Arrow Explor. Share Chat (AXL)

“On this particular reservoir, I think we’ve got room for 10 more”

After waiting & holding patiently for over a year, this looks more promising than I had initially expected. The free cash situation is the one that interests me the most with these particular wells being fully paid back in 6-7 weeks. In my numbers, I'm seeing a significant cash balance in excess of the current market cap in 2025-26. Realistically, we should be looking at 30-35p comfortably when the wells have settled.

On the rise is Canada.

Could well quadruple over the coming days. Thats an aweful lot of oil with huge amount to come.

This is one hell of a growth share.

3 min 27 secs

“On this particular reservoir I think we’ve got room for 10 more”

Reference to horizontal wells.

Enough said :)

Re-Rateing coming. When this gets out to the day trading crowd 💥 100 a target for me.

Today's news has massively increased the cash generating potential of Arrow's business and by implication hugely strengthened the investment case.

Last year the company doubled production by drilling 11 vertical wells all funded from cash flow and, ended the year with the same net cash position....achieved at an average Brent price of $82.49/bbl.

However, the CNB-HZ-1 horizontal well is currently producing at a restricted net 4.63 times the modelled performance of adjacent vertical wells on the field(and 6.3 times their subsequent average net production) while costing just a net $1m more to drill!

This is not an incremental improvement but a huge step change increase in what was already a compelling investment case - as demonstrated by last year's self funded doubling of production from the very good but, much lower relative performance of vertical wells.

Plus, if the experience of Arrow's two leading independent Llanos Basin peers is a reliable guide, not only will Arrow get the benefit of a huge increase in production and cash flow from horizontal wells but, a highly material reduction in the field decline rate, enabling the company to potentially book a significant increase in P2 reserves for the field.

Parex Resources, the largest independent acreage holder in Colombia, secured all the remaining licenses surrounding Arrow's primely located Llanos Basin Tapir Block in an off market deal during the last Colombian O&G auction - as a consequence, you could bet money that with a circa $350m - $400m production development budget for 2024, Parex will be watching Arrow's Tapir Block horizontal drilling performance more like a hawk than the eye of a fellow Colombian producer.

AIMHO/DYOR

ps: This is the icing on the cake - "The three follow up wells will have longer horizontal sections, which are expected to result in enhanced rate and ultimate recovery." Exactly the results that the two leading independents experienced.

CNB-HZ-1 - is currently producing at a restricted net 4.63 times the modelled performance of adjacent vertical wells on the field(and 6.3 times their average net current production) while costing just a net $1m more to drill!

"The initial success of the first horizontal well at the CNB pad, which is currently exceeding expectations, is an important milestone in the development of the hydrocarbon-dense Ubaque formation. The horizontal technology proven by this well can now be used to exploit further prospects on the Tapir block, and potentially the Oso Pardo block."

Interesting to note in light of the result of the CNB-HQ-1 well the management have amended their view as to the potential for deploying horizontal well drilling technology in the similarly thick reservoir of the Oso Pardo field. When I this asked this question 8 months ago, the answer which came back was that it was unlikely ....... the drilling and initial production result of the CMB-HQ-1 well has clearly changed that view and additionally, is likely to significantly aid Arrow's case to secure regulatory approval to bring the huge natural extension of the Oso Pardo field within Arrow's existing license for the asset.

AIMHO/DYOR

Https://www.proactiveinvestors.co.uk/companies/news/1050192/arrow-exploration-announces-successful-production-and-future-plans-at-carrizales-norte-field-1050192.html

42p for now seems like a good call - just hoping it gets better than this with more positive news - that said I just bought in this morning so I’m a happy bunny!!!! Lol gla

I think this echoes my sentiment :)

https://x.com/Robin25461631/status/1803338961013678445

Hey Ezhik - thanks for sharing and completely agree with you having looked at the assets, it definitely doesn't match up. My view is the mix of early growth risk and capex, and perhaps the sentiment around the volume of reserves and how long they can keep them flowing. With the latter they've done a great job here with proving these up in the last 12 months (up 54% from last year), and with aggressive development will only reinforce and increase those figures. I also suspect this is why they're aiming to drill the other identified prospects later this year (Baquiano and Mateguafa Attic) - to show that the long term growth and opportunity is there.

