TIDMAXL
RNS Number : 4725G
Arrow Exploration Corp.
30 March 2022
30 March 2022
NOT FOR RELEASE, DISTRIBUTION, PUBLICATION, DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM THE UNITED
STATES, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER
JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
Arrow Exploration Corp.
("Arrow" or the "Company")
2021 Year-end reserves
NPV-10 values increased 208% for 1P and 146% for 2P RESERVES
PDP reserves increased 152% to 1.0 MMboe on the back of the
recent tie-in at West Pepper; PDP reserves represent 34% of 1P
reserves, reflecting an attractive ratio of base production to
low-risk drilling targets
Before tax NPV-10 per share of US$0.14/share, US$0.39/share, and
US$0.63/share for 1P, 2P, and 3P reserve categories,
respectively
Arrow Exploration Corp. (AIM: AXL ; TSXV: AXL) is pleased to
announce the results of its 2021 year-end reserves evaluation by
Boury Global Energy Consultants Ltd. ("BouryGEC").
Currency amounts are in United States dollars (unless otherwise
indicated) and comparisons refer to December 31, 2020.
Highlights
- Proved ("1P") reserves:
o Increased by 4.1% to 3.0 million barrels of oil equivalent
("MMboe "), driven principally through uplift at Santa Isabel (Oso
Pardo), Colombia;
o Net Present Value (before tax, discounted at 10% ("NPV-10"))
is $29.4 million ($10.65/boe) for 1P reserves.
- Proved plus Probable ("2P") reserves:
o Increased by 5.5% to 7.4 MMboe;
o NPV-10 is $84.1 million ($12.55/boe) for 2P reserves.
- Proved plus Probable plus Possible ("3P") reserves:
o Increased by 10.1% to 11.5 MMboe;
o NPV-10 is $134.0 million ($12.94/boe) for 3P reserves.
- NPV-10 values have increased 208% for 1P and 146% for 2P, over
year-end 2020, due to reserves growth and an increase in the oil
price forecast used by BouryGEC at year-end 2021;
- 2021 Proved Developed Producing ("PDP") reserves increased
152% to 1.0 MMboe on the back of the recent tie-in at West Pepper,
Canada; PDP reserves represent 34% of 1P reserves, reflecting an
attractive ratio of base production to low-risk drilling targets;
and
- Before tax NPV-10 per share of US$0.14/share, US$0.39/share,
and US$0.63/share for 1P, 2P, and 3P reserve categories,
respectively.
CEO Commentary
Marshall Abbott, CEO of Arrow, commented: "Arrow delivered an
increase in volumes and values across 1P, 2P and 3P reserves in
2021. We are pleased with the results of the BouryGEC reserves
evaluation, which reinforces the significant value of our Colombian
and Canadian assets".
2021 Year-End Reserves Summary
The summary below summarizes Arrow's reserves as at December 31,
2021, as presented in the reserves report prepared by BouryGEC, an
independent qualified reserves evaluator. The figures in the
following tables have been prepared in accordance with the
standards contained in the most recent publication of the Canadian
Oil and Gas Evaluation Handbook (the "COGEH") and the reserve
definitions contained in National Instrument 51-101 - Standards of
Disclosure for Oil and Gas Activities ("NI 51-101"). In addition to
the summary information disclosed in this announcement, more
detailed information will be included in Arrow's annual reserves
evaluation for the year ended December 31, 2021 to be filed on
SEDAR (www.sedar.com) and posted on Arrow's website (
www.arrowexploration.ca ).
