Malcy comments More good news from Arrow which readers will know that I am a big fan of having met with Marshall Abbott when he was last over, the company has aggressive but achievable targets which make the current rating incredibly attractive.
With the East Pepper well delivering some 1,000 boe/d and the currently curtailed West well adding 270 boe/d and increasing to 400 boe/d imminently, production is increasing. In Colombia workover wells are succeeding and the development wells at RCE-3, which should spud in December and be followed by the RCE-4 well and the RC water disposal well. After that it’s off to the Carrizales Norte field where the company are currently building a road and a pad for two wells expected to spud in Q1 2023.
Putting all this together Arrow is producing approximately 2,530 boe/d net and with plenty of upside at the huge Pepper area and also in Colombia. They have significant capital investment planned from which I expect to see even more in terms of next year’s production and of course increased reserves to go with that.
My initial note a few weeks ago gave a starting target price of 50p per share and after this update I have not changed that, indeed I remain convinced that Arrow offers significant upside backed by good management with strong finances and a big capex budget to spend in 2023.