Arrow Exploration Share Discussion Threads

[eaglehaslanded] 24/3/2024 16:33

Regarding Canacol possible divestment:This is an issue that we have been recently made aware of. We are looking for a solution, and once we have a solution in writing we will be disclosing to the public. ThanksJoe

[upwego] 24/3/2024 16:11

Rocky
Would be hard to predict as both have so much potential. Will stick it here
Axl 25.5
Save 26.25

See what happens year end. 😮

[mount teide] 24/3/2024 10:26

11% - 'blow off' tops typically occur when valuations have been driven up in free markets into the stratosphere.

As when Capesize dry bulk carrier charter rates hit $235,000/day at the peak of the last shipping market cycle.....a charter rate at which you could have a new ship built with a 25 year commercial life for barely 1 year's cash flow!

Less than five months later Capesize rates had dropped to $2,500/day in the highly cyclical boom and bust shipping industry.....and then went on to average around the daily operating cost of around $8,500/day of these ships for the next 5 years........which resulted in the equity valuations of most of the dry bulk sector's shipping companies dropping by an average of 98% peak to market cycle trough some 5-6 years later.

Considering AXL's excellent fundamentals and very modest valuation multiple compared to its peers, and in particular the other sectors that comprise the main equity indexes - to this observer, albeit one perhaps with a vested but well researched interest, I don't see a 'blow off' top but a company well positioned to deliver a low cost, very strong production and cash flow growth performance over the next 12-18 months.

AIMHO/DYOR

[11_percent] 24/3/2024 08:50

Last week looks like a blow-off top......we have have had a few of these in the past.



free stock charts from uk.advfn.com


And there is a gap down there at 20p odd.


free stock charts from uk.advfn.com



On the other hand......that was one heck of a video......stream of news this year........if they care to release it and not bottle it up.

[moonshot3] 23/3/2024 15:40

Thanks MT & KS. Useful information and helps to estimate the scale of drilling success required to achieve a target production of 6,000 bopd by the end of the year. Although, I guess, what will be, will be!

[mount teide] 23/3/2024 15:06

KS - makes a lot of sense( a point MA was making) - and bodes very well, since the Ubaque pay zone is at least three to four times thicker than the average C7 reservoir, and contains highly viscous, very heavy crude oil, which should present a much greater barrier to water ingress than the light, very mobile crude oil found in the C7 sands.

[king suarez] 23/3/2024 14:43

Would that not make sense given you are in theory drilling futher away from the OWC in a horizontal (towards top of reservoir) so not getting as much water inflow as quickly?

[mount teide] 23/3/2024 14:38

M3 - while the vertical well decline rate for the C7 under reservoir management in year 1 is around 30%......if it continues to follow the projected decline curve, it should drop to around an average of 20% per year in years 2 and 3, before slowing further. I recall MA previously mentioning an average decline rate for the Colombian production of circa 15% per year.

The decline rates for horizontal wells drilled recently in the Llanos Basin appear to have been slower than the verticals.

'A total of five horizontal wells were drilled and put on production in full-year 2023 and are currently producing approximately 10,060 bopd gross in aggregate.' .....Geopark/17th Jan 24 Update

This indicates Geopark exceeded an average of 2,000 bopd gross per well and are probably experiencing a materially slower decline rate than the vertical wells.

[king suarez] 23/3/2024 14:21

Yeah, in the interview (where talking about potential water cut) he says that the horizontals will be drilled about 70ft above the OWC, so hopefully no water initially (first 2-3 months). He then expects water will show up and the wells will start to decline at 2-3% per month before 'flattening out'.

I don't think existing production will be declining at a rate as high as 30% a year as presumably a lot of it will have already flattened out and stabilised - and will thus be declining a lot slower?

[moonshot3] 23/3/2024 13:36

At 3% decline per month that is roughly 30% decline per year. Does the decline rate plateau at some point - presumably yes? If 3,300 exit at 31/12/2023, then 30% decline gets us to 2,310 at 31/12/2024. So to get 6,000 bopd by 31/12/2024, assuming production built evenly over the year, we need additional production of say 3,690 x 100/83 = 4,445 (allowing for decline rates). Does that sound about right ?