Brent Crude Oil Price and AECO Gas Price Forecasts in BouryGEC
Reserves Evaluation
Year-End Forecast: 2022 2023 2024 2025 2026 2027 2028
Brent (US$/bbl) - Dec. 31, 2020 $54.00 $57.00 $60.00 $62.00 $64.00 $65.00 $66.00
------- ------- ------- ------- ------- ------- -------
Brent (US$/bbl) - Dec. 31, 2021 $74.50 $72.00 $69.50 $71.00 $72.00 $74.00 $76.00
------- ------- ------- ------- ------- ------- -------
AECO-C Spot (C$/MMbtu) C$3.71 C$3.28 C$2.99 C$3.10 C$3.13 C$3.25 C$3.24
------- ------- ------- ------- ------- ------- -------
Year-End Gross Reserves - Breakdown by Category and Country
(MMboe)
2021 2020 Change % Change
Proved developed producing 1,037 411 626 152%
------- ------- ------- ---------
- Colombia assets (core) 287 148
------- ------- ------- ---------
- Colombia assets (non-core) 117 -
------- ------- ------- ---------
- Canada assets 633 263
------- ------- ------- ---------
Proved developed non-producing 362 715 (353) (49%)
------- ------- ------- ---------
- Colombia assets (core) 63 106
------- ------- ------- ---------
- Colombia assets (non-core) 42 -
------- ------- ------- ---------
- Canada assets 258 608
------- ------- ------- ---------
Proved undeveloped 1,649 1,804 (155) (9%)
------- ------- ------- ---------
- Colombia assets (core) 88 133
------- ------- ------- ---------
- Colombia assets (non-core) 1,561 1,672
------- ------- ------- ---------
- Canada assets - -
------- ------- ------- ---------
Total Proved 3,048 2,930 118 4%
------- ------- ------- ---------
Probable 4,373 4,104 269 7%
------- ------- ------- ---------
- Colombia assets (core) 1,232 1,024
------- ------- ------- ---------
- Colombia assets (non-core) 2,446 2,389
------- ------- ------- ---------
- Canada assets 694 691
------- ------- ------- ---------
Total Proved plus Probable 7,421 7,034 387 6%
------- ------- ------- ---------
Possible 4,119 3,446 673 20%
------- ------- ------- ---------
- Colombia assets (core) 1,933 1,858
------- ------- ------- ---------
- Colombia assets (non-core) 1,828 1,228
------- ------- ------- ---------
- Canada assets 359 360
------- ------- ------- ---------
Total Proved plus Probable
& Possible 11,540 10,480 1,060 10%
------- ------- ------- ---------
Possible reserves are those additional reserves that are less
certain to be recovered than probable reserves. There is a 10%
probability that the quantities actually recovered will equal or
exceed the sum of proved plus probable plus possible reserves.
(1) "Core" assets include Arrow's share of reserves in the Tapir
Block, the Santa Isabel Block (Oso Pardo), and Mateguafa. Arrow's
50% interest in the Tapir Block is contingent on the assignment by
Ecopetrol SA of such interest to Arrow.
(2) "Non-core" assets include the Ombu Block (which includes the Capella Field)
(3) "Canada" assets include Fir and Pepper
Year-End Net Present Value at 10% - Before Tax ($ Thousands)
Category 2021 2020 % Change
Proved
-------- ------- ---------
Developed Producing 11,406 4,466 155%
-------- ------- ---------
Non-Producing 2,113 2,881 (27%)
-------- ------- ---------
Undeveloped 15,889 2,207 620%
-------- ------- ---------
Total Proved 29,408 9,554 208%
-------- ------- ---------
Probable 54,738 24,703 122%
-------- ------- ---------
Total Proved plus Probable 84,146 34,257 146%
-------- ------- ---------
Possible 49,842 29,494 69%
-------- ------- ---------
Total Proved plus Probable & Possible 133,988 63,751 110%
-------- ------- ---------
Possible reserves are those additional reserves that are less
certain to be recovered than probable reserves. There is a 10%
probability that the quantities actually recovered will equal or
exceed the sum of proved plus probable plus possible reserves.
Year-End Net Present Value at 10% - After Tax ($ Thousands)
Category 2021 2020 % Change
Proved
------- ------- ---------
Developed Producing 11,170 4,466 150%
------- ------- ---------
Non-Producing 2,112 2,881 (27%)
------- ------- ---------
Undeveloped 11,705 1,896 517%
------- ------- ---------
Total Proved 24,987 9,243 170%
------- ------- ---------
Probable 33,886 18,834 78%
------- ------- ---------
Total Proved plus Probable 58,873 28,077 110%
------- ------- ---------
Possible 29,959 19,922 50%
------- ------- ---------
Total Proved plus Probable & Possible 88,832 47,999 85%
------- ------- ---------
Possible reserves are those additional reserves that are less
certain to be recovered than probable reserves. There is a 10%
probability that the quantities actually recovered will equal or
exceed the sum of proved plus probable plus possible reserves.
Year-End Net Present Value at 10% - After Tax ($ millions) -
Sensitivity Cases
In the context of the Brent crude oil and AECO gas prices
prevailing at the time of the publication of this press release,
when compared generally to the Brent crude oil and AECO gas price
forecasts used in the BouryGEC Reserves Evaluation for the year
ended December 31, 2021, Arrow is also providing readers with the
following sensitivity analysis as to the net present value of its
reserves.
Type of Sensitivity Total Proved (US$MM) Total Proved plus Probable Total Proved plus Probable &
(US$MM) Possible (US$MM)
BouryGEC Forecast Price Case 25.0 58.9 88.8
--------------------- ------------------------------- ------------------------------
WTI Premium of US$10/bbl 33.3 77.4 117.1
--------------------- ------------------------------- ------------------------------
AECO Premium of C$0.30/MMBtu 25.7 60.0 90.2
--------------------- ------------------------------- ------------------------------
Readers are cautioned that there is no certainty that the
forecast price of crude oil or natural gas will increase as
calculated by changes to the Dec. 31, 2021 BouryGEC price deck used
in the Reserves Evaluation report.
