TIDMAXL
RNS Number : 5449U
Arrow Exploration Corp.
29 March 2023
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")
Arrow Announces 2022 Year-end reserves
Before Tax NPV-10 values increased 97% for 1P and 51% for 2P
RESERVES,
1P and 2P reserve replacement ratio was 165% AND 164%
respectively
CALGARY, March 29, 2023 - Arrow Exploration Corp. (AIM: AXL;
TSXV: AXL) is pleased to announce the results of its 2022 year-end
reserves evaluation by Boury Global Energy Consultants Ltd.
("BouryGEC").
All reserves volume figures stated below are on a Working
Interest Gross Reserve basis. Currency amounts are in United States
dollars (unless otherwise indicated) and comparisons refer to
December 31, 2021.
Highlights
- Proved ("1P") reserves:
o Increased by 11% to 3.37 million barrels of oil equivalent
("MMboe "), driven principally through uplift at Tapir (Rio Cravo),
Colombia;
o Net present value before tax, discounted at 10% ("NPV-10") is
$57.9 million ($17.15/boe) for 1P reserves.
- Proved plus Probable ("2P") reserves:
o Increased by 4% to 7.69 MMboe;
o NPV-10 is $127.3 million ($16.56/boe) for 2P reserves.
- Proved plus Probable plus Possible ("3P") reserves:
o Increased by 1% to 11.68 MMboe;
o NPV-10 is $205.8 million ($17.57/boe) for 3P reserves.
- Before tax NPV-10 values have increased 97% for 1P and 51% for
2P, over year-end 2021, due to reserves growth and an increase in
the oil price forecast used by BouryGEC at year-end 2022; 2022
Proved Developed Producing ("PDP") reserves increased 27% to 1.31
MMboe supported by the improved performance of the new drilling in
the Rio Cravo Field; PDP reserves represent 39% 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;
- BouryGEC post tax NPVs impacted by changes in Colombian tax
regime in the year but pre other corporate tax shelters (further
detail below).
CEO Commentary
Marshall Abbott, CEO of Arrow, commented: "Arrow delivered an
increase in volumes and pre-tax values across 1P, 2P and 3P
reserves in 2022. We are pleased with the results of the BouryGEC
reserves evaluation, which reinforces the significant value of our
Colombian and Canadian assets.
The BouryGEC 2022 report of course does not account for the
current drilling campaign at Rio Cravo Este, where, given the
encouraging results to date, we might expect further
reclassifications and increase in reserves. Additionally, with the
imminent drilling of the Carrizales Norte wells, we would expect to
continue growing reserves in the near future.
2022 Year-End Reserves Summary
Management has presented below a summary of Arrow's reserves as
at December 31, 2022, on a working interest gross reserves basis,
which have been taken from and reconcile directly to 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, 2022 to be filed on SEDAR (www.sedar.com) and posted
on Arrow's website ( www.arrowexploration.ca ).
After tax values have been calculated without taking into
account the tax shelter created by capital spending on projects
that do not have reserve values associated with them, such as the
Tapir 3D seismic project, drilling at Carazales Norte and annual
G&A. Spending on these projects will provide tax shelter and
result in a reduction of tax for future.
Brent Crude Oil Price and AECO Gas Price Forecasts in BouryGEC
Reserves Evaluation
Year-End Forecast: 2023 2024 2025 2026 2027 2028 2029
Brent (US$/bbl) - Dec.