[mount teide] 23/3/2024 11:05

BTB - 'Those shareholders who are here for Marshall to repeat what he has done 7 or is it 8 times before, will not be concerned. What hazard can there be if nobody can form a concert party and steal the company on the cheap. Besides which, having MA and his team as friendly advisors post sale must be of value.'

Exactly Buffy.......the AXL comments by the Canacol CEO like:
"Arrow has a very aggressive development plan scheduled for this year. We expect to see very good growth in their share price." and
"They've done a great job. Their share price has increased significantly recently and about 350%, I believe since they listed on the AM Exchange a couple of years ago."

are excellent PR for AXL, and are likely to have Canacol's more inquisitive shareholders and some of the wider small/mid cap energy investment sector take a look at the company.

Arrow's current modest valuation, aggressive low cost, low risk production development plan to double production again in 2024 should make interesting reading, particularly when considering the production and capital growth delivered since AXL's Q4/2021 London IPO relative to their peers:

Capital Growth:
+327% - Arrow Exp
+38% - S&P 500 Energy Index
-56% - AIM Energy Index

[11_percent] 23/3/2024 10:58

"WOW a brilliant interview and full of golden nuggets.".....I will second that...what a stoncker of a video.....long and full of detail.....with explanations.


Clickable.



Just a FEW things I picked up on......note recorded on 19/03/24.

# Exited 2023 at 3,300 bopd.

# Drill a vertical well every 3 weeks.

# Horizontal well spud in the next 3 weeks.....3 weeks to drill and put on production.....then monitor....and optimise flow rate with downhole pump.

# CN-5 well results confirmed the extension to the reservoir that was confirmed by the previous CN drills......will add 2x the reserves confirmed in the wells previous to CN-5.

# "CPR in the next 10 days"......Mandated by the Regulator in Columbia the a CPR be produced before the end of March 2024, for the status at year end 2023.
Recorded on 19/03/24.....so CPR issued by 29/03/24.

This CPR will not include the 2x reservoir proved up by the CN-5 well.

# Likely issue an other CPR report mid 2024....to include the Ubaque extension found by CN-5.

# Is now marketing the company.......been in London the last 10 days talking to investors....IIs and High Net Worth Individuals....."happy shareholder base"

2 days in Switzerland talking to investors.

Active PI involvement in AXL.....that's us.

The AXL story starting to be picked up in Canada.

# Wells decline at 3% per month.....this is a conservative figure.

[eaglehaslanded] 23/3/2024 10:55

Is there not a March deadline for the reserve update by Canadian rules?

[rockyride] 23/3/2024 09:48

Upwego - hopes you're well matey and be interesting which makes us the most money by the end of 2024 between the 2 we have in common!Last one for a while I promise. The CRUX interview was recorded on 19/3/24 and released on 21/3/24 so I am still expecting the reserves update sometime in the next 4 sessions and before Good Friday.Take care buddy.

[upwego] 23/3/2024 09:43

A little pull back here and there is expected, but I have to say MA is very impressive and certainly knows his onions. I think reserves report may well be 1st week of April as he mentioned in the next 10 days hopefully net week but could be the week after.

I`m loving the story and enjoying what they talk about an delivery. Sure is a fantastically well run company and for the oil sector you could not ask for more.

[rockyride] 23/3/2024 09:29

PS - off on holibobs for 3 weeks now so I'll give you all a rest from my boring diatribe. Will pop in now and again and only contribute if I cant resist.Be good and stay safeGLACIAO

[rockyride] 23/3/2024 08:55

Just listening to the interview and it looks like CN6 is drilled sand has been a big success. This next update is going to be very juicy and still holding out for Q1 30p but that may be a bit too optimistic after yesterday.

