Arrow Exploration Announces First Ubaque Horizontal Well Results

Source: www.gulfoilandgas.com 6/19/2024, Location: South America

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-1

Arrow has put on production the first of four Ubaque horizontal wells planned for 2024. The first horizontal well on the Carrizales Norte "B" pad (CNB HZ-1) is exceeding expectations and is being restricted to a current flow rate of 3,150 BOPD gross (1,575 BOPD net to Arrow) with less than 1% 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-1 was spud on May 14, 2024, and reached target depth on 8,448 feet (true vertical depth) on June 7, 2024. The well was drilled to a total measured depth of 11,680 feet with a horizontal section of approximately 2,042 feet. The pay zone is a clean sandstone exhibiting consistent 28% porosity and high resistivities, similar characteristics to those seen in previous wells. Initial reservoir analysis exhibits multi-darcy permeability. An electric submersible pump (ESP) has been inserted in the well and is running at its minimum setting. The well is flowing and has been choked back in keeping with conservative reservoir management as well as ongoing development of adequate water disposal capabilities.

Upcoming Drilling

The rig has been moved to the second cellar on the Carrizales Norte B Pad where the Company plans to drill a dedicated water disposal well (CNB-2). Thereafter, the Company expects to drill three additional horizontal wells on the B pad, followed by the Baquiano-1 exploration well, which is on trend with the Carrizales Norte field. The three follow up wells will have longer horizontal sections, which are expected to result in enhanced rate and ultimate recovery.

Water Disposal Update

The RCE-1 water disposal well conversion on the Rio Cravo Este pad is complete and the disposal well is operational. During the conversion process, some production from the RCE pad was temporarily restricted, however, that production has now been restored.

The conversion of the CN-4 well to a water disposal well is progressing. The well is being equipped while waiting on regulatory approval. The Company has temporarily cut back production (approximately 250 BOPD net) from the existing wells at Carrizales Norte until the new water handling capability is in place. The CN-4 and CNB-2 water disposal wells are expected to be capable of disposing of sufficient water volumes to enable the entire Carizales Norte field development.

Oso Pardo and Capella Update

The Morsa 1 well in the Oso Pardo field, which experienced downhole equipment failure, is back on production, adding approximately 75 BOPD net.

The Capella field remains shut in, and the third-party operator is continuing to assess plans to restart the field. Net shut in production from the Capella field is approximately 230 BOPD.

Canada Update

Due to exceptionally low natural gas prices in Canada, the East Pepper and West Pepper wells have been temporarily shut in. These wells will restart once favorable economic conditions return. Net gas shut in is approximately 250 BOE/d net.

Corporate Update

Current net corporate production is approximately 3,600 BOE/D, inclusive of CNB HZ-1. Once the imminent additional water handling capacity is available, the existing wells on both the RCE and CN platforms will be produced more aggressively. Existing wells were curtailed waiting on water handling capacity.

Arrow's cash position was approximately $12.1 million USD on June 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 initial success of the first horizontal well at the CNB pad, which is currently exceeding expectations, is an important milestone in the development of the hydrocarbon-dense Ubaque formation. The horizontal technology proven by this well can now be used to exploit further prospects on the Tapir block, and potentially the Oso Pardo block."

"The CNB HZ-1 well was drilled, completed and brought on production under budget. Although initial production flows are not necessarily indicative of long-term performance, the Company is excited about the initial results of the well and the potential to grow reserves and production."

"The information obtained from the vertical development program in Q1 2024 at the Carrizales Norte field, such as Ubaque reservoir extent, uniformity, thickness and depth, has been instrumental in the planning and execution of the horizontal well program."

"Construction of the Baquiano pad is complete and the Company plans to move the Petroworks 1500 HP rig to the Baquiano pad once the current drilling program has been completed at the CNB pad."


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