Arrow Exploration Corp. (AIM: AXL): Discovery at Mateguafa Attic
• The M-5 vertical well at Mateguafa Attic encountered approximately 26 feet of net oil pay in high-quality Guadalupe sandstone (22% porosity), along with an additional 11 feet in the Carbonera C7 formation. The discovery will contribute new reserves, as none had previously been attributed to Mateguafa Attic.• The well was brought online in the Guadalupe interval, delivering a gross oil rate of 570 bbl/d with an 8% water cut on a tight 17/128 choke. Net to Arrow, this equates to ~285 bbl/d — a strong result for a vertical well.
• The well had four exploration targets: Gacheta, Ubaque, C7 and Guadalupe. The C7 was the lowest risk target as it had been encountered in a neighboring well. Encountering the Guadalupe was a positive surprise.
• Success at M-5 has derisked three follow-up wells. M-6 has already spudded, with drilling, testing, and completion expected to span 3–4 weeks. Positioned higher in the structure, M-6 could confirm an extensive pay zone in the Guadalupe formation. A successful outcome may pave the way for an expanded development plan featuring horizontal wells.
• Corporate production is now ~4,000 boe/d. M-6 and M-7 could each contribute an additional 350 bbl/d net.
• We have now moved Mateguafa Attic into our Core NAV and increased the risking factor on the assumed 2.5 mmbbl net resource from 60% to 75%.
• In 2026, Arrow then plans to 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
As of November 1, Arrow held US$8.2 million in cash and remained debt-free. We have raised our Core NAV from £0.22 to £0.27 per share. Our ReNAV remains broadly 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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