Arrow Exploration shares climb 43% in recent developments

Following two upside years on the markets Arrow Exploration Marshall Abbott, tells IG that the company is one of only a handful of such share performances on AIM. Since listing the company has seen 11 out of 11 wells drilled successfully in 2023 and the up and coming 2024 work schedule is committed to a further 15 wells. $45m million has been allocated for the schedule. Meanwhile, in the longer term there is also a plan to reach production of 10,000 bpd.

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Arrow Exploration, a company listed on the London AIM and Canadian Venture Exchange, has seen its share price increase by over 40% in the past few weeks. Its latest results in Colombia show strong momentum. The CEO, Marshall Abbott, says the company has had a successful couple of years and is one of the few companies that have performed well on AIM. Arrow Exploration conducted an IPO for $15 million and is currently producing about $2.5 million per month on the Tapir Block in the Llanos Basin. Their goal is to reach 10,000 barrels a day within three years.

Recently, drilling at Carrizales Norte led to a significant discovery of potentially 40 million barrels. The company plans to drill 15 more wells by year-end with a budget of $45 million. Abbott explains that the company doesn't need to raise any more money and expects to have around $13-14 million in cash by the end of the year. The company has reliable drilling procedures and minimal above-ground risks in the area. They plan to drill horizontally, which offers big advantages in terms of productivity. Abbott expects to produce wells at 2,000 barrels a day, with pay-outs occurring in 2 to 3 months.

Arrow Exploration conducted a 3D seismic survey last year, revealing a significant amount of potential. They plan to allocate and use their money based on these results. This year, they will primarily drill low-risk development and infill wells, aiming to reach one thousand barrels a day net for horizontal wells. Abbott is happy with the company's share price, as their forward-looking cash flow multiple is far less than two times cash flow.

In terms of the oil market's future, Abbott believes the lack of exploration spending and predicted increase in consumption will lead to higher oil prices. While he is comfortable with prices ranging from $70 to $90, he does not want to see prices exceed $100, as it would negatively impact the economy. The company also has minor assets in the middle Magdalena Valley in Colombia, where it produces about 200 barrels a day. If they receive an extension for that block, the share price is expected to rise.