Arrow Exploration - High Margin Oil Production Funds Development

Arrow Exploration Corp. is a publicly-traded oil and gas company with a portfolio of both Colombian and Canadian Assets. The company believes that its Colombian oil assets are under-exploited, under-explored and offer high potential growth. The Canadian assets of the company show great short term growth potential.

Matt Gordon caught up with Marshall Abbott, CEO of Arrow Exploration to discuss their high margin oil production which will fund development.

Company Overview

Arrow Exploration Corp. believes that its assets have the potential to deliver a USD$ 20 million a year cash flow which will have a great effect on the company’s share price. The company plans to develop its assets in the coming year with various development and exploration initiatives planned. The company has a seasoned management team that has developed various oil and gas operations in the past.

Management

Marshall Abbott is the Chief Executive Officer (CEO) of Arrow Explorations and is a highly accomplished oil and gas executive. Abbott has built and sold various oil and gas companies throughout his almost 40-year career in the industry including Bernum Petroleum Inc., which was sold to Caltex Resources Ltd. Sabretooth Energy Inc. which was sold to Cequence Energy Ltd., Cougar Hydrocarbons Ltd. which was sold to Starpoint Energy and Equatorial Energy Ltd. which was sold to Resolute Energy Corp.

Joe McFarlane serves as the company’s Chief Financial Officer (CFO) and has more than 25 years of experience in the oil and gas industry, both in Canada and internationally. McFarlane’s most recent position before joining Arrow Exploration Corp was as the CFO of Rampart Oil Inc., a company he co-founded. McFarlane and Abbott have been working together for many years with McFarlane co-founding Bernum Petroleum Inc. and Sabretooth Energy Inc.

Bob Petryk is the Manager of Operations and has more than 40 years of experience in the technical, operational and managerial aspects of the oil and gas sector in Canada and abroad. Petryk has in the past held various senior management and executive positions in the energy and petroleum sector as well as in the oilfield service sector. 

Phil Miller serves as the senior vice president of exploration and has been involved in the exploration of projects throughout Africa, the Middle East, Latin America and the North Sea. Miller has in the past held various senior management positions with Pan African Oil, Nexen and Home Oil International.

Max Satel rounds out this well-experienced management team as the Executive Vice President of Corporate Development and Investor Relations. Satel has been involved in various industries and has a reputation for implementing data-driven solutions that position corporate clients for turnaround, growth and performance.

This well-experienced management team is responsible for the company’s high growth potential assets located in Colombia and Canada.

Assets

The assets of Arrow Exploration Corp are primarily located in Colombia, with the Company believing that the Colombian oil and gas industry holds high potential various advantages above the rest of the world. Colombia’s advantages include access to infrastructure with spare pipeline capacity, which includes two port facilities in the Caribbean providing ample export capacity.

The Colombian government is very supportive of the oil and gas industry, with more than 30% of the country’s exports being oil. Colombia also has attractive tax and royalty regimes in place for companies which the government introduced between 2003 and 2004. The implementation of the tax and royalty regimes led to the oil and gas industry of the country doubling between 2004 and 2012.

Tapir Block

The Tapir Block asset of the company is located in the Llanos Basin of Colombia.  The asset is a 100 square mile property with excellent subsurface fundamentals. The subsurface geography of Tapir Block asset is highly recognisable according to the company and consists of 6 separate fault trends. Arrow Exploration Corp. believes that each trend holds an 80% chance of containing oil. The company’s estimate is based on the completion of a 3D seismic analysis of each fault trend.

The Tapir Block asset of the company is currently producing oil at USD$ 15 per barrel, but the company believes that as it adds volume through its exploration initiatives the production costs may be lowered to between USD$ 9 – USD$ 10 a barrel.

The Carrizales Norte Prospect of the Tapir block holds large exploration potential according to Arrow Exploration Corp with the company believing it may hold 4 to 5 development wells in the future.

Oso Pardo

The Oso Pardo asset of the company was discovered in 2013 by Canacol Energy Ltd. and had an initial production rate of 200 barrels per day. The Oso Pardo asset has had two additional appraisal wells drilled on it in 2014 with its now holding a total of 3 producing wells. 

Arrow Exploration Corp has applied for a block extension permit at the Oso Pardo asset, due to independent analysis of the asset by Gaffney, Cline & Associates indicating that the underlying oil accumulation is much larger than previously estimated. The analysis coupled with 3D seismic analysis of the asset has shown that it has the potential to produce between  3,500 to 4,000 barrels of oil a day.

Canadian Montney Assets

The Canadian Montney Asset of the company is a low-risk, low-cost behind-pipe natural gas discovery located in Alberta, Canada. Arrow Exploration Corp. tied in the 3-26 West Pepper Montney well in December 2021 at a cost of USD$ 1.3 million. The 3-26 West Pepper Montney well added 1,030 barrels of oil equivalent (BOE) per day and the option exists to also tie in the East Pepper Montney well. The East Pepper Montney well of the company holds 1.8 thousand cubic feet of gas.

The company believes that its assets have the potential to deliver USD$ 20 million a year cash flow which is based on strip pricing.

Marshall Abbott believes that the potential cash flow will have a great effect on the company’s share price, stating:

“…that would deliver significant cash flow per share, which could drive a quantum shift in share price as we execute in the field.”

Future

Looking to the future, Arrow Exploration believes that its Oso Pardo asset has great promise. The 3 producing wells of the property in addition to its 3D seismic analysis has led the company to discover much larger oil accumulation than initially thought. The company believes that the asset will have additional production potential in the near future, with its block extension application recently submitted. The company believes that the Oso Pardo property will add upwards of 3,500 to 4,000 barrels a day of production. The additional planned wells have a short payback period according to the company with it being between 3-4 months.

The company is further planning on expanding its Tapir block asset with the commencement of drilling at its RCE-2 well planned for the middle of March 2022. The drilling is expected to take 2 weeks, from where the well production testing will take another 2 weeks. Arrow Exploration will then continue with the drilling of a third and fourth well from where it plans to return to its initial RCE-1 well. The initial RCE-1 well penetrated 4 separate hydrocarbon-bearing zones down to 10,000 ft. The shallowest zone of the well was chosen to be completed at the time by previous operators, which resulted in the production of 750 barrels a day.

The company also believes that its Carrizales Norte prospect, which goes right to the boundary of the Tapir block, has great potential. The prospect is adjacent to a producing field that has to date delivered 8.5 million barrels of oil. 

Arrow Exploration further plans to develop its Canadian asset in the near future, with it able to deliver 5.5 million cubic feet of gas a day. The company believes that with the current gas prices in Alberta, Canada and the asset's proximity to an existing pipeline, the asset has the potential to produce approximately CAD$ 10,000 a day.

The time necessary to tie into the existing pipeline and generate cash flow is anticipated to be between 60 to 90 days according to the company, leading to the Montney asset having near-term potential.  

‍To find out more, go to the Arrow Exploration website