Arrow Exploration Corp. (AIM: AXL): High production, reserves addition at Tapir
• Production has increased to 5,325 boe/d, up from 4,900 boe/d in early March, driven by rising output from the M‑9 Hz well.• Further growth is expected with the imminent addition of the M‑11 well, which encountered 48 ft of net pay across the C7 and C9 formations and is scheduled to be brought online in the coming weeks.
• M‑11 intersected both zones structurally higher than any previous Mateguafa Attic well, extending the structure southward and confirming additional development potential. A further horizontal well, M‑12 Hz, targeting the C9 formation, is planned for March.
• We have increased our target price from £0.40 per share to £0.45 per share, reflecting the incorporation of YE25 reserves, stronger‑than‑expected production performance, and a higher Brent assumption for 2026 (US$76/bbl vs. US$69/bbl previously). The next key catalyst is the Icaco exploration well, scheduled for April, which carries an unrisked NAV of £0.13/sh.
Positive reserves update
YE25 2P reserves are estimated at 11.8 mmboe (vs. 13.6 mmboe at YE24). Although this includes a net negative revision of 0.4 mmboe, we highlight that 0.5 mmboe of new reserves were added at Tapir, which we view as a very positive development. The Tapir reserves addition reflects the positive results at Alberta Llanos and incremental contribution from Mateguafa Attic, more than offsetting the impact of lower Brent price assumptions used in the YE25 evaluation. Given that most horizontal wells at Mateguafa Attic were drilled in 2026, we expect further reserves booking at YE26. The overall negative revision is driven by a downgrade at the Non‑Core assets (Oso Pardo and Capella), to which we ascribe minimal value (~US$3 mm) given the negligible production.
Valuation
We have increased our Core NAV from £0.28 per share to £0.32 per share and our ReNAV from £0.39 per share to £0.44 per share.
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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