Arrow Exploration Corp. (AIM: AXL): All eyes on the first horizontal well at Carrizales Norte
• The 1Q24 production of 2,730 boe/d was close to our expectations.• Arrow’s cash position of US$11.6 mm was also in line.
• The first water disposal well at RCE is being brought into production and the conversion of the CN-4 well is currently waiting regulatory approval. These two disposal wells are very important to debottleneck the company’s oil production at RCE and Carrizales Norte.
• The key near term newsflow is the drilling result of the first CN Horizontal well (CNB HZ-1) from the Carrizales Norte B pad. The well has already spud and the production figures are expected in the coming weeks. This will have important consequences on the production growth outlook of the company. We currently assume gross IP rates of 1.5 mbbl/d per horizontal well.
• We re-iterate our target price to £0.65 per share.
Other newsflow
Arrow could publish a mid-year reserves report, including the recent discoveries at CN-5 (Ubaque) and CN-8 (Carbonera). We currently estimate the overall net reserves addition at ~4.3 mmbbl. The company will also drill the Mateguafa Attic and the Baquiano prospect in the Llanos. Our aggregate unrisked NAV for these two prospects is £0.18 per share.
Valuation and cashflow
We continue to forecast ~3.9 mboe/d production in 2024 increasing to 5.6 mboe/d in 2025. Booking 4.35 mmbbl net reserves at Carrizales Noroeste and CN-8 (Carbonera) could add a further £0.11/sh. Assuming US$85/bbl for Brent until YE25, we forecast that the company will hold >US$60 mm at YE25.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.