31, 2022 $85.00 $82.80 $80.50 $82.00 $84.20 $85.88 $87.60
------- ------- ------- ------- ------- ------- -------
AECO-C Spot (C$/MMbtu) C$4.83 C$4.50 C$4.31 C$4.42 C$4.53 C$4.64 C$4.61
------- ------- ------- ------- ------- ------- -------
Year-End Working Interest Gross Reserves - Breakdown by Category
and Country (Mboe)
2022 2021 Change % Change
Proved developed
producing 1,319 1037 282 27%
------- ------- ------- ---------
- Colombia assets
(core) 664 287
------- ------- ------- ---------
- Colombia assets
(non-core) 178 117
------- ------- ------- ---------
- Canada assets 475 633
------- ------- ------- ---------
Proved developed
non-producing 26 362 (336) (93%)
------- ------- ------- ---------
- Colombia assets
(core) 0 63
------- ------- ------- ---------
- Colombia assets
(non-core) 26 42
------- ------- ------- ---------
- Canada assets 0 258
------- ------- ------- ---------
Proved undeveloped 2,032 1,649 383 23%
------- ------- ------- ---------
- Colombia assets
(core) 453 88
------- ------- ------- ---------
- Colombia assets
(non-core) 1,579 1,561
------- ------- ------- ---------
- Canada assets 0 0
------- ------- ------- ---------
Total Proved 3,376 3,048 329 11%
------- ------- ------- ---------
Probable 4,314 4,373 (59) (1%)
------- ------- ------- ---------
- Colombia assets
(core) 1,003 1,232
------- ------- ------- ---------
- Colombia assets
(non-core) 2,765 2,446
------- ------- ------- ---------
- Canada assets 546 694
------- ------- ------- ---------
Total Proved plus
Probable 7,691 7,421 270 4%
------- ------- ------- ---------
Possible 3,989 4,119 (130) (3%)
------- ------- ------- ---------
- Colombia assets
(core) 2,224 1,933
------- ------- ------- ---------
- Colombia assets
(non-core) 1,513 1,828
------- ------- ------- ---------
- Canada assets 252 359
------- ------- ------- ---------
Total Proved plus
Probable & Possible 11,679 11,540 140 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) "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 2022 2021 % Change
Proved
-------- -------- ---------
Developed Producing 32,092 11,406 181%
-------- -------- ---------
Non-Producing 357 2,112 (83%)
-------- -------- ---------
Undeveloped 25,458 15,889 60%
-------- -------- ---------
Total Proved 57,906 29,407 97%
-------- -------- ---------
Probable 69,440 54,738 27%
-------- -------- ---------
Total Proved plus Probable 127,346 84,146 51%
-------- -------- ---------
Possible 78,471 49,842 57%
-------- -------- ---------
Total Proved plus Probable &
Possible 205,817 133,987 54%
-------- -------- ---------
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 2022 2021 % Change
Proved
------- ------- ---------
Developed Producing 19,509 11,170 75%
------- ------- ---------
Non-Producing 269 2,112 (87%)
------- ------- ---------
Undeveloped 9,092 11,705 (22%)
------- ------- ---------
Total Proved 28,871 24,987 16%
------- ------- ---------
Probable 28,618 33,886 (16%)
------- ------- ---------
Total Proved plus Probable 57,489 58,873 (2%)
------- ------- ---------
Possible 32,033 29,959 7%
------- ------- ---------
Total Proved plus Probable &
Possible 89,522 88,832 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.
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, 2022, Arrow is also providing readers with the
following sensitivity analysis as to the net present value of its
reserves.
Type of Sensitivity Total Proved Total Proved Total Proved
(US$MM) plus Probable plus Probable
(US$MM) & Possible
(US$MM)
BouryGEC Forecast Price
Case 28.9 57.5 89.5
------------- --------------- ---------------
WTI Premium of US$10/bbl 36.5 72.7 111.2
------------- --------------- ---------------
AECO Premium of C$0.30/MMBtu 29.2 58.2 90.3
------------- --------------- ---------------
Readers are cautioned that there is no certainty that the
forecast price of crude oil or natural gas will increase as
calculated by changes to the Dec. 31, 2022 BouryGEC price deck used
in the Reserves Evaluation report.
Forecast Revenues and Costs - Undiscounted ($ 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 159.5 15.3 34.2 32.4 4.3 73.3 34.7 38.6
------------ ---------- ------------- ----- ------------ ------------ ------------- ------------
Total Proved
plus
Probable 354.0 33.3 62.9 67.4 6.9 183.6 93.2 90.4
------------ ---------- ------------- ----- ------------ ------------ ------------- ------------
Total Proved
plus
Probable &
Possible 591.2 63.2 105.7 82.1 8.2 332.0 174.3 157.7
------------ ---------- ------------- ----- ------------ ------------ ------------- ------------
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 Working Interest Gross Reserves Reconciliation
(Mboe)
Total Proved Total Proved Total Proved
plus Probable plus Probable
& Possible
31-Dec-21 3,049 7,421 11,541
------------- --------------- ---------------
Technical Revisions 745 395 503
------------- --------------- ---------------
Economic Factors 58 352 112
------------- --------------- ---------------
Production (476) (476) (476)
------------- --------------- ---------------
31-Dec-22 3,376 7,692 11,680
------------- --------------- ---------------
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.
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").
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 + 44 (0)7711 627449
Rupert Holdsworth Hunt
Camarco (Financial PR)
Georgia Edmonds +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
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".
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.
"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
Mbtu: Thousands btu
Mboe: Thousands of barrels of oil equivalent
Working Interest Gross Reserves: The reserves attributable to
the Company's license working interest pre-taxes and royalties
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END
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