Member Info for MountTeide

Based on the outstanding fundamentals, I consider a s/p of 30p as still offering highly compelling value over an 18-24 month investment outlook, when considering the business development progress made to date and the exceptional potential of the low cost, high CoS, self financing, 23 well, 2025 production development and exploration drilling campaign.....together with the size, quality and high CoS of the infill and exploration well drilling inventory out to 2027.

Since the Q4/2021 London IPO, AXL has achieved a CAGR of 51% to y/e 2024 - a top 1% O&G sector performance - and is well positioned to extend this excellent growth record during the next 2 years - as it would only require a 2025 y/e shareprice of 34p and 49p at y/e 2026.

I have a high expectation that AXL will give Valeura Energy, the sector's best performer, a run for its money over the next two years - Valeura has achieved a CAGR of 121% over two years for its shareholders since the new management took over. However, it's almost certain that Valeura's incredible CAGR performance will slow from its current level over the next two years while Arrow's, on the balance of probabilities, is highly likely to increase.

AIMHO/DYOR

Declaration - have held both stocks from very shortly after the new management took control. Sold 50% of the Valeura holding after 15 months for a circa 300% capital gain(while never a mistake to take a profit - the still improving fundamentals and subsequent s/p performance clearly now suggest it was a little early). My 4.0m AXL holding has an average buy price of 11.47p.

I find using a comparison of quarterly average production figures a more reliable guide for measuring growth, than a single point in time production figure, which can be heavily influenced by the addition of a high performing well or two drilled in the month before the snapshot figure.

That's why i called out the management with respect to the 3,200 boepd YE 2023 production figure - as it made little sense when Q4/23 average production was 2,335 boepd, Q1/24 - 2,730 boepd, and Q2/24 - 2,546 boepd.

Adjusted for the removal of the Pepper, Canada production figures the above figures were Q4/23(2,107 boepd), Q1/24(2,510 boepd) and Q2/(2,464 boepd).

Why the removal of the Pepper, Canada production figures? From Q2/2024, the Pepper production has been shut in.

December 2024 average production was 4,899 boepd.....we know this is almost certain to be lower than the likely average for Q4/2024, as the snapshot production figures for earlier in the quarter were circa 5,500 - 5,700 boepd.

So, using the 4,899 Dec 2024 average, we get:

4,899 - 2,107(Q4/23) = 2,792 boepd - average production increase over last 12 months

4,899 - 2,510(Q1/24) = 2,389 boepd - average production increase over last 9 months

4,899 - 2,464(Q2/24) = 2,435 boepd - average production increase over last 6 months

The 2,793 boepd increase over the last 12 months was achieved from drilling 14 wells in 2024. Suggesting an average contribution per well of 199 boepd, after accounting for the average decline rate.

In 2025 - assuming a similar growth contribution of 199 boepd across the 23 well drilling programme: it could potentially generate 4,577 boepd of additional production in 2025 after accounting for the average decline rate.

4,899 boepd + 4,577 boepd = 9,476 boepd (Dec 2025)

Consequently, I'm comfortable with my circa 8,000 boepd YE 2025 average production rate (as it also does not include any contribution from the shut-in Pepper and Capella fields, which each offer 200-250 boepd of potential upside), or any contribution from Oso Pardo, were a deal with Canacol to be concluded in the Q1/2025 expected timeframe and a third rig deployed at the field, or high CoS exploration upside.

AIMHO/DYOR

Colombian Production Growth since the London Q4/2021 IPO (after adjustment for Capella):

265 bopd - Q4/2021

947 bopd - Q4/2022 (+257%)

2,027 bopd - Q4/2023 (+114%)

4,810 bopd - Q4/2024 (+137%)

A 164% CAGR industry leading organic production development performance during the three years since the London IPO.

You seem to have no self awareness - as your posts routinely come across as the hugely embittered opinion of someone who elected to watch AXL from the sidelines while the new, highly experienced and successful management delivered a CAGR of 51% for shareholders since the London AIM IPO.

