Canaccord Genuity initiates coverage on Arrow Exploration at 'buy'

Analysts at Canaccord Genuity initiated coverage on exploration and production firm Arrow Exploration at 'buy' on Tuesday, stating the group was "targeting the bullseye".

Canaccord Genuity said Arrow has had "a busy operational programme", providing multiple varied market catalysts, with its near-term focus on the Tapir licence, of which it has a 50% working interest, in the "prolific" LLanos Basin of northeast Colombia.

The Canadian bank noted that in 2022, Arrow had already drilled two successful development wells on the Rio Cravo Este field on Tapir, which more than tripled total company production to around 1,500 barrels of oil per day, and through further drilling the company was now on track to deliver its target production level 3,000 bopd by spring 2023.

However, Canaccord still sees "considerable further growth potential" from the group's current assets - RCE field, nearby low-risk Carrizales Norte prospect, plus other Tapir exploration targets, and the Oso Pardo field extension on Santa Isabel licence.

"We see potential to increase production to over 6,000 bopd," added the analysts, who started the stock off with a 36.0p target price and said it was in "a good place" for longer-term growth.

Reporting by Iain Gilbert at Sharecast.com