Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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Thematic (Sector/Industry)

<ul><li>Despite Colombia facing challenges growing oil &amp; gas reserves on a national level, the country’s independent operators are scaling up.</li><li>Relative to the size of national oil &amp; gas reserves, Colombia's onshore discoveries in recent years may look marginal at best.</li><li>However, the size of the discoveries can be meaningful for smaller operators.</li></ul>

Despite Colombia facing challenges growing oil &amp; gas reserves on a national level, the country’s independent operators are scaling up.Relative to the size of national oil &amp; gas reserves, Colombia's onshore discoveries in recent years may look marginal at best.However, the size of the discoveries can be meaningful for smaller operators.

Oil & Gas Operators Guiding for Bottom-Up Growth Despite Colombia's Top-Down Challenges

Equity Capital Markets and Advisory Business, Auctus Advisors

Auctus Advisors

Equity Capital Markets and Advisory Business

Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector. The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy. Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors. Auctus provides Corporate Broking, Equity Research and Investment Banking services.

Equity Bottom-Up

Arrow Exploration Corp / Equity Bottom-Up

<ul>
<li>Canacol Energy has exercised 18.4 mm warrants. The company will now hold 60.1 mm shares in Arrow representing 21.2% of the issued share capital.</li>
<li>Tim Leslie has exercised 10.2 mm warrants, which more than doubles his interest from 7.6 mm shares to 17.8 mm shares.</li>
<li>This represents 6.3% of the issued share capital.</li>
</ul>


Canacol Energy has exercised 18.4 mm warrants. The company will now hold 60.1 mm shares in Arrow representing 21.2% of the issued share capital.
Tim Leslie has exercised 10.2 mm warrants, which more than doubles his interest from 7.6 mm shares to 17.8 mm shares.
This represents 6.3% of the issued share capital.


Arrow Exploration Corp. (AIM: AXL): Large Shareholders Increase Stake in Arrow

<ul>
<li>A 23 foot pay zone (25% porosity) in the Carbonera C7 formation in the CN-3 well has been perforated and put initially on production at a rate of 1,149 bbl/d on pump with a water cut of &lt;0.5%. </li>
<li>We view this low water cut as very encouraging. The oil is very light (33 deg API).</li>
<li>The ESP has now been shut off and the well is naturally flowing on a 23/128 choke at a rate of 640 bbl/d gross (320 bbl/d net).</li>
</ul>


A 23 foot pay zone (25% porosity) in the Carbonera C7 formation in the CN-3 well has been perforated and put initially on production at a rate of 1,149 bbl/d on pump with a water cut of &lt;0.5%. 
We view this low water cut as very encouraging. The oil is very light (33 deg API).
The ESP has now been shut off and the well is naturally flowing on a 23/128 choke at a rate of 640 bbl/d gross (320 bbl/d net).


Arrow Exploration Corp. (AIM: AXL): Good Flow Rate in the C7 at Carrizales Norte-3

<ul>
<li>The 2P reserves at Carrizales Norte (net to Arrow) have been estimated at 3.92 mmbbl with an 3P upside case of 6.62 mmbbl (1.82 mmbbl of 1P reserves).</li>
<li>The 2P reserves of Carrizales Norte are also 2x the pre drill estimate (1.8 mmbbl), which is in line with our estimate (4 mmbbl).</li>
<li>The Ubaque reservoir alone is estimated to hold ~3 mmbbl of 2P reserves (out of 3.92 mmbbl total 2P reserves at Carrizales Norte).</li>
</ul>


The 2P reserves at Carrizales Norte (net to Arrow) have been estimated at 3.92 mmbbl with an 3P upside case of 6.62 mmbbl (1.82 mmbbl of 1P reserves).
The 2P reserves of Carrizales Norte are also 2x the pre drill estimate (1.8 mmbbl), which is in line with our estimate (4 mmbbl).
The Ubaque reservoir alone is estimated to hold ~3 mmbbl of 2P reserves (out of 3.92 mmbbl total 2P reserves at Carrizales Norte).


Arrow Exploration Corp. (AIM: AXL): Tripling 2P reserves at Tapir

<ul>
<li>The Carrizales Norte-2 well (CN-2) encountered 60’ of net pay in the Ubaque formation. </li>
<li>The CN-2 well is currently producing 680 bbl/d gross (340 bbl/d net) as the company has set the ESP at the minimum optimum rate to maximize recovery factor.</li>
<li>The net pay encountered in the Ubaque at CN-2, the oil quality and the achieved flow rate are consistent with the Ubaque at CN-1.</li>
</ul>


The Carrizales Norte-2 well (CN-2) encountered 60’ of net pay in the Ubaque formation. 
The CN-2 well is currently producing 680 bbl/d gross (340 bbl/d net) as the company has set the ESP at the minimum optimum rate to maximize recovery factor.
The net pay encountered in the Ubaque at CN-2, the oil quality and the achieved flow rate are consistent with the Ubaque at CN-1.


Arrow Exploration Corp. (AIM: AXL): CN-2 Flows at up to 1 Mbbl/D.

Canada

Arrow Exploration Corp. is a public junior oil and gas company. The Company focuses in the acquisition, exploration, and development of oil and gas properties in Colombia and in Western Canada.

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Arrow Exploration Corp (AXL LN)

Oil & Gas Operators Guiding for Bottom-Up Growth Despite Colombia's Top-Down Challenges

Despite Colombia facing challenges growing oil & gas reserves on a national level, the country’s independent operators are scaling up.

Water Tower Research

Arrow Exploration Corp. (AIM: AXL): Large Shareholders Increase Stake in Arrow

Canacol Energy has exercised 18.4 mm warrants. The company will now hold 60.1 mm shares in Arrow representing 21.2% of the issued share capital.

Auctus Advisors

Arrow Exploration Corp. (AIM: AXL): Good Flow Rate in the C7 at Carrizales Norte-3

A 23 foot pay zone (25% porosity) in the Carbonera C7 formation in the CN-3 well has been perforated and put initially on production at a rate of...

Auctus Advisors

Arrow Exploration Corp. (AIM: AXL): Tripling 2P reserves at Tapir

The 2P reserves at Carrizales Norte (net to Arrow) have been estimated at 3.92 mmbbl with an 3P upside case of 6.62 mmbbl (1.82 mmbbl of 1P reserves).

Auctus Advisors

Arrow Exploration Corp. (AIM: AXL): CN-2 Flows at up to 1 Mbbl/D.

The CN-2 well is currently producing 680 bbl/d gross (340 bbl/d net) as the company has set the ESP at the minimum optimum rate to maximize...

Auctus Advisors

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