The level of revenue and operating cash flow now being generated by the company each quarter at $76 Brent compared to the current $73m enterprise value is eye opening to say the least;

$73.0m - Enterprise Value

$31.5m - Estimated Quarterly Revenue

$22.7m - Estimated Quarterly Operating Netback at circa $50/bbl

$16.4m - Estimated Quarterly Operating Cash Flow - $36.3/bbl on an average 4,899 boepd

When the new management took over the company 4 years ago they inherited $12 million of debt, virtually zero cash and circa 245 bopd of high cost production!

Today, the company has $19m of net cash, 4,899 boepd of low cost production, tremendous fundamentals and a position as the fastest growing, in organic production development terms, small cap O&G company in the sector.

AIMHO/DYOR

Afentra's investment case is built on the Angolan assets generating $50m/yr of cash flow at $50 oil from production of circa 18,500 bopd gross......and an ongoing effective rate of tax of 20% for its mid life producing assets in Angola.

Currently, the average Brent oil price YTD(through to end Sept) is $83.56.

Average 2024 production is circa 23,000 bopd gross, which the management believe can be maintained for at least a decade, with potential upside of 17,000 bopd gross via optimisation of the existing well stock including workovers, access to behind pipe oil pools and optimisation of artificial lift applications. Together with the development of low cost longer cycle brownfield opportunities such as in-fill drilling and the tie-in of undeveloped discoveries.

Further upside not included in ERCE’s resource case have been identified and are under review, including additional infill drilling at the Bufalo, Pacassa and Oombo Fields, alongside potential access to shallower reservoirs.

AIMHO/DYOR

Standard Chartered: American Oil Output Won’t Surge Under Trump - Oilprice.com yesterday

https://oilprice.com/Energy/Crude-Oil/Standard-Chartered-American-Oil-Output-Wont-Surge-Under-Trump.html

AXL is on target to double production ORGANICALLY TWO Years running funded ENTIRELY from CASH FLOW!

The CAPEX budgets of Colombia's leading independents allocated to production development strongly suggests it would be far cheaper for one of them to today to acquire AXL at a considerable premium to the current share-price, such is AXL's ongoing and accelerating success at monetising their primely located Tapir Block's highly prospective assets. ....which is increasingly making the company resemble a well fed young buffalo isolated on the African Savannah surrounded by a pack of ravenous lions!

Arrow Exploration share-price performance versus Leading Colombian Independents with $billion+ market caps:

YTD

+53% - Arrow Exp

-6% - Geopark

-27% - Ecopetrol(NOC)

-46% - Parex Resources - recently bought all the remaining blocks surrounding AXL's Tapir Block

-50% - Canacol - former 20% shareholder of AXL

Since AXL London IPO / Oct 2021

+348% - Arrow Exploration

-42% - Ecopetrol(NOC)

-47% - Parex Resources

-48% - GeoPark

-83% - Canacol

S/p now down 99.99% post London AIM IPO.

Incredibly, the company still has 45 full time employees.

The Port jetty is still yet to be completed some 7-8 years after commencement of construction.

After 9 years of 'construction' barely half of the 200 acres of the inter tidal foreshore and Kajanja creek scheduled for reclamation to develop the port has actually been reclaimed and, of the 100 reclaimed acres, less than half has been developed with a high load bearing hardstanding to facilitate Port operations.

The 1,000m all weather quay as detailed in the IPO Document, never saw the light of day and was replaced by a cheap weather exposed 400m jetty, the 50m end of which is still yet to be completed some 8 years after construction commenced.

Development of the 'Port' in line with the IPO Document in any meaningful way ceased at least 6 years ago after they raised further money from clueless II's to 'accelerate' completion of 'construction' - despite claiming in the IPO Document that the £73m raised would be sufficient to complete the full build out of the Port.

Some £200m has been raised in equity and debt for a massively scaled down low quality terminal, compared to that detailed in the IPO Document. Of which they now have less than £1m in cash left and $50m of bank debt, attracting annual interest payments of nearly 4 times the current revenue being generated.

The CEO at the time of the IPO and during the following 8 years was arrested by the FBI on arrival in the US about 5 years ago and charged with carrying out a $300m securities fraud - for which he pleaded guilty in a plea bargaining deal, in return for a shorter sentence.

The former Chairman for most of the first 10 years following the London IPO, is a convicted fraudster who specialises in industrial scale Insider trading.

