Oil Exploration Corp. Provides Update on Well Progress

Arrow Exploration Corp. (AXL:TSX.V; AXL:LSE) announced in a press release on February 20, 2024, that it has an update on its Columbia-based CN-4 well. The well, which the company reports reached its target depth on January 27, 2024, is targeting the Ubaque formation.

The company reports that the well has a flow rate of 780 barrels per day, and produced 758 barrels within a 12 hour period. Arrow stated that the oil has a gravity of 13 degrees, as measured by the American Petroleum Institute.

The update also provided information on the CN-5 well, which will gather data for Arrow on the Carrizales Noroeste prospect. The well reached its total depth on February 14, 2024, at over 9,000ft. While the well has not reached production, like the CN-4 well, it should be ready within the next several weeks.

The CEO of Arrow, Marshall Abbott, stated, “The thick pay zones encountered in the CN-4 and CN-5 wells underpins the step change in value that has been created. The company expects material reserves additions and production from further development of the multizone potential at Carrizales Norte.”

He continued, “The defined Ubaque reservoir has set the stage for conventional horizontal exploitation, which we expect to lead to material production, cash flow and reserves growth. Additional pay zones currently behind pipe provide further opportunities for production and reserves increases in the future.”

Oil and Diesel Looking to Move Upwards

Charles Kennedy, with Ahead of the Herd, reported on February 7, 2024, that he expects the oil market to recover from a temporary slump soon as a result of rising energy consumption. He commented, “As manufacturing activity improves, however, diesel demand begins to increase in lockstep.”

Technical Analyst Clive Maund released a report on January 20, 2024, that stated that oil could breakout in the near future.

Maund commented, “Because oil looks superficially like it is still trending lower, this base pattern is easy to miss as it is somewhat camouflaged, but what ‘gives the game away’ is the marked improvement in momentum coupled with persistent heavier volume this month to date.”

206% Return

On January 9, 2024, Stephane Foucaud with Auctus Advisors gave Arrow a target share price of £0.55, with a potential return on investment of 206%. He commented, “The rerating thesis rests on Arrow’s steep production trajectory along with the exploration of 37 million barrels of gross prospective resources.” The report identified upcoming 2024 drill results from the company’s Carbonera property as a major catalyst for the company.

In an updated February 20 research note, Foucaud gave a new target price of £0.60, saying, "As we increase our chance of development of Carrizales Noroeste from 25% to 50%, we are increasing our target price from £0.55/sh to £0.60/sh."

In terms of catalysts, the company reports that well CN-6 will begin drilling operations when CN-5 begins production and operations for OP-3 and OP-4 are expected to commence in Q2 of 2024.

Ownership and Share Structure

Refinitiv provided a breakdown of the company’s ownership and share structure, where management and insiders own approximately 11.02% of the company.

According to Refinitiv, Director Tim Leslie owns 5.95% of the company with 17.01 million shares, Chairman Gage Jull owns 2.10% of the company with 5.99 million shares, CFO Joseph Eric Mcfarlane owns 2.03% of the company with 5.80 million shares, and CEO Marshall G. Abbott owns 0.94% of the company with 2.68 million shares.

Refinitiv reports that institutions own 31.56% of the company, as Canacol Energy Ltd. owns 21.01% of the company with 60.07 million shares, Edale Capital L.L.P. owns 7.01% of the company with 20.05 million shares, Yackman Asset Management L.P. owns 2.75% of the company with 7.85 million shares, and Spreadex Ltd. owns 0.79% of the company with 2.25 million shares.

According to Refinitiv, there are 285.86 million shares outstanding with 192.05 million free float traded shares, while the company has a market cap of CA$77.26 and trades in the 52-week period between CA$0.26 and CA$0.43.

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