Arrow Exploration Corp. (AIM: AXL): US$24 mm capex and up to 9 wells in 2026
• FY25 production averaged 4,012 boe/d; which is in line with expectations.• Arrow plans to drill up to nine wells in 2026, four of which have already been completed.
• FY 26 Capex is set at US$24 mm, consistent with our forecasts.
• We forecast FY26 production of ~4.8 mboe/d.
• The FY27 drilling programme will depend on the Tapir licence extension, which will determine the scale and pace of activity.
• The M‑HZ12 well at Mateguafa Attic is currently cleaning up; we expect further details next week.
• The rig is now moving to the Icaco prospect, a key exploration well. Our unrisked NAV for Icaco is £0.13 per share, based on 3.7 mmbbl WI prospective resources.
• Arrow has identified multiple additional exploration prospects across the Tapir block.
• A new CPR is expected mid‑year, incorporating recent drilling results and performance at Mateguafa Attic.
• The company is also looking at acquisition opportunities.
• We reiterate our target price of £0.45 per share.
Valuation
• Our Core NAV stands at £0.35 per share, with a ReNAV of £0.47 per share, based on Brent assumptions of US$77.5/bbl for 2026, US$71.2/bbl for 2027, and US$70/bbl thereafter.
• We forecast net cash of US$37 mm at YE26 and US$50 mm at YE27. For now, we assume minimal capex from 2028 onward, resulting in net cash of US$78 mm at YE28.
• At US$80/bbl, we estimate net cash of US$57 mm at YE27 and US$90 mm at YE28.
• At US$90/bbl, net cash would increase to US$66 mm at YE27 and US$103 mm at YE28.
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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