Forecast Revenues and Costs - Undiscounted ($ millions)
Category Revenue (3) Royalties Operating DC Abandonment BT Future Income Taxes AT Future
Cost (2) & Net Revenue Net Revenue
Reclamation (1) (1)
Total Proved 110.2 9.3 37.8 20.4 3.3 39.6 5.3 34.2
------------ ---------- ------------- ----- ------------ ------------ ------------- ------------
Total Proved
plus
Probable 301.8 27.5 74.9 55.8 5.4 138.2 37.2 100.9
------------ ---------- ------------- ----- ------------ ------------ ------------- ------------
Total Proved
plus
Probable &
Possible 516.2 52.9 126.1 79.6 7.2 250.5 76.4 174.1
------------ ---------- ------------- ----- ------------ ------------ ------------- ------------
Possible reserves are those additional reserves that are less
certain to be recovered than probable reserves. There is a 10%
probability that the quantities actually recovered will equal or
exceed the sum of proved plus probable plus possible reserves.
(1) BT = Before Taxes and AT = After Taxes
(2) Operating Cost less processing and other income
(3) Revenue includes Petrolco Income
2021 Year-End Gross Reserves Reconciliation (MMboe)
Total Proved Total Proved plus Probable Total Proved plus Probable & Possible
December 31, 2020 2,930 7,034 10,480
------------- --------------------------- --------------------------------------
Technical Revisions 130 225 251
------------- --------------------------- --------------------------------------
Economic Factors 165 338 985
------------- --------------------------- --------------------------------------
Production (176) (176) (176)
------------- --------------------------- --------------------------------------
December 31, 2021 3,049 7,421 11,540
------------- --------------------------- --------------------------------------
Possible reserves are those additional reserves that are less
certain to be recovered than probable reserves. There is a 10%
probability that the quantities actually recovered will equal or
exceed the sum of proved plus probable plus possible reserves.
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 is 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.
The recovery and reserve estimates provided in this news release
are estimates only, and there is no guarantee that the estimated
reserves will be recovered. Actual reserves may eventually prove to
be greater than, or less than, the estimates provided herein. In
certain of the tables set forth above, the columns may not add due
to rounding.
Cautionary Statement
This press release contains various references to the
abbreviation "BOE" which means barrels of oil equivalent. Where
amounts are expressed on a BOE basis, natural gas volumes have been
converted to oil equivalence at six thousand cubic feet (Mcf) per
barrel (bbl). The term BOE may be misleading, particularly if used
in isolation. A BOE conversion ratio of six thousand cubic feet per
barrel is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a
value equivalency at the wellhead.
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
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 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 under the symbol "AXL".
For further Information, contact:
Arrow Exploration
Marshall Abbott, CEO +1 403 651 5995
Max Satel, EVP Corporate Development
& Investor Relations +1 416 904 2258
Arden Partners (Joint Broker and
Nominated Adviser)
Ruari McGirr / Richard Johnson
(Corporate) +44 (0)20 7614 5900
Seb Wykeham / Simon Johnson (Broking)
Auctus Advisors (Joint Broker)
Jonathan Wright (Corporate) + 44 (0)7711 627449
Rupert Holdsworth Hunt (Broking)
Camarco (Financial PR)
James Crothers +44 (0)20 3781 8331
Rebecca Waterworth
Billy Clegg
Reserves Categories
Reserves are estimated remaining quantities of oil and natural
gas and related substances anticipated to be recoverable from known
accumulations, from a given date forward, based on analysis of
drilling, geological, geophysical and engineering data; the use of
established technology; and specified economic conditions which are
generally accepted as being reasonable and shall be disclosed.
"Proved Developed Producing Reserves" are those reserves that
are expected to be recovered from completion intervals open at the
time of the estimate. These reserves may be currently producing or,
if shut-in, they must have previously been on production, and the
date of resumption of production must be known with reasonable
certainty.
"Proved Developed Non-Producing Reserves" are those reserves
that either have not been on production or have previously been on
production but are shut-in and the date of resumption of production
is unknown.
"Proved Undeveloped Reserves" are those reserves expected to be
recovered from known accumulations where a significant expenditure
(e.g., when compared to the cost of drilling a well) is required to
render them capable of production. They must fully meet the
requirements of the reserves category (proved, probable, possible)
to which they are assigned.
"Proved" reserves are those reserves that can be estimated with
a high degree of certainty to be recoverable.
"Probable" reserves are those additional reserves that are less
certain to be recovered than Proved reserves but more certain to be
recovered than Possible reserves.
"Possible" reserves are those additional reserves that are less
likely to be recoverable than Probable reserves.
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.
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