1.8 million bod lifetime on CN well is something like 6-9 years lifetime.
Looking at earnings one well at CN could yield during its lifetime @1.8 million barrels and $85 oil price, @$45 netback and divided by 300 million shares = C$0.27, pretty much this means one CN well is worth the half (50% net) SP in Canada! Now what are we all waiting for?
Auctus after RCE-5:
Arrow Exploration - Target Price 45p - Auctus Advisors - April 3 2023
The RCE-5 Well encounters one of the largest net pay to date in the RCE Field
* The RCE-5 well encountered 90ft of net oil pay across the Carbonara C7(36ft) and Gacheta(54ft)
* This is the third successful well in the 2023 campaign. RCE-5 encountered the largest net pay in the current programme.
* The well is expected to add production and reserves and will be put into production in early April.
* The rig will now move to Carrizales Norte where three wells will be drilled.
* We estimate current production at about 2,100-2,400 boepd, including 350 bbl/d net at RCE-4(Natural flow) and 400 bbl/d net at RCE-3 (now on pump with the pump rate being progressively increased)
* Overall, the remaining eight wells in the 2023 Programme (including RCE-5 not on stream yet) could add a further 2,200 bbl/d to 3,800 bbl/d of net production by YE23. We continue to conservatively forecast 3.6 bbl/d production in 2023 and 4.4 bbl/d in 2024.
* We reiterate our target price of 45p/share(our ReNav)
Carrizales Norte - is a very high chance of success prospect - (75%, but we assume 50% in our forecasts). The Carrizales Norte-1 well is a low risk step out well considered to be an extension of the Carrizales Field. On success, it could allow the company to book 1.8 mmbbls of 2P Reserves.
Valuation and Cash Flow - We continue to forecast that the company will continue to hold US$25m of net cash at YE23, and US$60 at YE24 under our average $92 Brent assumptions. This represents circa 100% of the the market cap. At an average of $80 Brent from Q2/23 to YE24, we forecast YE Net Cash of US$18m increasing to $55m at YR24.(85% of current market cap). Our ReNav of 45p/share represents more than 180% upside to the current share-price.