Arrow Exploration Share Discussion Threads

[eaglehaslanded] 29/2/2024 18:41

There is a new buyer in Toronto tonight.Echelon wealth partners, they have bought 142k so far. Anyone heard of them?

[jailbird] 29/2/2024 17:54

Hi, here is something I thought you might find interesting: - Oil news gets more bullish https://uk.investing.com/news/commodities-news/global-oil-demand-to-grow-by-19-million-bpd-in-2024-says-wood-mac-3360159

[rockyride] 29/2/2024 15:31

Maybe we are testing our first GUSHER

[buffythebuffoon] 29/2/2024 08:27

Hi TTB,

Still can’t get Slater’s aphorism out of your head eh? :>}

Buffy

[pastybap] 29/2/2024 07:07

Neither PE or PEG are ideal for valuing O&G companies. NAV and DCF are more relevant.

[here and there] 29/2/2024 06:55

Good healthy discussion everyone. This is what BBs are supposed to be about and are largely not. Apart from 2/3 knockers (who will no doubt re-emerge at some point) this has been a very healthy BB and worth keeping an eye on.

[taurusthebear] 29/2/2024 06:27

Too simplistic to compare a company 20 times the size of AXL with their respective production figures. PE is not the metric here, but PEG. In a nutshell, it's easier to double an ant than an elephant...

[king suarez] 28/2/2024 23:11

Yes, so the AXL netback of $60.62 @ $92.59 Brent compares to $48.97 for PAREX at $85.92 Brent.

If you compare at the same Brent price of $92.59 it would be $60.62 for AXL and $55.64 for PAREX - not too dissimilar really - and PAREX is part gas, whereas the AXL figure quotes only the oil - the netbacks on AXL gas are poor at current gas price.

They look to be operationally v similar metrics, as we might expect operating in the same area?! However, AXL currently have much cheap value add production growth as MT's posts have highlighted.

[rockyride] 28/2/2024 22:53

I was given this from the company on 13th Feb but it is quoting the actual numbers from Q3 2023 when Brent was about 10 bucks higher than at the moment:_In Q3 our netbacks from our Financial Statements are as follows: Brent (3 month) $92.59Revenue net of transportation $77.63Royalties $9.54Operating Expenses $7.56 Crude Oil netback $60.62 This netback includes our heavy oil at CN-2 9Ubaque), our Oso Pardo production and our Tapir light production (C7).

[rockyride] 28/2/2024 22:19

Always low volume in Canada but the share price has been creeping up in the background. Nice to see the last few late deals of the day all at the full ask of CAD40c = 23.25p at fx 1.72. We should soon see a tick up over here with a mid price of 23p to 25p beckoning.

[the_gold_mine] 28/2/2024 20:13

Regarding the PAREX comparisons, an important point not discussed is netbacks and profitability.

From review of the PAREX latest investors presentation PAREX netbacks are way lower than Arrows ($29 to $31 netback at $75 Brent).

hxxps://parexresources.com/wp-content/uploads/2024/01/PXT-Investor-Presentation-February-2024-FINAL-1.pdf

Arrow reported netbacks of $60.62 during Q3 last year.

Arrow is a lean, mean cash flow machine.

[eaglehaslanded] 28/2/2024 15:22

Upcoming press releases will address CN-5. ThanksJoe

[royalalbert] 28/2/2024 14:58

So will we be expecting some interesting news before the 14th??

Interesting read regarding Parex, thanks people.

[buffythebuffoon] 28/2/2024 10:27

I nabbed AK as he left the hall before the next presentation. I had him one to one for 15 mins then one by one people heard he was outside and joined. Good to know MA stayed on. He always struck me as someone who would give his time freely when he could.

Buffy

[here and there] 28/2/2024 10:19

If you get a chance to meet management face to face it is always worth making the effort.

Management are in town every 6 months doing the rounds. II and HNW meetings. Meet new investors, brokers etc.

[king suarez] 28/2/2024 09:34

Buffy - last time I went MA stayed after the presentation for a good hour or so chatting to people so could ask quite a few questions, which was useful!

[buffythebuffoon] 28/2/2024 09:29

I went to listen to Andrew Knott there when they were SAVP. It’s put me off traipsing around London when I’m only interested in one company. If it’s a social affair with a meet up afterwards then it’s ok.

