Arrow Exploration Closed the Sale of the LLA-23 Block

Source: 12/30/2020, Location: South America

ARROW Exploration Corp. is pleased to announce the closing of the arm’s length disposition (the “Transaction”) of the LLA-23 Block to COG Energy Ltd. (“COG” or the “Purchaser”), as previously announced by the Company on August 24th, 2020. The gross proceeds from the Transaction, including customary closing adjustments, were approximately US$12 million.

The closing of the Transaction marks a significant step forward in Arrow’s strategic alternatives process (“Strategic Process”). The Strategic Process was originally announced by the Company on November 28th, 2019 and has been steadfastly pursued by Arrow’s existing senior management team since their appointment in April 2020.

Having closed the Transaction, Arrow expects to have a significantly strengthened balance sheet. Arrow intends to focus its efforts on the remainder of its assets in Colombia, including the Tapir Block (Arrow 50%, contingent on the assignment by Ecopetrol SA of such interest to Arrow), the Santa Isabel Block (Arrow 100%) and the Ombu Block (Arrow 10%).

Marshall Abbott, CEO of Arrow commented, “We are very pleased to announce the closing of the Transaction. The Company wishes to extend its gratitude to all our stakeholders for their continued support of Arrow, and for their patience throughout the Transaction process. We also wish to thank Arrow’s staff, some of whom have joined COG upon closing of the Transaction, for their dedication to the Company. Arrow’s management and Board, including myself, remain committed to creating value from the Company’s asset base.”

The Company obtained TSX Venture Exchange and Colombian regulatory approvals with respect to the Transaction. Although not required, the Company obtained the written approval, by way of a resolution, of shareholders holding in aggregate greater than 50% of the Company’s common shares.

Description of LLA-23
The LLA-23 Block is situated in the Llanos Basin, approximately 245 kilometers northeast of Bogotá, the capital city of Colombia. The LLA-23 Block contains the Labrador, Leono, Pantro, Tigro and Danes fields. The LLA-23 E&P Contract with the Agencia Nacional de Hidrocarburos (ANH) was originally awarded as part of the ANH’s Mini-Ronda 2008 land auction, with an effective date of March 13th, 2009.

The LLA-23 Block constituted approximately 27% of the Arrow’s corporate net acreage, approximately 28% of Arrow’s Proved & Probable reserves (net) as of year-end December 31st, 2019, and none of Arrow’s production at the closing of the Transaction.

Arrow’s financial advisor on the Transaction was Stifel FirstEnergy. Arrow’s legal advisors on the Transaction were Gowling WLG (Canada) LLP (Stuart Olley) and Posse Herrera Ruiz (Colombia) (Alvaro Rodriguez).

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