Arrow Exploration Share Discussion Threads

[78steve] 30/8/2024 11:14

Double trouble property prices have also tanked now and so will have to fork out from own pocket to pay higher CGT if you already have high BTL mortgage on selling up. No point having any ambition in UK most of your wealth will be taken in taxes and CGT's

[mount teide] 30/8/2024 11:10

RR - 'you’d be able to sell SAVE at a big loss'

Hope not, as even AK's legendary skills for depressing share-prices might struggle on re-admission to deliver that scenario, as fortuitously, my average SAVE buying price is circa 9p.

[pastybap] 30/8/2024 11:07

Lets not forget, nothing is sacred with this lot of communists. And that includes ISAs and SIPPs.

[rockyride] 30/8/2024 10:52

Be fine if you hold SAVE as well as the well performing stocks as you'd be able to sell SAVE at a big loss (if they are bloody trading again by 30th Oct) to net off your capital gain exposure - LOL only joking MT and Upwego, hope you're not reading this PMSL

[mount teide] 30/8/2024 10:45

Labour Autumn Budget - an equity buying opportunity?

One announcement looks absolutely certain: a big increase in capital gains tax, with the main rate of 20pc on any profits you make on an investment increased to 40pc or perhaps even 45pc.

Investors with substantial portfolios of equity investments outside of an ISA or SIPP, could well be net sellers of their better performing stocks in the run up to the Budget to book the gains as quickly as possible.

AIMHO/DYOR

[mount teide] 30/8/2024 10:10

drf - 'To my mind - the share price could double from where it is now, and you could make the case that is still too cheap based on what we have now and what is likely to occur in the next few months. Now thats the kind of investment case I like.'

Man of my own heart!

The results of the first three horizontal wells has elevated the already compelling investment case - self funded annual doubling of production from vertical wells - into the stratosphere at the current valuation. Since investors are now getting 3-4 times more production and cash flow from horizontal wells for virtually the same capital outlay and ongoing operating cost of drilling a vertical well!

AIMHO/DYOR

[the_gold_mine] 30/8/2024 09:54

3http... Maybe the rates in the presentation are the rates they get immediately after starting the well (instantaneous reading upon opening of valves and first start of pump), as you know they normally wait a few days until the rates have settled out before reporting. So it could be that both are correct.

[dunns_river_falls] 30/8/2024 09:51

Do we really want them to let the well flow at maximum rates and compromise the long term recovery rate? I am inclined not to hold their feet to the fire over what is an almost impossible to accurately predict IP rate, and I will forgive a little hubris when the company is making c.$400k - c.$250k net TODAY. This company is currently valued at <1.3 P/DCF - which is pretty much as cheap as it has been all year. They are on course to finish the year in an incredibly strong position, funds growing at $1.2m per month and increasing with each well online. I would imagine that c.$20m net cash by EOY is a very real proposition now. To my mind - the share price could double from where it is now, and you could make the case that is still too cheap based on what we have now and what is likely to occur in the next few months. Now thats the kind of investment case I like.

[tom111] 30/8/2024 09:37

Good question, someone with better knowledge maybe can answer your question

[3http] 30/8/2024 09:24

Looking at the 06/2024 Presentation, the company anticipated Gross initial IP of (3641, 3913 and 4565 respectively for CN1, 3 and 4) against the 3150, 3038 and 2500 (still rising and should reach ~ 3k) achieved. Yet each well results RNS has implied/stated rates ‘exceeded expectations’. Is this because the flow is being restricted? Are the well results so far really as good/better than anticipated?

[king suarez] 30/8/2024 07:46

Yep, thanks. Have a holding in PTAL also.

[rockyride] 30/8/2024 07:29

So 10 horizontal wells coming on at 3k gross could well still be producing 1.1k gross in year 10.So with our 50% interest in these wells we could be seeing 10 x 550 = 5.5kboepd in year 10Not that I expect Arrow to be still around in 10 years time but it does paint a good picture and builds on to what RA previously posted

[royalalbert] 30/8/2024 07:00

KS, PTAL use this principle, i.e new wells make up for the fall. Also the decline rates taper off, so in reality the more wells flowing over time with new wells coming onstream production increases greatly.

Words to that effect I think.

[moonshot3] 29/8/2024 20:07

I reckon we've lost 186 (1,931 - 1,745) since 31 July on other production - about 10% decline. On 31 July we had 4,560 comprising 2,629 for Horizontals (1,110 + 1,519) plus other production of 1,931. On 29 Aug we had 5,000 comprising 3,255 for Horizontals (1,045+ 960 + 1,250) plus other production of 1,745.

[king suarez] 29/8/2024 19:09

RR - yes, you're right. I read the average figure as the current.

Also a good observation about declines elsewhere - the RCE verticals must have declined quite a bit in the year to explain this drop?

