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(Sharecast News) - Analysts at Canaccord Genuity lowered their target price on Colombia-focussed oil firm Arrow Exploration from 50.0p to 44.0p on Thursday but acknowledged that near-term drilling was likely to reboot production growth.
Canaccord Genuity said Arrow's recent operations update highlighted, in its view, the limitations of normal vertical/near-vertical wells to deliver "significant growth" at the company's Tapir licence in Colombia.
The Canadian bank also stated that Arrow's step-up in production in H224 was driven by horizontal drilling at its CN field, and that it thinks its operational template will likely have the most impact across the licence from now.
"The stock has reacted sharply downwards following the recent update. We recognise the market's disappointment as production has declined over the past couple of months, but the company is only in the very early stages of its 2025 operational programme," said Canaccord.
"We believe the forward drilling plans should set the path upwards once again from early Q2, and with the momentum backed by a strong balance sheet ($23.0m cash and no debt at 1 February) we maintain our 'buy' rating."
Reporting by Iain Gilbert at Sharecast.com
