RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:New interview with ceoFrom "here and there" user on ADVFN:
Just gone through the three latest messages from the company.
The Proactive Interview , the Quarterlies and the Zak Mir interview (see link below)
hxxps://www.voxmarkets.co.uk/articles/trader-s-cafe-with-zak-mir-marshall-abbott-ceo-and-joe-macfarlane-cfo-arrow-exploration-6e90d8c/
The proactive Interview was clearly way too early for definitive numbers on the re-completions. Judging by the way the 'market' has reacted with the SP dropping from 20.5 to 17.5, the 'market' was obsessing about the minutae of the re-completion numbers. Whilst MA had forecast a 600 bopd increase, we have at present a 350-380 BOPD increase with the numbers improving day by day still. The pay back on the costs for RCS-1 were 17 days! So we are producing more, making more money per month just not quite as much as we had hoped.
The decline rate on East Pepper has been startling but has now stabilsed at 250 boepd (1.5 mmscf ish). I guess this wouldn't have seemedsoo bad if they had kept to their original forecast for E Pepper of an intial production rate of 500 BOEPD. I imagine the excitement of those intial flush production rates gave hope to a more extended and higher production run. Between W Pepper and East pepper it looks like it is producing at about 5-6 mmscf. Good cash flow, good prices, all adding dollars to the bottom line. Plenty of chat re-inforcing their intention to sell Monteney and there is added interest now these wells are drilled, proved and on production.
One titbit in the Quarterlies. RCS-1 will have another re-completion. (presumably now?) and this is forecast to add several hundred more BOPD.
"An upper unit in the Carbonara 7A was perforated and flowed 330 bop/d (gross) after
stabilizing. Management believes a thin shale barrier bifurcates the C7A. It is apparent
that a thin shale break prevents inflow from the C7A main sand, which has superior
reservoir characteristics akin to RCE-2. Arrow now plans to perforate the C7A in RCS-1 as
it is the highest reservoir in the pool. The Company expects that RCS-1 should have a
comparable flow rate to RCE-2, where C7A is currently producing 1,025 bop/d (gross) /
512 bop/d (net) with a flat watercut."
All of these are nice add ons, clearly they are learning how to manage the reservoirs all the time but the real game in town is 'Phase 2' . The drilling of 5/6 wells, all with a 95% COS, all forecast to add 360 bopd net to Arrow. Each well costing circa $4.25m and having pay backs of just 37 days.
At $70 oil, 2023 will bring in $55m in revenue, $37m of cashflow. $6.7m of free cashflow (after capex spend) and they will have $21m in the bank at the end of 2023. Today oil is at $85 so we have plenty of extra margin to play with.
They see enough runway on the Llanos Basin and the Middle Magdalena to get to 10 000 bopd. This does not include Oso Pardo which will add, on success, another 4000 bopd.
'We look forward to positive and significant share price appreciation as we execute on the drilling programme.'
'Production incline will take care of the share price'
I bought the dip last week for all the above reasons.