Ubaque horizontals have really been the company maker - without these it appears we'd be mostly standing still (albeit still profitable) however perhaps they would have done more stimulation work and/or drilling elsewhere if the Ubaque hadn't been as prolific?

The fact that they can pretty much make up for declines on all the other wells with just the flush production from one Ubaque horizontal highlights how cost effective this is at under $2.5m per well. Hopefully this horizontal drilling can be employed across other parts of the acerage - if it is even half as successful we will be laughing.

[rockyride] 29/8/2024 19:01

KS - I think we've lost 476 from elsewhere and not 330. HZ3 is currently flowing at 960And not 1106 but I can see where you picked 1106 up from. A bit concerning that we ended 2023 at 3200 and if we'd not have drilled any HZ wells, I calculate that we'd be down to only circa 1,500boepd.

[tom111] 29/8/2024 17:11

US economy ticked up better than expected in the second quarter to 3% which caused oil prices to move higher.With interest rates due to fall in September i would have thought that oil would remain elevated

[king suarez] 29/8/2024 15:47

That would make sense 'much higher decline than vertical wells' in absolute terms, not percentage terms.

[mount teide] 29/8/2024 15:40

sl - 'LLA-34 declines, specifically horizontal wells that have a higher decline than the vertical wells in the main producing reservoir;'

Think this has been rather poorly explained - as I believe Parex are almost certainly mis-describing the impact of the decline rate in bopd with the percentage drop.

Historically, as previously reported, horizontal wells drilled by Parex have had materially lower declines rates in percentage terms than its verticals in the same field: a 10% decline rate of a 3,000 bopd horizontal well would be 300 bopd, while a 10% decline rate of a 600 bopd vertical well would be 60 bopd.

So, ten horizontal wells declining at 10% would generate a drop in production of 3,000 bopd while - while it would take 50 vertical well declining at a 10% drop to generate the same 3,000 bopd drop, or 25 decline at 20%!

Parex reported material increases in total production following the introduction of horizontal drilling during the last 2 years - after completing the latest campaign of horizontal drilling in early Q2, the plan was to identity further opportunities in their other fields for horizontal drilling. So, even recent modest decline rates in bopd per well from the producing horizontals will have disproportionately magnified the overall decline rate in bopd as they are much higher bopd producers.

AIMHO/DYOR

[red rook] 29/8/2024 15:39

.... well malcy appears to be happy !

"There are results in this announcement but even more than usual they offer no insight into how you should value this company because it is the drilling programme this year where such significant value is being created. More importantly, the horizontal wells which are currently being drilled, have yet again exceeded expectations and there are still two to be drilled before going to Chorreron, formerly Baquiano.

These wells are producing exceptional flow rates, this one exceeds 2,500 b/d gross, 1,250 net, and is still increasing. A water cut of 8% is not outwith the pre-drill expectations and as explained last time the company is ahead of the game with its water disposal wells, also still recovering drilling fluids. I would expect from this statement that something like the earlier horizontal wells is likely.

Finally on the well front I observe that the company continue to reduce the time and hence the costs of each well, both horizontal and vertical which improve shareholder value and speed up return on capital. Indeed, the CNB HZ-4 is the first Arrow well to use Autonomous Inflow Control Devices (AICDs) which are designed to limit the water cut in horizontal wells. ‘The results of CNB HZ-4 will be closely monitored to determine if these technologies or others will enhance production and ultimate recovery in the Ubaque reservoir’.

So, the company report net current production of some 5/- b/d and is up to speed with expectations and has cash of c.$12m and a strong balance sheet with no debt. Expect more of the same and with the company evaluating another rig to potentially start development drilling at the RCE field, shareholders can expect more upward movement in the share price, even after a strong recent rally. My Target Price remains at 75p."

[tom111] 29/8/2024 14:07

At least oil is up near 3% for some reason

[squareloss] 29/8/2024 13:56

Slightly O/T

Parex updated guidance today, down from a 2024 mid point of 57k to 49k

Share price down 30% already!

Maybe they should put in a juicy bid for Arrow...:)

Key drivers for lower current average production are:

Rapid productivity decline at Arauca;

Slower-than-expected volume additions from LLA-32;

Higher than originally budgeted downtime at LLA-34 and Cabrestero, as well as slower than Parex’s expectations of the waterflood ramp-up at LLA-34;

LLA-34 declines, specifically horizontal wells that have a higher decline than the vertical wells in the main producing reservoir; and

Following outperformance in H1 2024 at Cabrestero, waterflood phasing has caused the overall decline to converge to the long-term trend and be in line with prior Management budgeting

[tom111] 29/8/2024 12:04

And mine and many more as well

[hoper1] 29/8/2024 11:41

My top up showing as a sell