Arrow Exploration Corp
Ticker: AXL
Share Price: 8.6p
Market Cap: £18m
Shares in Issue: 210m
Current Production: 1,320boepd
Cash: £8m (Feb 2022)
2P Reserves: 7MMBOE
Fully Funded Business Plan
Arrow Exploration (LON:AXL) is a dual listed (London and Toronto) Oil and Gas company with an under explored and under exploited portfolio of Colombian oil assets that offer high potential growth. It is clear from the recent company interviews that the Arrow management team see huge potential for growth in Columbia.
Arrow Exploration also have very attractive and rewarding assets in Canada, and announced in December that they now have the West Pepper asset online and with option to tie in the East Pepper O&G well also this year, there is 1.8 Tcf of gas initially in place in Arrow’s Montney Canadian play. The company indicates it may “look to monetize its Canadian assets as M&A activity is currently robust”, this would be to focus more on the oil opportunities they clearly see in Columbia.
The current company production as we stand is 1,350 boepd, split at Columbia Oil production of 545 barrels per day and Canada 805 boepd.
The Arrow Exploration business plan is clearly to expand oil production from some of Colombia's most active basins, the company notes how supportive the Columbian Government is of the O&G industry, with attractive fiscal terms and in an environment with strong pricing based on Brent less the vasconia differential of $2-$4/bbl. The Brent linked pricing exposure combined with low royalties yield attractive potential operating margins. Taking into account the favourable fiscal terms and net back, Arrow is focused with a fully funded campaign on low risk infill and development wells and indicate these wells could potentially come online at 1,000-2,000 barrels of oil per day. If this level of success does happen the result would be a material addition to the current level of production and cash flow. Arrow is targeting over 3,000 boepd near term and 10,000 boepd via the assets they currently hold.
The Columbian drilling campaign spuds the first week in March, with 2 weeks to complete the drill and then immediately 2 weeks to test and onto production. The pad can accommodate the opportunity to drill an additional 4-6 wells, which on the result of the first two wells I am sure they will pursue if successful.
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