Arrow Exploration Corp. (AIM: AXL): Another positive result at Mateguafa Attic
• The M-6 vertical well has encountered 30 ft of net oil pay in the Carbonera C9 formation (previously named Guadalupe). This compares favourably with the results of the M-5 well that encountered ~ 26 feet of net oil pay in the same formation. This result provides a strong foundation for the first horizontal well at Mateguafa (M-HZ7), already spudded and expected to come onstream in December. Additional horizontal wells could follow, with the Mateguafa Attic potentially proving more material than initially anticipated.• The M-6 well also intersected ~18 ft of net oil pay in the Carbonera C7 formation, compared to 11 ft in M-5. This zone has been placed on production at 824 bbl/d gross (412 bbl/d net), exceeding our expectations of ~700 bbl/d. Oil quality is high at 32° API with a low water cut of just 3%. There could be scope for further vertical drilling opportunities in this horizon.
• In addition, M-6 encountered 14 ft of net oil pay in the Lower Gacheta—a positive and unexpected outcome that adds incremental upside.
• Arrow is already considering adding new cellars at Mateguafa in expectation of new drilling locations.
• Gross oil production at M-5 remains stable at 550 bbl/d (275 bbl/d net), versus 570 bbl/d gross (285 bbl/d net) two weeks ago. With M-HZ7 being a horizontal well, production rates are expected to significantly exceed those of M-5 and M-6.
• In 2026, Arrow will test the Icaco, Macoya and the Capullo prospects. Our combined unrisked NAV for these three wells is £0.31 per share.
• We re-iterate our target price of £0.40 per share.
Valuation
Our ReNAV remains unchanged at £0.38 per share and does not yet incorporate the potential emergence of a new core area at Mateguafa Attic, which could be developed through horizontal wells.
Front Range Resources is engaged in oil and natural gas exploration and production focusing on horizontal multi-stage frac development in Montney, Bluesky, Wilrich and Falher formations in the Deep Basin area of west central Alberta.
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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