TIDMAXL
RNS Number : 9912W
Arrow Exploration Corp.
24 August 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 ANNOUNCES OPERATIONS UPDATE, UPCOMING PROJECTS AND
MID-YEAR RESERVES RESULTS
Drilling success and Colombian oil prices resulted in a 164%
increase in 1P NPV, 79% increase in 2P NPV and 3P NPV increased by
67%, 2P reserve replacement ratio was 219%
CALGARY, August 24, 2022 - Arrow Exploration Corp. (AIM: AXL;
TSXV: AXL) ("Arrow" or the "Company"), is pleased to provide an
operations update and announce the results of the 2022 mid-year
reserve evaluation by Boury Energy Consultants Ltd. ("BouryGEC") as
at 30 June 2022.
Highlights
-- Proved (1P) Reserves:
o PDP reserves increased 25% to 1.292 MMBls mainly from the
Tapir Block.
o 1P reserves also increased by 17% to 3.567 MMBls reflecting
the positive results from the recent drilling campaign.
o 1P Net Present Value, before tax, discounted at 10%
("NPV-10"), is significantly higher with an increase of 164% to US$
77.7 million.
-- Proved plus Probable (2P reserves)
o 2P reserves increase to 7.864 MMBls of oil.
o NPV-10 increased to US$ 150.4 million from US$ 84.1 million as
at December 31, 2021, a 79% increase.
-- Proved plus Probable plus Possible (3P reserves):
o 3P reserves volume increase to 11.759 MMBls.
o NPV-10 grew 67% to US$ 223.6 million from US$ 133.9 million as
at 31 December 2021.
-- Oil price and new hydrocarbon accumulations resulted in
positive additions in reserves in all categories.
-- Additional drilling targets have been identified as a result
of the H1 2022 drilling campaign. A five well program will initiate
in Q4 2022 with two wells in pursuit of further low risk
exploitation on the RCE structure. As well, two wells are planned
to develop the Carizales Norte structure A downdip well will also
be drilled at RCE to test the stratigraphic nature of the oil
accumulation. This well will also serve as a water disposal
well.
Operational Update
Corporate production as of August 15, 2022, is approximately
1,450 boe/d. Production from the RCE-2 well is approximately 540
bbls/d net (1,080 bbls/d gross) producing from the C7A and C7
stringer zones. Production from the RCS-1 well is approximately 190
bbls/d net (380 bbls/d gross) producing only from the new C7B zone
at this time. In addition, organic growth opportunities for Arrow
are advancing, with the RCE-3 and RCE-4 wells on the Tapir Block in
Colombia expected to commence drilling in Q4 2022. Additional
completions will be performed in Q4 on the RCE-1 and RCS-1 wells to
further exploit known hydrocarbon accumulations. Current production
from the RCE 1 and RCS 1 wells is ahead of forecast in
aggregate.
Arrow expects to re-complete the RCE-1 well, in the C7 stringer
zone. Arrow is currently just producing from the C7B zone at RCS-1
and plans to re-complete this well, expecting to open the C7A and
C7 stringer zones in Q4 2022. This will have a material impact on
overall RCE production.
The West Pepper well, owned 100% by Arrow and located in Canada,
is producing at 240 boe/d currently, with production curtailed due
to third party facility constraints. Expectations are that
production will return to approximately 450 boe/d in September
2022. In Q3 2022, Arrow expects to tie-in the East Pepper gas well
in Canada (100% owned by Arrow). This second well, along with
continuing and expected robust natural gas prices in North America,
is expected to further enhance the value of the Pepper field.
In addition to the 3D seismic survey Arrow purchased earlier
this year, the Company intends to execute on a 130 square kilometer
3D seismic survey on the northwest section of the Tapir block in
Colombia. This will further delineate low risk exploration fault
structures that have been identified on 2-D seismic data. The
shooting of this seismic survey is expected to begin in Q1
2023.
2022 Mid-year Reserves Exercise
NPV-10 values increased 164% for 1P and 79% for 2P reserves.
The recent drilling campaign in Rio Cravo (Tapir Block,
Colombia) was very successful, resulting in the Company finding
four more hydrocarbon accumulations and increasing its 1P oil
reserves from 236 MBbls to 853 MBbls of oil. These results allow
Arrow to better understand the continuity of the reservoirs in RCE
and provide a foundation for the next phase of exploitation and
material reserve additions at RCE.
Total Arrow reserves increased from 3.04 MMBOE to 3.56 MMBOE for
1P, and from 7.42 MMBOE to 7.86 MMBOE for 2P.
2022 Mid-Year Reserves Summary
The summary below summarizes Arrow's reserves as of June 30,
2022, 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 reserves
evaluation report on certain properties as at 30 June 2022 to be
filed on SEDAR ( www.sedar.com ) and posted on Arrow's website (
www.arrowexploration.ca ).
Marshall Abbott, CEO of Arrow Exploration Corp., commented:
"Arrow delivered an increase in volumes and values in all reserve
categories. We are pleased with the results of the BouryGEC
independent reserves evaluation, which reinforces the significant
value of our Colombian and Canadian assets."
