REG - Arrow Exploration - 2024 Year-End Reserves Update
13/03/2025 07:15
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RNS Number : 4620A Arrow Exploration Corp. 13 March 2025
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Arrow Exploration Corp.
("Arrow" or the "Company")
2024 Year-end reserves update
RESERVES GROWTH IN ALL CATEGORIES. 2024 pdp RESERVES INCREASE 92% FROM 2023
1P and 2P reserveS replacement ratio OF 134% AND 231% respectively
CALGARY, March 13, 2025 - Arrow Exploration Corp. (AIM: AXL; TSXV: AXL) is
pleased to announce the results of its 2024 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, 2023.
Arrow's reserves growth in all categories demonstrates the high resource
density of our Tapir block. Further, moving forward, the Company is
confident that it can continue to grow through the drill bit at Tapir.
Highlights
- Proved Developed Producing ("PDP") reserves:
o Increased by 92% to 2.38 million barrels of oil equivalent ("MMboe"),
driven principally through the successful horizontal drilling campaign in
Carrizales Norte, on the Tapir Block, Colombia; and
o Net present value before tax, discounted at 10% ("NPV-10") is $71.3
million ($29.89/boe) for PDP reserves.
- Proved ("1P") reserves:
o Increased by 10% to 5.80 million barrels of oil equivalent ("MMboe"),
driven principally through the discovery of the Alberta Llanos field and the
successful horizontal drilling campaign in Carrizales Norte, both on the Tapir
Block, Colombia; and
o Net present value before tax, discounted at 10% ("NPV-10") is $114.57
million ($19.75/boe) for 1P reserves.
- Proved plus Probable ("2P") reserves:
o Increased by 15% to 13.62 MMboe;
o Before tax NPV-10 is $284.9 million ($20.92/boe) for 2P reserves.
- Proved plus Probable plus Possible ("3P") reserves:
o Increased by 25% to 22.28 MMboe;
o Before tax NPV-10 is $524.1 million ($23.52/boe) for 3P reserves.
- Strong well performance that translated into a higher reserves
volumes in comparison with the year-end 2023
- Despite using a lower forecast price deck than 2023, before tax
NPV10 values have increased in the PDP, 2P and 3P categories;
- Before tax NPV-10 per share of US$0.40/share, US$1.00/share, and
US$1.83/share for 1P, 2P, and 3P reserve categories, respectively;
- Excellent Reserves Recycle Ratios of 2.7 for 1P, 4.6 for 2P and
8.7 for 3P; and
- Reserves Replacement Ratios of 1.34 for 1P, 2.31 for 2P and 4.39
for 3P
CEO Commentary
Marshall Abbott, CEO of Arrow, commented: "Our exciting growth story continues
and we are pleased to be able to report further material reserves increases
from our extensive acreage in Colombia. Arrow delivered significant increases
in volumes of 1P, 2P and 3P reserves in 2024, due to the Alberta Llanos
Carbonera, Guadalupe and Ubaque discoveries and successfully drilling
horizontal wells at Carizales Norte. Reserves replacement ratios amounted to
134% 1P and 231% 2P, showing the sustainability of our business model to
continue its growth trajectory into the future. We are pleased with the
results of the BouryGEC reserves evaluation, which reinforces the significant
value of our Colombian and Canadian assets.
"The BouryGEC 2024 report does not reflect the most recent drilling activity
at Alberta Llanos or Carrizales Norte where particularly AB-3 (drilled and on
production in Q1 2025) and CN HZ-9 (drilled in Q1 2025 and currently cleaning
up) have not been incorporated into the report. The CN HZ-10 well has spud, as
part of the further development of the Carrizales Norte field to the north of
the existing development with results to be reported in due course.
"Arrow's prospect inventory is multifaceted and demonstrates the hydrocarbon
density of the Tapir block in the fertile Llanos Basin. Over the rest of 2025,
we look forward to a successful drilling campaign on a fully funded $50MM
capital budget that is balanced between development and low risk exploratory
wells".
