Arrow announces second Ubaque horizontal well results

Arrow Exploration release

CALGARY, July 31, 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-3

The second of the Ubaque horizontal wells planned for 2024 is now on production.  The second horizontal well on the Carrizales Norte "B" pad (CNB HZ-3) is exceeding expectations and is being restricted to a current flow rate of 3,038 BOPD gross (1,519 BOPD net to Arrow) with less than 6.5% 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-3 was spud on July 4, 2024, and reached a target depth of 8,457 feet (true vertical depth) on July 18, 2024.  The well was drilled to a total measured depth of 12,320 feet with a horizontal section of approximately 3,050 feet. CNB HZ-3 came on production on July 26, 2024, with the use of an electric submersible pump (ESP) and, based on initial results, has displayed the same reservoir characteristics as CNB HZ-1.   

CNB HZ-1

The CNB HZ-1 is continuing to perform above expectations and is being restricted to a current flow rate of 2,220 BOPD gross (1,110 BOPD net to Arrow) with approximately 34% water cut.

CNB HZ-1 average production for the first 30 days of production (IP30) was 2,650 BOPD gross (1,325 net).  

Drilling Time and Costs

From spud to rig release the CNB HZ-1 took 30 days and cost approximately $4.9 million gross ($2.45 million net to Arrow).  The CNB HZ-1 well paid out in under 30 days.  Drilling operations at the CNB HZ-3 well took 21 days from spud to on production and cost approximately $4.0 million gross ($2.0 million net to Arrow).  The improvement represents the learnings taken from CNB HZ-1 as the operations team continues to focus on  improving capital and operating costs and creating further shareholder value.

Upcoming Drilling

The rig has been moved to the fourth cellar on the Carrizales Norte B Pad where the Company has spud the third horizontal well (CNB HZ-4).   Thereafter, the Company expects to drill the fourth horizontal well on the B pad, followed by the Baquiano-1 exploration well, which is on trend with the Carrizales Norte field.  Following the drilling program at Baquiano, Arrow plans to return to the CNB pad for two additional horizontal wells.

Water Disposal Update

The conversion of the CN-4 well to a water disposal well is complete and injection has commenced. The CNB-2 water disposal well has been completed and is awaiting stimulation work and regulatory approval prior to starting injection.

Corporate Update

Current net corporate production is approximately 4,560 BOE/D, inclusive of CNB HZ-1 and CNB HZ-3.

Arrow's cash position was approximately $11 million on July 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 continued success of the horizontal well program at the CNB pad, has led the Company to plan two additional horizontal wells which Arrow intends to drill before the end of 2024, depending on technical aspects and regulatory approvals.  This will result in a total of six horizontal wells at Carrizales Norte in 2024 with additional horizontal wells being planned in 2025 from a third pad.  The horizontal program continues to exceed expectations and to add production and reserves from the hydrocarbon-dense Ubaque formation. The Arrow team strives to reduce the time and costs needed to drill horizontal and vertical wells.  Internally generated development drilling and completion strategies will be used to exploit further prospects on the Company's land holdings."

"The production rates from the CNB HZ-1 well are exceeding the simulation results and the CNB HZ-3 well was drilled, completed and brought on production under budget. The Company is excited about the initial results of the well and the potential to further grow reserves and production."

"Production infrastructure including water disposal wells, dispersion fields and roads continue to be developed to increase production and prepare for the 2025 capital program."