Arrow Exploration Corp (TSX-V:AXL, AIM:AXL, OTC:CSTPF) is set for an active period with ongoing drilling activity and production growth acting as value catalysts, according to analysts at Zeus Capital.
On Wednesday, the broker repeated a ‘buy’ recommendation, which, with a 55p price target, represents a premium more than 100% to the current price of 19.5p.
Earlier, Arrow reported results from a series of vertical wells, at the Alberta Llanos field in Colombia, which added to production volumes and confirmed that horizontal drilling will be viable to further lift production in the future.
Two of three vertical wells are now contributing to a production profile that currently stands at around 4,500 barrels of oil per day.
Another well, described by the company as “a long step out” to test a potential extension of the field returned only sub-commercial volumes.
Next, the company is moving the rig to drill three horizontal wells at the Carrizales Norte field.
Also, a second rig is expected to join the campaign, in the second quarter of 2025, to bring online low-risk production with four ‘directional’ wells slated for the RCE field, before the second rig is moved to drill horizontal wells at Alberta Llanos.
As a result, the coming months are expected to bring a busy phase of activity for Arrow and its investors.
Zeus Capital analyst Daniel Slater, in a note, highlighted the scope of activity ahead.
“In Colombia, Arrow has an ongoing programme of new development wells (including horizontals) on the existing Carrizales Norte, Rio Cravo Este, and Alberta Llanos fields, all of which can be quickly brought onstream on success,” Slater said.
“The Carrizales Noroeste discovery made in early 2024 should also add to the company’s drilling hopper in the coming years.
“Beyond this, there are several further prospects on Tapir (including Mateguafa Oeste, Mateguafa Attic, and Capullo planned for drilling in 2025), and a significant potential new project based on a targeted enlargement of the Oso Pardo licence.
“The company also has a history of adding new assets via acquisition. All of this should continue to provide regular drilling news flow for the stock and continuous production gains.”