Arrow Exploration Corp. (AIM: AXL): Two positive well results. Low decline rate at Mateguafa
• The M‑10 vertical well encountered approximately 20 ft of net oil pay with 20% porosity in the C7 formation, and around 25 ft of net oil pay in the C9. The C7 has been brought onstream on a very small 25/128 choke, producing 1,100 bbl/d gross (550 bbl/d net) of 31° API oil with a 6% water cut. This is a notably strong rate compared with other vertical wells at Mateguafa.• The M‑9 horizontal well has been placed on production on a 31/128 choke at 850 bbl/d gross (425 bbl/d net) with a 16% water cut.
• Without much surprise, the M-8 well that came online with a 78% water cut will be converted into a water‑disposal well.
• Production from the other Mateguafa wells continues to show only shallow declines relative to the 28 January update.
• Arrow’s total production has reached 4,900 boe/d, above the 4,625 boe/d reported on 28 January and ahead of our 1Q26 forecast of 4,395 boe/d. With the M‑11 well scheduled to target both the C7 and C9 formations, our current 1Q26 production estimate now appears conservative.
• Cash at 01 February stood at US$7.2 mm, approximately US$1.4 mm above our expectations.
• We maintain our forecasts pending the release of the FY26 budget and reiterate our £0.40 per share target price. The next key catalyst is the drilling of the Icaco prospect in April, which carries an unrisked NAV of £0.12 per share.
Valuation
Our Core NAV is £0.28 per share with a ReNAV of £0.39 per share.
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.
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