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(Sharecast News) - Arrow Exploration reported continued operational progress at its Colombian assets on Friday, alongside a decline in reserves and valuation in its 2025 year-end report, reflecting production, pricing assumptions and classification impacts.
The AIM-traded company said its Mateguafa-11 well had been drilled to total depth and encountered oil-bearing sands in the C7 and C9 Carbonera formations, with 18 feet and 30 feet of net pay respectively.
It said the well was expected to be brought onstream in the coming weeks, initially producing from the C7 zone, while results had extended the Mateguafa Attic structure to the south and supported further development drilling.
Arrow said it planned to drill a horizontal well, M-12Hz, targeting the C9 formation by the end of March, before moving to the Icaco pad to drill an exploration well.
Corporate production currently stood at approximately 5,325 barrels of oil equivalent per day, with additional output expected once M-11 is online.
The company also said discussions with regulators regarding an extension of the Tapir licence remained ongoing, with management expressing confidence that the extension will be granted.
In its reserves update, Arrow reported total proved reserves of 5,415 mboe at year-end 2025, down 7% from 5,805 mboe in 2024, while proved plus probable reserves fell 14% to 11,775 mboe.
Total proved, probable and possible reserves declined 10% to 20,102 mboe.
The reductions were driven in part by production during the year and economic factors, including conservative oil price assumptions used by the independent evaluator, Boury Global Energy Consultants.
The report assumed Brent crude prices of $67 per barrel in 2026, rising to $80.12 by 2032, levels the company noted were significantly below current market prices.
Before-tax net present value, discounted at 10%, for proved reserves fell 16% to $95.9m, while proved plus probable NPV declined 14% to $244.5m.
On an after-tax basis, proved plus probable NPV was broadly stable at $160m.
Arrow said its drilling programme replaced a significant portion of produced volumes during the year, with ongoing development at Mateguafa expected to support future reserve growth.
"Looking out to the remainder of 2026, Arrow's prospect inventory is multifaceted and demonstrates the hydrocarbon density of the Tapir block in the fertile Llanos Basin," said chief executive Marshall Abbott.
He added that the company expected "a successful drilling campaign that is balanced between development and low risk exploratory wells" over the remainder of the year.
The reserves report assumed different scenarios for the Tapir licence extension, with proved reserves based on expiry in 2028, while higher reserve categories assume one or two five-year extensions are granted.
Arrow said it was continuing to work with authorities and believed the extensions would ultimately be approved.
At 1242 GMT, shares in Arrow Exploration Corporation were up 2.27% at 22.5p.
Reporting by Josh White for Sharecast.com.
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