You can view the presentation afterwards if you’re registered;or at least used to be able to.

Buffy

[rockyride] 28/2/2024 09:21

Looking good with tight spread 22.7p / 22.85p

[king suarez] 28/2/2024 08:26

Arrow presenting in London again 14 March (same place I went to last time):



Anyone fancy going?

[mount teide] 28/2/2024 07:52

RR - some of the 35 wells are expensive onshore exploration wells - part of a major new exploration project being carried out in conjunction with state oil company Ecopetrol, on a 50/50 basis.

From the information provided by Parex, I would estimate the Capex budgeted to build the additional infrastructure, where required, drill and complete just the production development in-fill wells in 2024, is around 75% ($309.4m) of the mid range total Capex figure of $412.5m.

AIMHO/DYOR

[rockyride] 27/2/2024 22:58

MT - thats a hell of a lot of CAPEX for 35 wells and taking the mid price CAPEX budget of $412.5m, thats nearly $12m per well compared to our $3m average per well. Also if they are only forecasting to get 3kboped incremental production growth, they much be suffering some hefty declines across the rest of their PF.

[mount teide] 27/2/2024 20:53

Parex - Interesting to note that Colombia's largest Independent, currently producing 53,200 boepd, is planning to increase production by 3,000 boepd in 2024, with a Capex budget expected to be between $375m and $450m.

Arrow - producing around 3,000 bopd, is also planning to increase production by a similar 3,000 bopd in 2024, after accounting for a circa 15% field decline rate, with a Capex budget of $44m

Capex 2024
$412m - Parex (9.2 times larger but, targeting the same 3,000 bopd growth)
$45m - Arrow

On a production growth cost per boepd - it makes AXL look a highly accretive acquisition target even at double or triple the current valuation, considering it's organic, low risk, low cost, upside production development potential.

Market Cap
$2.60bn - Parex (27 times larger)
$0.09bn - Arrow

Both debt free, funding their entire 2024 Capex budgets from cash and FCF.


Parex - Three Year Plan (2024-2026)

Production Growth
* Target of 5% (3,000 boed) Annual Production Growth
* Targeting organic growth from operated assets

Capex - 2024
* $375m - $450m
* 35 Development and Exploration wells
* Mostly targeting the Llanos Basin
* Continuation of the horizontal drilling programme based on the 2023 success

Interesting to note that Parex very successfully substituted vertical for horizontal wells in the Llanos Basin in 2023 in both its light oil(C7) and heavy oil reservoirs - and is planning to increase the use of horizontal wells in 2024.


Llanos Basin - Parex has successfully substituted vertical wells for horizontal:
LLA-34 (55% W.I.): In Q1 2023, the first ever horizontal well was drilled at LLA-34 to a vertical depth of roughly 14,000 feet and a horizontal lateral of approximately 1,300 feet. Currently the well is producing approximately 3,000 boe/d gross of heavy crude oil, with Parex and the operator evaluating drilling additional horizontal wells on the block. LLA-34 currently has four drilling and four rig workover rigs in operation.

Continued high performance from the first horizontal wells at Cabrestero (100% W.I.) and LLA-34 (55% W.I.); a second horizontal well at LLA-34 was recently completed and put on production; horizontal wells in the Southern Llanos represent new development opportunities for Parex to efficiently maximize recovery and production rates.

Southern Llanos – After successfully substituting traditional vertical wells for horizontal wells at both Cabrestero and LLA-34 (55% W.I.), Parex has identified a multi-year inventory of horizontal drilling locations across the Llanos basin to increase recovery factors.

[lexion] 27/2/2024 19:33

My read across at 3000popd would be £80 m market cap - or yr end 24 9000bopd - with good tail wind £250 m mkt cap - a 4 bag from here. We are cheap bring it on !

[hpotter] 27/2/2024 17:51

Parex Resources have a Feb '24 presentation which states their market cap at end Dec '23 was C$2.6 Billion. Average Prodn 57,329boe/d, Div Yield 6%.

[rockyride] 27/2/2024 17:49

KS - assume it was $1bn, what would you think that means to Arrow from your 'read across'?