Arrow Exploration Corp. (AIM: AXL): Rebuilding cash momentum; Icaco prospect drilling on track for 1Q26
• Arrow reported 3Q25 production of 4,214 boe/d, broadly in line with our ~4.4 mboe/d expectation.• The company held US$6.5 mm in cash at end‑September (with no debt), rising to US$8.2 mm by 1 November.
• With only one rig currently in operation, recent drilling success at M‑5 and M‑6, and the imminent contribution from the M‑HZ7 horizontal well, we expect Arrow’s cash position to continue to strengthen.
• The next four months will be very material. M‑HZ7 is the first horizontal well targeting the C9 horizon at Mateguafa Attic. Results are due in December. Success here could pave the way for further horizontal wells to materially lift production. In addition, multiple drilling opportunities exist in the C7 formation. We anticipate Arrow will book reserves for Mateguafa that could prove more material than initially envisaged.
• In 1Q26, Arrow plans to test the Icaco prospect, which carries an unrisked NAV of £0.12 per share.
• Capullo and Macoya Este provide further upside, with respective unrisked NAVs of £0.12 per share and £0.07 per share.
• We re-iterate our target price of £0.40 per share.
Valuation
Our ReNAV remains unchanged at £0.38 per share and does not yet incorporate the potential emergence of a new core area at Mateguafa Attic.
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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