[rockyride] 23/3/2024 08:39

He's busy with media. Another 23 minute interview recently done with Crux, I've copied the link and the upcoming catalysts listed below:-https://www.cruxinvestor.com/posts/arrow-exploration-the-low-cost-producer-positioned-for-significant-growth-in-the-llanos-basinUpcoming CatalystsLooking ahead, Arrow has a busy pipeline of catalysts for investors to monitor in 2024:Updated competent persons report (CPR) expected in late March to incorporate year-end 2023 reservesVertical well drilling results across the Carrizales Norte and Tapir blocksHorizontal well drilling results beginning in Q2, with productivity monitored over a 2-3 month periodExploration drilling at the Baquiano and Mateguafa prospects, which have "significant reserve upside" according to AbbottQuarterly production and cash flow updates as Arrow progresses towards 2024

[buffythebuffoon] 23/3/2024 08:13

‘Hopefully if you are right it will be without hazard to us shareholders’

Those shareholders who are here for Marshall to repeat what he has done 7 or is it 8 times before, will not be concerned. What hazard can there be if nobody can form a concert party and steal the company on the cheap. Besides which, having MA and his team as friendly advisors post sale must be of value.

The issue about what assets you sell is often a tricky one for companies. Maybe the best asset is the only one that can achieve the lump sum they need or indeed may be the only one saleable.

Buffy

[here and there] 23/3/2024 08:12

I found this Arrow references in the Canacol transcript

'In terms of additional liquidity, we do have, if you recall, an investment in Arrow Exploration that of course was the company that we sold our oil assets to in the fall of 2018, I believe. They've done a great job. Their share price has increased significantly recently and about 350%, I believe since they listed on the AM Exchange a couple of years ago. We hold 21% of that company, roughly 60 million shares. That equates to about $20 million, it's non-core and that's a position that I could sell into some strong handed shareholders of theirs.’



And this,

And are you expecting any substantial changes in working capital either positive or negative?

Jason Bednar

Not particularly. I guess a disposition of Arrow shares would be roughly a $20 million for working capital.




And this,

Albert Chang

And just lastly, can you share any color on where your cash balances are now and where you see it at the end of the first half? And it also be helpful to know if you had any indication of interest or at least soft conversations with respect to that potential Arrow stake sale?

Jason Bednar

Yes, I mean the current cash balance I already answered was $30 million and there's abundant interest.

Charle Gamba

Let me just clarify that last point with respect to Arrow. We've held a position, a very good position, very happy with our position.

Albert Chang

And the full time at 48 to 63?

Charle Gamba

Sorry? Sorry about that. Anyways, we're holding -- we've held that position for a long time. We're very happy with the position. Arrow has a very aggressive development plan scheduled for this year. We expect to see very good growth in their share price. So, we continue as we always do to evaluate our position with respect to Arrow Holding.



Those were all the references to Arrow



Effectively, their Arrow stock is a balance sheet option. They don't need to sell it as they still have cover but it could be an option one day to sell it to an exisitng II. The CEO's concluding remark is very very encouraging

"Arrow has a very aggressive development plan scheduled for this year. We expect to see very good growth in their share price."

[rockyride] 23/3/2024 08:07

HAT - excellent post

[here and there] 23/3/2024 07:42

Canacol are very supportive shareholders and they have a representative on the board.

They will not be on market sellers.

If they sell (which I believe is highly unlikely.....you don't sell your best performing asset which is destined to continue to out perform) it would be in a block to a II or another in country oil and gas company who perhaps have designs on the company as a whole.

Arrow has had plenty of in bound interest since the CN discovery and more since the Noroeste additional discovery. There is so much running room in the Tapir block.

If we get to 5500-6000 bopd by year end they will be FCF $5-6m p/m. That would mean they could run 2-3 rigs through 2026. A 15-20 well campaign and a $50m plus budget to drive us towards 100000 bopd.

Remember they have enough running room to drill through to end of 2027 and they have two exploration wells going down this year and will be shooting fresh 3D so that running room will no doubt get extended.

I suspect we will be bought out at some stage over the next 2/3 years whilst the inventory is still strong and long dated.

I am also quietly confident the 'administrative issues' that are lurking behind the Osso Pardo delays will get resolved this year.

[mount teide] 22/3/2024 23:51

Canacol Q4/23 Results - 21 March

Dividend - 'The Corporation has discontinued the quarterly dividend in order to strengthen its balance sheet'

2023 Annual Dividend is equivalent to a 21% yield on today's closing share-price.

[royalalbert] 22/3/2024 22:39

Swanvesta nothing wrong with being conservative with figures.