Source: Stephane Foucaud
November 21, 2023 (Investorideas.com Newswire) Better-than-expected flows and a discovery from one well plus greater volumes out of another should positively impact future production totals, noted an Auctus Advisors report.
Arrow Exploration Corp. (AXL:TSX.V; AXL:LSE) announced favorable developments regarding the Rio Cravo Este-6 (RCE-6) and Oso-Pardo 3 wells in Colombia, reported Auctus Advisors analyst Stephane Foucaud in a November 16 research note.
"The discovery in the Ubaque at RCE and additional volumes at Oso Pardo are expected to be accretive to our core and risked exploration net asset value," Foucaud wrote.
224% Implied Gain
Accordingly, Auctus reiterated its £0.55 per share price target on the Alberta-based oil and gas company, currently trading at about £0.17 per share.
From the current price, the return to target represents a robust return for investors of 224%.
Flow Rate Surprise
In the high-quality upper C7 sand, the RCE-6 well encountered 16 feet of pay and now is flowing naturally at a higher rate than expected, Foucaud reported. The flow rate is 834 barrels per day (834 bbl/d), 417 bbl/d net to Arrow, which holds a 50% interest in the asset.
"This initial rate is above our expectations of 700 bbl/d," Foucaud wrote.
Positive Test Result
In the Ubaque formation, the RCE-6 well encountered 7 feet of high-quality pay with an average porosity of 24%. The zone was tested at an oil rate of up to 393 bbl/d (179 bbl/d net to Arrow) of 13.3 degree API crude, with no pressure decline.
"This is a new discovery," wrote Foucaud. "Further drilling will be required to estimate the areal extent."
The analyst pointed out that the downhole pressure and reservoir quality there are consistent with those of the Ubaque in the Carrizales Norte oilfield, about 2 kilometers away.
Volumes Beat Estimate
The Oso Pardo-3 well in Colombia's Middle Magdalena Valley basin showed larger volumes than expected, Foucaud pointed out. In high-quality sands in the Umir formation, the well encountered multiple pay zones totaling 53 feet of net pay, with an average porosity of 23%. It hit oil 120 feet below expectations across the fault.
"This potentially opens five new drilling locations on the lands already held by Arrow and could result in additional reserves and production," Foucaud wrote.
Now, Oso Pardo-3 will be put into production.
More Drilling on Horizon
Foucaud indicated the current drill campaign is continuing. The RCE-7 well was slated for drilling in mid-November, targeting multiple zones, including the Ubaque. The RCE-8 well is to follow.
Subsequently, the drill rig will be mobilized back to Carrizales Norte, where highly anticipated horizontal wells will be drilled in the Ubaque in H1/24.
"A new prospect (Carrizales Noroeste) will also be drilled, which, with success, could potentially add a material amount of resources," noted Foucaud.
This news is published on the Investorideas.com Newswire - a global digital news source for investors and business leaders
Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. Contact management and IR of each company directly regarding specific questions.
More disclaimer info: https://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release and our other news services on the Investorideas.com newswire https://www.investorideas.com/News-Upload/