gas supply and revise its January numbers. The numbers for 2009 won’t be updated until late fall.

In the upcoming report, the agency also will use more recent data — six to 18 months old — to estimate production by companies that aren’t included in the survey. The current model uses data that are two to seven years old, the EIA says.

– Brian Baskin contributed to this article.

KARRATHA, Australia (AP) – First gold, then coal and iron ore. Now, a new bonanza is about to be unleashed from beneath Down Under: Australia’s got gas.

Projects being ramped up to tap huge undersea fields off the country’s northwest could quadruple Australia’s exports of liquefied natural gas in the next few years and turn it into what the country’s resources minister has called an “energy superpower.”

It will be the next stage of a long boom that has enriched Australia and made it a key supplier of the raw materials underpinning Asia’s development — from the girders in city skyscrapers to the fuel burned to light them.

“We have what the world, and particularly the rapidly growing economies of Asia, want — iron ore, energy and minerals,” said Colin Barnett, the premier of Western Australia state, which is at the heart of the new boom.

The mostly desert state has become known for a frontier atmosphere not unlike that of Australia’s 19th century gold rush, the country’s first mining boom that drew enough migrants to almost triple Australia’s population within a decade.

As a major source of the materials driving Asia’s economic surge, Australia has increasingly been drawn into the orbit of emerging giants China and India, spawning tensions and discord. There are also nagging worries over economic overheating and long-lasting environmental damage caused by its thriving resource industry.

Gas was discovered off Australia’s remote northwest coast in the 1970s. But its exploitation has lagged behind iron ore and coal that have been easier to get and more in demand.

Now, gas is gaining popularity as a cleaner-burning alternative to coal in power generation, with a fraction of the greenhouse gas emissions.

The biggest boost in the sector came last September, when Chevron and joint venture partners ExxonMobil and Royal Dutch Shell announced they would go ahead with the massive Gorgon project.

The venture will drill fields about 80 miles (130 kilometers) offshore to tap into an estimated 40 trillion cubic feet of gas, build pipelines and a liquefaction plant and port for about AU$43 billion ($41 billion) — roughly the size of Guatemala’s gross national product.

If that sounds big, the numbers stack up. The decision to proceed came on the heels of news that ExxonMobil Corp. had signed a 20-year deal worth about AU$50 billion to supply PetroChina Co. with LNG from its share of Gorgon. Similar deals for Gorgon gas worth another AU$70 billion were struck with power companies in Japan, South Korea and India.

The Australian government says Gorgon could generate exports worth AU$300 billion during the next 20 years. And that’s just one project. There are at least a half dozen other large gas plans in the works, including Australian company Woodside’s $12 billion plan to tap the Browse fields holding an estimated 20 trillion cubic feet of gas.

Yet even as the projects pile up, Australia is trying to tamp down strains with China that have taken some of the gloss of its mineral and energy endowments.

On Monday an Australian executive of mining giant Rio Tinto will face court in China charged with stealing commercial secrets in a trial Australian lawmakers are concerned is linked to Beijing’s unsuccessful campaign to get lower iron ore prices. The case has added to unease about close China relations after a string of deals for state-owned Chinese firms to buy into Australian resource projects.

Other problems are local but no less intractable.

Gorgon, Browse and some of the other big deposits lie off the Pilbara, a remote Outback region of Western Australia that is buffeted by a half-dozen cyclones a year and where temperatures can soar to 118 degrees (48 C).

Western Australia’s few urban areas are already bursting at the seams because of the mining boom. A five-hour flight across nearly unbroken desert from Sydney, the state capital of Perth can’t build hotels fast enough to keep up with demand, and cranes building office towers dot the skyline.

A severe worker shortage means companies compete for just about everyone from mine site managers to truck drivers — who can earn more than AU$120,000 a year in salary and a rest and recuperation flight to Perth every month.

One of the main supply towns is Karratha, a sweltering collection of houses and a few shops and pubs nestled between hills covered in spinifex and boulders of a deep-maroon color that belies the iron content within.

It’s more than 1,000 miles (1,800 kilometers) from the nearest city, surrounded by some of Australia’s harshest territory, and there’s almost no one here but miners. A bungalow with a pool can set you back AU$2,000 a week in rent.

“It’s gone bloomin’ overboard,” said Jim Holland, a driver and 40-year-veteran of mining in the region. “The house down the road from me sold the other week for $900,000, three bedrooms.”

