Canaccord Genuity slightly lowered its target price on Arrow Exploration Corp from 25p to 22p on Thursday but reiterated its 'speculative buy' rating on the stock, highlighting significant investment in its Tapir licence in Colombia.
Canaccord Genuity noted that Arrow had directed $38m of spending in the first nine months of 2025 towards drilling, water handling upgrades, infrastructure improvements and 3D seismic work, with two rigs active during the second and third quarters. The investment was aimed at supporting longer‑term production and underpins expectations of a licence extension beyond its current 2028 expiry.
Near‑term, the spending has weighed on cash balances, which fell to $6m at the end of the third quarter from $19m at year‑end 2024. However, Canaccord noted cash had already improved to $8m at the start of November and projected around $10m by year‑end 2025. The firm also has no debt and retains access to an undrawn $20m loan facility.
Looking ahead, the Canadian bank expects cash growth in 2026, though the pace will depend on oil prices, field performance, reduced capex, exploration success at the Icaco prospect, and potential horizontal drilling.
Incorporating third‑quarter results, Canaccord trimmed production forecasts but said Arrow's producing asset value of 11p underpinned the current valuation, giving investors "free" exposure to potential upside from Tapir and exploration prospects.
Reporting by Iain Gilbert at Sharecast.com