REG - Arrow Exploration - First Ubaque Horizontal Well Results

Arrow ExplorationAnnouncement

19/06/2024 07:00

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RNS Number : 9568S  Arrow Exploration Corp.  19 June 2024

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ARROW ANNOUNCES FIRST UBAQUE HORIZONTAL WELL RESULTS

CNB HZ-1 now on production

CALGARY, June 19, 2024 - Arrow Exploration Corp. (AIM: AXL; TSXV: AXL)
("Arrow" or the "Company") , the high-growth operator with a portfolio of
assets across key Colombian hydrocarbon basins, is pleased to provide an
update on operational activity, particularly at the multi horizon, Carrizales
Norte ("CN") field on the Tapir Block in the Llanos Basin of Colombia where
Arrow holds a 50 percent beneficial interest.

CNB HZ-1

Arrow has put on production the first of four Ubaque horizontal wells planned
for 2024.  The first horizontal well on the Carrizales Norte "B" pad (CNB
HZ-1) is exceeding expectations and is being restricted to a current flow rate
of 3,150 BOPD gross (1,575 BOPD net to Arrow) with less than 1% water cut
while still recovering load fluid.  Please note initial production flows are
not necessarily indicative of long-term performance or ultimate recovery and a
stabilized production rate will be determined in the first few weeks of
operations, in keeping with conservative reservoir management. Further updates
will be provided in due course.

CNB HZ-1 was spud on May 14, 2024, and reached target depth on 8,448 feet
(true vertical depth) on June 7, 2024.  The well was drilled to a total
measured depth of 11,680 feet with a horizontal section of approximately 2,042
feet. The pay zone is a clean sandstone exhibiting consistent 28% porosity and
high resistivities, similar characteristics to those seen in previous wells.
Initial reservoir analysis exhibits multi-darcy permeability. An electric
submersible pump (ESP) has been inserted in the well and is running at its
minimum setting. The well is flowing and has been choked back in keeping with
conservative reservoir management as well as ongoing development of adequate
water disposal capabilities.

Upcoming Drilling

The rig has been moved to the second cellar on the Carrizales Norte B Pad
where the Company plans to drill a dedicated water disposal well (CNB-2).
 Thereafter, the Company expects to drill three additional horizontal wells
on the B pad, followed by the Baquiano-1 exploration well, which is on trend
with the Carrizales Norte field.  The three follow up wells will have longer
horizontal sections, which are expected to result in enhanced rate and
ultimate recovery.

 

Water Disposal Update

The RCE-1 water disposal well conversion on the Rio Cravo Este pad is complete
and the disposal well is operational.  During the conversion process, some
production from the RCE pad was temporarily restricted, however, that
production has now been restored.

 

The conversion of the CN-4 well to a water disposal well is progressing.  The
well is being equipped while waiting on regulatory approval. The Company has
temporarily cut back production (approximately 250 BOPD net) from the existing
wells at Carrizales Norte until the new water handling capability is in
place.  The CN-4 and CNB-2 water disposal wells are expected to be capable of
disposing of sufficient water volumes to enable the entire Carizales Norte
field development.

 

Oso Pardo and Capella Update

The Morsa 1 well in the Oso Pardo field, which experienced downhole equipment
failure, is back on production, adding approximately 75 BOPD net.

 

The Capella field remains shut in, and the third-party operator is continuing
to assess plans to restart the field.  Net shut in production from the
Capella field is approximately 230 BOPD.

 

Canada Update

Due to exceptionally low natural gas prices in Canada, the East Pepper and
West Pepper wells have been temporarily shut in.  These wells will restart
once favorable economic conditions return.  Net gas shut in is approximately
250 BOE/d net.

 

Corporate Update

Current net corporate production is approximately 3,600 BOE/D, inclusive of
CNB HZ-1. Once the imminent additional water handling capacity is available,
the existing wells on both the RCE and CN platforms will be produced more
aggressively. Existing wells were curtailed waiting on water handling
capacity.

 

Arrow's cash position was approximately $12.1 million USD on June 1, 2024.
Although Arrow has an aggressive capital program, the Company has maintained a
healthy balance sheet with no debt.

 

Marshall Abbott, CEO of Arrow commented:

"The initial success of the first horizontal well at the CNB pad, which is
currently exceeding expectations, is an important milestone in the development
of the hydrocarbon-dense Ubaque formation. The horizontal technology proven by
this well can now be used to exploit further prospects on the Tapir block, and
potentially the Oso Pardo block."