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)
As at 31 December
2021 $74.50 $72.00 $69.50 $71.00 $72.00 $74.00 $76.00
Brent (US$/bbl)
As at 30 June 2022 $110.00 $94.00 $85.00 $81.00 $82.62 $84.27 $85.96
C$6.58 C$4.68 C$4.26 C$4.01 C$4.09 C$4.17 C$4.25
AECO-C Spot (C$/MMbtu)
As at 30 June 2022
MID-YEAR RESERVES
Possible reserves are those additional reserves that are less
certain to be recovered than probable reserves. There is a 10%
probability that the quantities 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
Mid-Year Working Interest Gross Reserves - Breakdown by Category
and Country (Mboe)
2022 Mid 2021 Change % Change
Proved developed producing 1,292 1,037 255 25%
Colombia assets (core) 654 287
Colombia assets (non-core) 110 117
Canada assets 528 633
Proved developed non-producing 382 363 19 5%
Colombia assets (core) 63 63
Colombia assets (non-core) 58 42
Canada assets 261 258
Proved undeveloped 1,893 1,649 244 15%
Colombia assets (core) 337 88
Colombia assets (non-core) 1,556 1,561
Canada assets - -
Total Proved 3,567 3,049 518 17%
Probable 4,297 4,372 -75 -2%
Colombia assets (core) 859 1,232
Colombia assets (non-core) 2,744 2,446
Canada assets 694 694
Total Proved plus Probable 7,864 7,421 443 6%
Possible 3,895 4,120 -225 -5%
Colombia assets (core) 1,960 1,933
Colombia assets (non-core) 1,574 1,828
Canada assets 361 359
Total Proved plus Probable
& Possible 11,759 11,541 218 2%
Mid-Year Net Present Value at 10% - Before Tax (US$
Thousands)
Category 2022 Mid 2021 % Change
Proved
Developed Producing 40,054 11,406 251%
Non-Producing 4,628 2,113 119%
Undeveloped 33,024 15,889 108%
Total Proved 77,706 29,408 164%
Probable 72,721 54,738 33%
Total Proved plus Probable 150,427 84,146 79%
Possible 73,198 49,842 47%
Total Proved plus Probable
& Possible 223,626 133,988 67%
Mid-Year Net Present Value at 10% - After Tax (US$
Thousands)
Category 2022 Mid 2021 % Change
Proved
Developed Producing 32,833 11,170 194%
Non-Producing 4,072 2,112 93%
Undeveloped 19,899 11,705 70%
Total Proved 56,804 24,987 127%
Probable 45,169 33,886 33%
Total Proved plus Probable 101,973 58,873 73%
Possible 45,923 29,959 53%
Total Proved plus Probable
& Possible 147,895 88,832 66%
Forecast Revenues and Costs - Undiscounted (US$ millions)
(1) BT = Before Taxes and AT = After Taxes
(2) Operating Cost less processing and other income
(3) DC = Development Cost
Category Revenue Royalties Operating DC Abandonment BT Future Income AT Future
(3) Cost & Reclamation Net Revenue Taxes Net Revenue
(2) (1) (1)
Total
Proved 192.6 19.0 42.0 27.9 4.1 99.5 25.8 73.7
Total
Proved
plus Probable 413.3 38.8 81.0 63.9 6.6 222.9 67.6 155.3
Total
Proved
plus Probable
& Possible 660.0 68.6 134.0 79.1 7.9 370.4 117.2 253.1
2022 Mid-Year Gross Reserves Reconciliation (Mboe)
Total Total Proved plus Total Proved plus Probable
Proved Probable & Possible
31-Dec-21 3,049 7,421 11,540
Technical
Revisions 651.2 298.3 295.9
Economic Factors 75.2 351.2 130.9
Production -207.6 -207.6 -207.6
30-Jun-22 3,568 7,863 11,759
Exercise of Warrants and Total Voting Rights
The Company also announces that pursuant to the receipt of
notices for the exercise of warrants issued in October 2021, it has
issued 208,598 new common shares of no par value ("Common
Shares").
The application is being made for 208,598 new Common Shares to
be admitted to trading on AIM ("Admission"). It is expected that
Admission will occur on August 26, 2022. Following Admission, the
Company will have 216,175,741 Common Shares in issue with voting
rights and admitted to trading on AIM. This figure may be used as
the denominator for the calculations by which they will determine
if they are required to notify their interest in, or a change to,
their interest in the share capital of the Company under the
Financial Conduct Authority's Disclosure Guidance and Transparency
Rules.
For further Information, contact:
Arrow Exploration
Marshall Abbott, CEO +1 403 651 5995
Joe McFarlane, CFO +1 403 818 1033
Brookline Public Relations, Inc.
Shauna MacDonald +1 403 538 5645
Canaccord Genuity (Nominated Advisor
and Joint Broker)
Henry Fitzgerald-O'Connor
James Asensio
Gordon Hamilton +44 (0)20 7523 8000
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
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. 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".
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.
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
Bbl/d: Barrels per day
$/Bbl: Dollars per barrel
Mcf/d: Thousand cubic feet of gas per day
$/Mcf: Dollars per thousand cubic feet of gas
Boe/d: Barrels of oil equivalent per day
$/Boe: Dollars per barrel of oil equivalent
PDP: Proved Developed Producing
1P: Proved Reserves
2P: Proved plus Probable Reserves
3P: Proved plus Probable plus Possible Reserves
MMbtu: Millions btu
MMboe: Millions of barrels of oil equivalent
Working Interest Gross Reserves: The reserves attributable to
the Company's license working interest pre-taxes and royalties
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.
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END
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