Report
Stephane Foucaud

Arrow Exploration Corp. (AIM: AXL): Dry hole at Mateguafa Oeste but three more prospects to drill

• The Mateguafa Oeste was water wet. Our ReNAV for the well was £0.09 per share. We did not carry any production from this prospect in our cash flow forecast.
• The rig will now move to Mateguafa Attic where the Mateguafa 5 vertical well will be drilled in November. This is a low risk well that is a step out to Mateguafa 1 and Mateguafa 3, which together historically produced 0.6 mmbbl of oil out of the Carbonera zone, C7. This target is geologically independent from the Mateguafa Oeste prospect. The well will be targeting both the C7 and Ubaque reservoirs. Our unrisked NAV for the well is £0.08 per share.
• On the basis of a successful well at Mateguafa 5, Arrow plans to drill three additional wells, one vertical and two horizonal, on the prospect.
• Arrow then plans to test the Icaco, Macoya and the Capullo prospects. Drilling could start in 1Q26. Our total unrisked NAV for the three wells is £0.31 per share.
• As we reflect the drilling result at Mateguafa Oeste on our valuation, we have changed our target price to £0.40 per share.

Valuation and forecasts
Our Core NAV and ReNAV stand at £0.22 and £0.38 per share, respectively. We forecast that the company’s net cash will be higher than its market cap by ~YE28.
Underlying
Arrow Exploration Ltd

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.

Provider
Auctus Advisors
Auctus Advisors

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. 

Analysts
Stephane Foucaud

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