AIMHO/DYOR

Filter the troll - narcissistic, poorly researched nickel and dime traders like him are two a penny on equity investment bulletin boards. Even by their legendary standards, M1 Rob stands alone...his hugely overinflated opinion of his of stock picking talent is writing cheques that his posting history has never been able to cash. If you value your wealth - Avoid giving any value/credence to his hugely embittered posts like the plague.

Tremendous performance from assets purchased for a net $9.7m - well done to the Board.

To be in a zero net debt position by Q3/2024, so soon after completion of assets with a combined headline price in the hundreds of $millions is outstanding and, bodes extremely well considering their extremely high cash generating and low cost development potential at $50 oil.

Share-price performance of Arrow Exploration since the prospect of a Gustavo Petro presidency, compared to Colombia's leading five O&G Independents and Ecopetrol the NOC, would suggest CEO Marshall Abbott should not have to look too far for a buyer when the time comes to cash in our Tapir Block chips!

'Index of the share prices of Colombia-focused O&G E&P publicly traded companies lies well below where it was on May 1st, 2022 when the prospect of a Gustavo Petro presidency seemed distant.' Hydrocarbons Colombia 29th July 2024:

Share Price Performance since 1/5/2022

+90% - Arrow Exploration

-37% - Colombian Focused O&G Index

-41% - Frontera Energy

-45% - Ecopetrol(NOC)

-48% - Parex Resources

-51% - GeoPark

-61% - Grand Sierra

-77% - Canacol

Suspect the recent oil price pullback will be of far greater concern to long only short term traders than well researched 'buy and hold' investors. Why?

The management's compelling investment case for the Angolan assets was based on 18,000 bopd gross production, an average $50 oil and a break-even of $35/bbl.

With oil in the $70-$80/bbl range and base production at 23,000 bopd gross, the company offers a highly compelling value/growth investment opportunity - plus huge 40k bopd gross upside potential from these low development cost, capex starved assets.

Afentra's Valuation Summary of the Block 3/05 Deal:

* $70-80/bbl oil has potential to deliver >50% value increase

* Asset Upside potential provides an additional 30% value increase

* Robust asset economics with a breakeven of $35/bbl

* Potential to improve and maintain Opex @ $20/bbl

* Every 1% increase in recovery from OIIP of 3 billion bbls delivers 30 mmbbl

* Minimal Capex required to realise 2P case of 115.2 mmbbl

* Significant upside from 2C & 3C resources with potential for further upgrades

At $75/bbl oil, Afentra's 3/05 and 3/05A working interests have the potential, after adjustment for the financial benefit accrued from the effective economic date of the asset deals, to annually throw off free cash in the range of 7-9 times the final $9.7m net price paid for the assets(after adjustments), at the current 23,000 gross bopd level of 'base' production, which the block's owners believe can be maintained for well over a decade, at a very low capital and operating cost.

However, these very high quality 3.5bn bbls of OIP mid life assets have a gross circa 17,000 bopd of further low cost production growth potential over the next 5-7 years.

About which McDade in a recent S&P Global interview said, 'Afentra and its Block 3/05 partners Sonangol and France's Maurel & Prom, recently renewed the license to 2040, and would boost production on the assets in several ways, including by stepping up water injection, conducting heavy workovers, replacing gas lift with electronic submersible pumps and drilling new wildcats.

"There are over 150 wells of which only 60 are active. So we're working our way through the well stock," he said. "There haven't been any wells drilled on any of these fields for over a decade. There are lots of infill well locations, but also...four discoveries sitting there ready to be developed."

"If you were to do all those things over the next 5-7 years, we think this asset could get up towards 40,000 b/d," he added. That would represent roughly 13,000 b/d net for Afentra.

McDade said the company was eyeing three avenues for growth: a production boost on its current acreage, acquiring additional licenses in Angola and entering new African jurisdictions.

"We said we want to be a multi-jurisdiction operated and non-operated portfolio of tens of thousands of barrels per day." '

AIMHO/DYOR

Appalling results but, more or less in line with my expectation.

So, to increase revenue by 12% YOY, saw the operating costs go up by 71%!

As in previous years, NO economy of scale operating cost savings as the cargo handled increased!

Only port I've ever come across where the costs increase much faster than the revenue generated as the tonnage handled through the port increases. This occurs every year at Karanja!