 "The CNB HZ-1 well was drilled, completed and brought on production under
budget. Although initial production flows are not necessarily indicative of
long-term performance, the Company is excited about the initial results of the
well and the potential to grow reserves and production."

"The information obtained from the vertical development program in Q1 2024 at
the Carrizales Norte field, such as Ubaque reservoir extent, uniformity,
thickness and depth, has been instrumental in the planning and execution of
the horizontal well program."

"Construction of the Baquiano pad is complete and the Company plans to move
the Petroworks 1500 HP rig to the Baquiano pad once the current drilling
program has been completed at the CNB pad."

 

 

For further Information, contact:

 Arrow Exploration
 Marshall Abbott, CEO                                                +1 403 651 5995
 Joe McFarlane, CFO                                                  +1 403 818 1033

 Canaccord Genuity (Nominated Advisor and Joint Broker)
 Henry Fitzgerald-O'Connor                                           +44 (0)20 7523 8000

 James Asensio

 George Grainger

 Auctus Advisors (Joint Broker)
 Jonathan Wright                                                     +44 (0)7711 627449
 Rupert Holdsworth Hunt

 Camarco (Financial PR)
 Andrew Turner                                                       +44 (0)20 3781 8331
 Rebecca Waterworth

 About Arrow Exploration Corp.

Arrow Exploration Corp. (operating in Colombia via a branch of its 100% owned
subsidiary Carrao Energy S.A.) is a publicly traded company with a portfolio
of premier Colombian oil assets that are underexploited, under-explored and
offer high potential growth. The Company's business plan is to expand oil
production from some of Colombia's most active basins, including the Llanos,
Middle Magdalena Valley (MMV) and Putumayo Basin. The asset base is
predominantly operated with high working interests, and the Brent-linked light
oil pricing exposure combines with low royalties to yield attractive potential
operating margins. By way of a private commercial contract with the recognized
interest holder before Ecopetrol S.A., Arrow is entitled to receive 50% of the
production from the Tapir block. The formal assignment to the Company is
subject to Ecopetrol's consent.  Arrow's seasoned team is led by a hands-on
executive team supported by an experienced board. Arrow is listed on the AIM
market of the London Stock Exchange and on TSX Venture Exchange under the
symbol "AXL".

Forward-looking Statements

This news release contains certain statements or disclosures relating to Arrow
that are based on the expectations of its management as well as assumptions
made by and information currently available to Arrow which may constitute
forward-looking statements or information ("forward-looking statements") under
applicable securities laws. All such statements and disclosures, other than
those of historical fact, which address activities, events, outcomes, results
or developments that Arrow anticipates or expects may, could or will occur in
the future (in whole or in part) should be considered forward-looking
statements. In some cases, forward-looking statements can be identified by the
use of the words "continue", "expect", "opportunity", "plan", "potential" and
"will" and similar expressions. The forward-looking statements contained in
this news release reflect several material factors and expectations and
assumptions of Arrow, including without limitation, Arrow's evaluation of the
impacts of COVID-19, the potential of Arrow's Colombian and/or Canadian assets
(or any of them individually), the prices of oil and/or natural gas, and
Arrow's business plan to expand oil and gas production and achieve attractive
potential operating margins. Arrow believes the expectations and assumptions
reflected in the forward-looking statements are reasonable at this time, but
no assurance can be given that these factors, expectations, and assumptions
will prove to be correct.

The forward-looking statements included in this news release are not
guarantees of future performance and should not be unduly relied upon. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ materially
from those anticipated in such forward-looking statements. The forward-looking
statements contained in this news release are made as of the date hereof and
the Company undertakes no obligations to update publicly or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, unless so required by applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.

Glossary

API:        A specific gravity
(https://glossary.oilfield.slb.com/en/terms/s/specific_gravity)  scale
developed by the American Petroleum Institute (API
(https://glossary.oilfield.slb.com/en/terms/a/api) ) for measuring the
relative density of various petroleum liquids, expressed in degrees.

BOPD:   barrels of oil per day

boe/d:  barrels of oil equivalent per day

Qualified Person's Statement

The technical information contained in this announcement has been reviewed and
approved by Grant Carnie, senior non-executive director of Arrow Exploration
Corp. Mr. Carnie was a member of the Canadian Society of Petroleum Engineers,
holds a B.Sc. in Geology from the University of Alberta and has over 35 years'
experience in the oil and gas industry.

This Announcement contains inside information for the purposes of the UK
version of the market abuse regulation (EU No. 596/2014) as it forms part of
United Kingdom domestic law by virtue of the European Union (Withdrawal) Act
2018 ("UK MAR").

 

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