Arrow Exploration Corp. (AIM: AXL): CN-1 well in production at 1.1 mbbl/d from the C7 sands
• The C7 formation (~26 feet of net oil pay) in the Carrizales Norte-1 well (CN-1) is now in production at a rate of 1.1 mbbl/d (550 bbl/d net to Arrow). The well produced very light oil (33.5 deg API) and is on pump set at the lowest setting.• During the flow test, the sands flowed at a peak rate of 1,272 bbl/d. During the final hour of the test water cut stood at 12%. The water cut has decreased throughout the well test.
• This is one of the best initial production rates among the wells drilled by Arrow on Tapir, which highlights the very good reservoir quality of the C7 reservoir and the higher downhole pressure (the reservoir is deeper than at Rio Cravo Este).
• The flow rate achieved at the C7 sands is addition to the rate from the deeper Ubaque formation (1,600 bbl/d gross, 800 bbl/d net). Overall the CN-1 exploration well has flowed a total of 2.7 mbbl/d gross production from two zones on test. These two zones could be developed with a total of up to five wells.
• On 1 June Arrow held US$11.2 mm in cash. This is higher than our forecast at the end of June (~US$7 mm). We re-iterate our target price of £0.50 per share (~our ReNAV).
2.7-2.9 mboe/d production
While the Capella field is still shut down (~280-300 bbl/d lost net production), overall corporate production is now 2,700-2,900 boe/d. This is in line with our forecasts. The Carrizales Norte-2 (CN-2) well was spud on 18 June. This will be followed by CN-3. The company will then complete a new reserve report. After the CN-3 well is completed, the rig will move back to the RCE field to drill two dedicated Gacheta wells. A third well, RCS 2, is also expected to be drilled at that time targeting the C7 formation. Before taking into consideration natural decline, this five new wells could add 2,000 bbl/d net to Arrow, assuming 400 bbl/d per well (net to Arrow).
Valuation and cashflow
Our ReNAV is £0.53 per share. Assuming US$75/bbl for Brent until YE24, we continue to forecast that the company will hold >US$15 mm in net cash at YE23 and >US$50 mm at YE24.
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.