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(Sharecast News) - Analysts at Canaccord Genuity hiked their target price on exploration and production business Arrow Exploration from 40.0p to 44.0p on Tuesday following "a very encouraging start" to the group's extensive 2024 drilling programme.
Canaccord Genuity said Arrow's CN-4 well was now producing a gross 478 barrels of oil per day 13 API crude, being managed to maximise well recovery from the high-quality Ubaque reservoir, something the bank called a "solid start".
When it comes to CN-5 on the Carrizales Noroeste prospect, the first of three exploration targets in 2024, Arrow has confirmed the westerly extension of the Ubaque reservoir at CN field, with 45 feet of "excellent quality oil reservoir".
"A very good result so far, with well completion for production over the next few weeks and the company anticipating reserves additions," said the analysts, who reiterated their 'buy' rating on the stock.
Looking ahead, the Canadian bank noted Arrow's total planned 15 wells, with a net $45.0m budget, targeting the extensive Carrizales Norte field development and three low-risk exploration targets that could be brought on-stream quickly. Canaccord also highlighted that at the end of 2023 there were 12 producing wells on two Tapir fields and by the end of 2024, that could have more than doubled on up to five fields.
"We make a number of small changes to our production outlook which combined trim 1.0p from our risked NPV12.5 central valuation, now 39.0p," said Canaccord. "However, while we do not yet factor in production from this year's exploration targets, we now include a risked value for those in our target price."
Reporting by Iain Gilbert at Sharecast.com