With the early growth/development stage out of the way and increasing/multiplying production at these rates though, it's hard not to see this naturally grow the share price over the next few months. If I've calculated correctly, with current production and netbacks, we're currently in the region of £5-6m net revenue per month (with potential to double that in the coming months). With these figures I'd be surprised to see the share price being held back too much longer - it might just need the next quarterly results or two to cement it. If we do trickle up, there are two big thresholds which might set this soaring too in my opinion - hitting a price of 32p and 52.5p. At that point we should see investment from bigger ii's when the market cap thresholds are reached.

It may mean waiting another 6 months or so for the next set of results and confirmation of production rates and reserves to really get this going, but hopefully it'll be worth the wait! There are still some risk as always, especially with the exploration targets, but today's news has massively de-risked their horizontal drilling campaign and sets us up for a huge production ramp, generating revenues far beyond the current market cap. It'll be interesting to hear what the plans for 2025 will be too. Again, all my honest opinion and wishing everyone GL here :)

Yup, and says as much in today's RNS: "The three follow up wells will have longer horizontal sections, which are expected to result in enhanced rate and ultimate recovery."

Given they've even restricted the flow of this first well at just above 3000 bopd, it would probably be a fair assessment to say that all of these wells will also produce at minimum 3000 bopd given the extended length, which is huge upside on current figures and shows they made the right decision with picking horizontal drilling (the ESP is set to minimum at this point, so even if flow rates plateau out slightly, they can notch it up).

At this point, feel this is still very much under the radar and glad I found this little gem. No debt, great production figures (~3600 bopd), aggressive development, new prospects, all of this and their assets are wildly undervalued against market cap (~£57m) - just read the annual report and that's clear (and that's before today's news). I would hope we see this creep upwards over the next few months off the back of this and in anticipation of future development. Just my view, DYOR :)

Stally. I have read a couple of your posts and have agreed with what you have said here and elsewhere-HEX, you do at least seem to have your head screwed on. The trouble is, what looks like in incredible bargain opportunity has been that way for about a year or more and there is little correlation between how well the company are performing and the share price/mcap. Price should be 50p plus with the increasing reserves, the delivery on what has been promised and the cash reserves as a cushion already in place if they have a mis-hap. Yet other stocks, trading on hype alone see to do much better. Beats me tbh. I've been in Axl now for about 18months and one day the market will catch on .

Https://www.petroworks.com.co/en/rigs/drilling.html

He was right . . . must admit to some scepticism on Marshall's early excessive optimism. He now has grounds for bringing in the 1500 rig which should have an >2 km reach. ?Perhaps some adjustment to the next three laterals' length?

And will top up when funds allow… gla

Https://www.share-talk.com/rns-hotlist-with-zak-mir-tap-orcp-axl-pow-phe-ixi-seed-eleg/

"Unbelievable cheap share price."

Just from CNB HZs alone we have the potential for an additional 10-12k bopd (net 5-6k to Arrow) over the next quarter, which is double our current production. This doesn't even include OP-3 & OP-4 stimulation and our next prospects in Q4. Great time to be in here, even at these prices, pretty excited for the next 6 months!

Https://www.proactiveinvestors.co.uk/companies/news/1050143/arrow-exploration-exceeds-expectations-at-carrizales-norte-1050143.html

Looks like its on the radar now with nearly 200 transactions in the first hour.

Market cap. £ 67m, had $11m cash as of Q1. 2700 boepd and now have a fighting chance of doubling that even if just 2 horizontals produce, let alone all 4. You have to say on the balance of probabilities this is worth an investment.

And don't forget $12m in the bank!!

Just wish they would update a bit more often whilst drilling. Helps to keep the momentum up.

Just added here, incredibly under the radar

Wouldn’t be surprised to see this in the £s at some stage

All IMO

Likewise, looking forward to seeing where this is in 3 months time and looking forward to our new exploration prospects too.. plenty of news and excitement in the pipeline to keep this ticking with significant increases in production to report in coming quarters :)

FWIW, just doubled holding.

Certainly look like they know the business..

What a great company this is, totally under the radar at the moment. No debt, self funding from the oil it already produces eg no dilution. Proof that horizontals work should propel this company to new levels.