The company highlighted production as of January 21, 2022, net to Arrow of approximately 1,320 boe/d (barrels of oil equivalent per day), benefiting from rising Brent Crude oil prices and strong natural gas prices in Canada
Arrow Exploration Corp (TSX-V:AXL, AIM:AXL, OTC:CSTPF) has issued an operational update and outlined the near-term plans for its Colombian and Canadian assets.
The company highlighted production as of January 21, 2022, net to Arrow of approximately 1,320 boe/d (barrels of oil equivalent per day), benefiting from rising Brent Crude Oil (LSE:BRENT) prices and strong natural gas prices in Canada, with 453 barrels of oil production from its Colombian portfolio and 868 barrels of gas production from its Canadian portfolio.
Arrow said organic growth opportunities are advancing, with the RCE-2 well on the Tapir Block, Colombia is expected to commence drilling in early March and the company is considering tie-in opportunities in Canada, given the success of the West Pepper well. The company also said the acquisition market remains robust, and it is continuing to evaluate numerous opportunities in Colombia.
Marshall Abbott, CEO of Arrow, said: “Our production portfolio continues to go from strength to strength, driving significant cash flow generation and placing us very well for a strong 2022 as we evaluate further growth opportunities. We have a number of developments in the pipeline and look forward to providing shareholders with further updates in due course.”
READ: Arrow Exploration says West Pepper Well on stream
Arrow noted that as of January 21, 2022, the company’s production in Colombia included 137 barrels (net to Arrow) from the RCE-1 well (Tapir Block), 125 barrels per day (bbls/d) from the Oso Pardo Field (Santa Isabel Block), and 191 bbls/d (net to Arrow) from the Capella Field (Ombu Block), for a total of approximately 453 bbls/d (net to Arrow).
Based on prevailing Brent Crude Oil (LSE:BRENT) prices, Arrow said it expects its Colombian oil assets to generate approximately US$450,000 in cash flow in January 2022, prior to G&A expenses.
The company said it continues to advance towards drilling the RCE-2 well on the Tapir Block. The partners on the Tapir Block – Arrow 50% and PetrolCo 50% – are undertaking the community socialization process, the procurement of supplies and services, as well as tenders for a drilling rig. Site preparations are expected to commence in the coming weeks.
Arrow said it expects the RCE-2 well to spud during the second week of March 2022. While preparations for drilling the subsequent RCE-3 well are at an earlier stage, Arrow added that it expects the RCE-3 to spud during April 2022.
The company said it expects to provide a further update once more exact dates for the spudding of the RCE-2 and RCE-3 wells are confirmed.
Canadian wells advance
In Canada, as announced on December 13, 2021, the Dalehurst 06-26-52-23W5 well (West Pepper) located near Edson, Alberta, Canada was brought on stream.
Arrow said West Pepper has continued to perform according to the company’s expectations, and following natural declines from the initial flush production levels, as of January 21, 2022, the well was producing approximately 775 boe/d.
The company said it is benefiting from currently robust natural gas prices in Western Canada. The February 2022 natural gas futures contracts price at the AECO hub – the benchmark for natural gas prices in Canada – was C$4.30/GJ as of January 24, 2022, being approximately 11% higher than the nearest-month futures contract price of C$3.87/GJ as of the first day of production from West Pepper.
Based on prevailing AECO natural gas prices Arrow said it expects West Pepper to generate approximately US$298,000 in cash flow in January 2022, prior to G&A expenses, in addition to approximately US$28,000 in cash flow expected from the company’s share of production at the Fir natural gas asset (approximately 93 boe/d).
As a result of the prevailing robust natural gas prices in Western Canada, the company said it is also evaluating the option of tie-ing in the 14-21-52-22W5 Dalehurst well (East Pepper Well) and is in discussions with potential off-takers, and expects to provide an update on the East Pepper Well in the coming months.
Numerous acquisition opportunities being evaluated
Arrow said its management continues to evaluate numerous acquisition opportunities in Colombia and other low-risk jurisdictions. The company has formed a dedicated internal team that is working in collaboration with its external advisors to identify and pursue accretive acquisition opportunities that would create additional value for shareholders, above-and-beyond Arrow’s existing asset base.
The company said it has retained the services of Boury Global Energy Consultants for the preparation of its 2021 year-end reserves report. The report is in progress, and Arrow expects to announce the results by the end of February 2022.
Arrow Exploration Corp (TSX-V:AXL, AIM:AXL, OTC:CSTPF), operating in Colombia via a branch of its 100% owned subsidiary Carrao Energy S.A., has a portfolio of premier Colombian oil assets that are under-exploited, 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. Arrow’s 50% interest in the Tapir Block is contingent on the assignment by Ecopetrol (NYSE:EC) SA of such interest to Arrow.
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.
Contact the author at jon.hopkins@proactiveinvestors.com