Coal and cement cargoes attract extremely low handling rates and so are usually shipped through purpose built terminals with automated handling equipment.

As mentioned previously, handling these low value cargoes at a circa '$200m' build cost and still only half built break bulk terminal like Karanja is extremely expensive - NO PORT OPERATOR IN THEIR RIGHT MIND WOULD DO IT!

Even were they to handle 10 million tonnes (7 times more than last year) they would still only generate a pittance in total revenue. Dirty, low handling rate bulk cargoes are rarely shipped through break bulk cargo terminals for a very good reason - it's almost impossible to make any money from them!

The going concern situation is to be expected, as next years operating performance WILL be worse than this year based on the expected small ramp up in bulk cargo volumes, as they have simply replaced one customer who was renting storage and use of the quay (ie MPL received revenue but had no costs), with more low handling rate bulk cargo, that has very high handling costs at a port terminal like Karanja.

Totally uninvestible - the equity has been worthless since they somehow managed to 'spend' $45m one year before they got onto the foreshore to start reclaiming the land on which to build the terminal !

My estimation of the current value of the terminal is around $25m - if you believe the books(and only an idiot would) they have 'spent' close to $200m part building Karanja Port over the last 10 years!

AIMHO/DYOR

New Presentation - Carrizales Norte: Horizontal Well Program - Page 16

The HZ-1 result was transformative and greatly enhanced an already highly compelling investment case.

In light of this result, incredibly, the management's revised horizontal well drilling programme on page 16 of the new presentation offers the prospect of a further highly material enhancement to the investment case. Why?

The scale of the Ubaque Main Sand Structure Map suggests the following:

HZ-1 - 662m lateral length - 11% longer than 560m modelled length

HZ-2 - 820m lateral length - 46% longer than modelled length

HZ-3 - 1,045m lateral length - 87% longer than modelled length

HZ-4 - 883m lateral length - 58% longer than modelled length

That's a total of 1,170m of additional lateral length planned for the first 4 horizontal wells than originally proposed and modelled - this is equivalent to drilling more than two additional 560m horizontal wells, without most of the drilling cost together with a saving of two drilling pad slots.

AIMHO/DYOR

Hi viable - Ref: Vivian and Cushabatay - in no great detail. Came across them when carrying out ongoing research into my 3 year held PTAL investment.

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

Angola's new Incremental Production Project providing incentives to O&G companies to produce additional volumes bears early fruit, as Block 15 partners, Exxon, Azule and Sonangol make a new offshore oil discovery.

ExxonMobil(Azule Energy and Sonagol) hits oil offshore Angola and takes steps to search for more hydrocarbons - Offshore Energy - May 15th

https://www.offshore-energy.biz/exxonmobil-hits-oil-offshore-angola-and-takes-steps-to-search-for-more-hydrocarbons/

Seeking Alpha post from Analyst Robert Whelan on news of the Government approval of the Azule Deal.

'Fantastic news this morning. Afentra have received the third government approval from the ministry of energy in Angola. This paves the way to completion of the final 12% of Block 3/05 and will add to the already completed 18%.

Production currently up from 18,100 2023 average to 23,100 bopd gross (30% or 7,000 net to Afentra ). 2023 estimated asset level cash flow to Afentra was $67.4 million so looks like 2024 will beat that easily. (better economic terms from 01 Jan 24 also).

Not bad for a company with a market capitalisation of £105 million!

Keep your eyes on this company folks'

Some may remember Robert publishing an incredibly well researched and balanced Seeking Alpha article back in December 2023 setting out the investment case for Afentra - its well worth a read for those that may have missed it, or for a refresh, as Robert knocked the ball out the park with the quality of his analysis.

Afentra Acquired Assets Worth $255m, With Only $37m Cash: Here's How:

https://seekingalpha.com/article/4657827-afentra-acquired-assets-worth-255m-with-only-37m-cash-heres-how

That's mostly long only momentum traders scalping a good lunch.

Whereas, the well researched here who have used the pullbacks to average up as the investment case continued to strengthen, have been handsomely rewarded.

With many now sitting on or close to a one bagger paper profit, with plenty more to come, as the share-price is currently sitting at a price offering at least as much 'value' as when they first bought, such has been the progress made by the management in growing the business over the last year.

AIMHO/DYOR