Holland is one of the lucky ones. Rio Tinto in the 1980s offered to sell some company-owned houses to longtime workers for around AU$45,000, and he took it up. Before too long he plans to sell up and retire in comfort to Thailand.

The federal government has appointed a task force to find ways to fill an expected shortfall of 70,000 construction workers in the resource sector in the next decade, with fast tracking of visas for skilled migrant workers — likely from Asia and the Middle East — a key consideration.

Gorgon alone is expected to create 10,000 jobs — including several thousand workers during construction on currently uninhabited Barrow Island.

Conservationists say the government should never have approved Barrow Island as a site for the liquefaction plant. The nature reserve is home to species such as the flatback turtle and the burrowing bettong, a rat-like kangaroo that no longer survives on the mainland.

“I don’t see how you can have a safe operating environment for an industrial facility and also create the natural dark conditions that turtles need in order to not be disturbed from their natural nesting,” said Gilly Llewellyn, the World Wildlife Fund’s conservation manager.

Chevron says the plans for Gorgon avoid conservation sites and the project is environmentally friendly because it includes plans to inject polluting carbon dioxide gases into an underground trap. Chevron did not respond to requests for an interview.

Environmental concerns about the industry deepened last year after fire erupted on an oil and gas rig at a different field off the northwest coast and burned unchecked for more than two months, spilling thousands of barrels of oil into the sea.

On Barrow Island, the first signs of Gorgon are starting to show. Shipping containers — entirely shrink-wrapped to prevent mainland pests such as rats or cockroaches being introduced — are being unloaded and scrub cleared for an accommodation camp, said Anne Nolan, a state government official who visited this month.

Before long, it will be a bustling scene of more than 3,000 people working around the clock.

On the ‘Net:

http://www.chevronaustralia.com/home.aspx

http://www.wwf.org.au/

by Monica Gerson
According to Goldman Sachs, the risk/reward profile for natural gas is improving “following the pullback in recent weeks. The analysts say, “(1) we expect a potential demand pickup at the expense of coal if prices fall from here; (2) we continue to expect below-consensus LNG imports; and (3) industrial and electricity data points have improved.” “The key driver of a potential bottom is whether the rig count falls. While E&Ps we met in Texas are unlikely to drop rigs, much of the upside surprise vs our base case to the rig count has come outside key resource plays and from producers not under coverage,” the analysts add.

Goldman Sachs mentions that “we continue to have a Neutral coverage view on E&Ps, in part pending greater confidence in a rig count double-dip. We reiterate key E&P themes – Granite Wash/Marcellus Shale/Bossier Shale exposure and restructurings – that underlies our Buy ratings on XCO, UPL, NFX (each of which we met, we raise our 6-mth DCF/multiples based target price on NFX to $66 from $63), DVN, EOG and STR. We also believe oil resource expansion will remain potential catalysts via the Eagle Ford Shale, Monument Butte, new onshore oil plays and deepwater exploration. Commodity volatility, drilling results, costs, gov’t pronouncements are key risks.”

SYDNEY, (AP) – Arrow Energy Ltd., a major owner of natural gas assets in northern Australia, said Monday that a company jointly owned by Royal Dutch Shell and PetroChina has sent it a takeover bid worth $3.3 billion Australian dollars ($3 billion).

Nearly half of Shell’s production of oil and equivalents comes from gas, so Arrow is a natural target for Europe’s largest oil company — and Shell already owns a 10 percent stake of Arrow’s operations outside Australia.

Shell confirmed it was considering acquiring the Australian company, and said talks were in an early stage.

Brisbane-based Arrow said in a statement to the stock exchange it had received a nonbinding indicative proposal of AU$4.45 ($4.06) per share plus a share in a new entity comprised of Arrow’s international business.

Arrow advised shareholders to take no action at the moment, and said the company had appointed financial and legal advisers to look at the proposal.

Shares in Arrow Energy surged more than 40 percent to AU$4.98 ($4.54).

Arrow Energy is an integrated energy company focused supplying coal seam gas to eastern Australia and Asia. It claims to have the largest coal seam gas reserves in Queensland state.

The company had been planning to list 20 percent of its Arrow International arm, retaining 70 percent, with the remainder already held by Royal Dutch Shell.

Among major integrated oil companies, Shell considers itself expert in converting methane to liquified natural gas, or LNG, so it can be shipped rather than piped away from its source.

It has a separate LNG project in the works in Queensland which would benefit from the extra supply from Arrow.