2024 Year-End Reserves Summary
Management has presented below a summary of Arrow's reserves as at December
31, 2024, on a working interest gross reserves basis, which have been
estimated by BouryGEC, an independent qualified reserves evaluator, in a
reserves report with an effective date of December 31, 2024. The figures in
the following tables have been prepared in accordance with the standards
contained in the most recent publication of the Canadian Oil and Gas
Evaluation Handbook (the "COGEH") and the reserves definitions contained in
National Instrument 51-101 - Standards of Disclosure for Oil and Gas
Activities ("NI 51-101"). In addition to the summary information disclosed in
this announcement, more detailed information will be included in Arrow's
annual reserves evaluation for the year ended December 31, 2024 to be filed on
SEDAR (www.sedar.com) and posted on Arrow's website (www.arrowexploration.ca).
After tax values have been calculated without taking into account the tax
shelter created by capital spending on projects that do not have reserve
values associated with them, such as the Tapir 3D seismic project, drilling at
Carrizales Norte and annual G&A. Spending on these projects will provide a
tax shelter and result in a reduction in future income tax payments.
Brent Crude Oil Price and AECO Gas Price Forecasts in BouryGEC Reserves
Evaluation
Year-End Forecast: 2025 2026 2027 2028 2029 2030 2031
Brent (US$/bbl) - Dec. 31, 2024 $76.50 $78.50 $80.00 $81.50 $83.50 $85.17 $86.87
AECO-C Spot (C$/MMbtu) C$2.49 C$3.47 C$3.64 C$3.90 C$4.03 C$4.17 C$4.30
Year-End Working Interest Gross Reserves - Breakdown by Category and Country
(Mboe)
2024 2023 Change % Change
Proved developed producing 2,384 1,239 1145 92%
- Colombia assets (core) 1889 1011
- Colombia assets (non-core) 0 0
- Canada assets 495 228
Proved developed non-producing 404 714 (310) -43%
- Colombia assets (core) 198 503
- Colombia assets (non-core) 206 211
- Canada assets 0 0
Proved undeveloped 3,017 3,339 (322) -10%
- Colombia assets (core) 1,433 1757
- Colombia assets (non-core) 1,584 1,582
- Canada assets 0 0
Total Proved 5,805 5,292 513 10%
Probable 7,813 6,555 1258 19%
- Colombia assets (core) 4,511 3,292
- Colombia assets (non-core) 2,758 2,762
- Canada assets 544 501
Total Proved plus Probable 13,618 11,847 1771 15%
Possible 8,670 5,958 2712 46%
- Colombia assets (core) 6,915 4,349
- Colombia assets (non-core) 1,508 1,435
- Canada assets 247 174
Total Proved plus Probable & Possible 22,288 17,805 4483 25%
Possible reserves are those additional reserves that are less certain to be
recovered than probable reserves. There is a 10% probability that the
quantities actually recovered will equal or exceed the sum of proved plus
probable plus possible reserves.
(1) "Core" assets include Arrow's share of reserves in the Tapir
Block, the Santa Isabel Block (Oso Pardo), and Mateguafa. Arrow's 50% interest
in the Tapir Block is contingent on the assignment by Ecopetrol SA of such
interest to Arrow.
(2) "Non-core" assets include the Ombu Block (which includes the
Capella Field)
(3) "Canada" assets include Fir and Pepper
Year-End Net Present Value at 10% - Before Tax ($ Thousands)
Category 2024 2023 % Change
Proved
Developed Producing 71,253 46,021 55%
Developed Non-Producing 8,311 16,544 -50%
Undeveloped 35,009 72,310 -52%
Total Proved 114,572 134,875 -15%
Probable 170,347 145,348 17%
Total Proved plus Probable 284,919 280,223 2%
Possible 239,228 164,793 45%
Total Proved plus Probable & Possible 524,147 445,016 18%
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 2024 2023 % Change
Proved
Developed Producing 50,373 34,255 47%
Developed Non-Producing 5,794 11,137 -48%
Undeveloped 27,165 33,270 -18%
Total Proved 83,332 78,662 6%
Probable 78,064 73,113 7%
Total Proved plus Probable 161,396 151,775 6%
Possible 118,451 85,323 39%
Total Proved plus Probable & Possible 279,847 237,098 18%
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.
Forecast Revenues and Costs - Undiscounted ($ millions)
Category Revenue (3) Royalties Operating Cost (2) Development Cost Abandonment & Reclamation BT Future Net Revenue (1) Income Taxes AT Future Net Revenue (1)
Total Proved 312.8 31.1 69.0 64.7 8.7 139.4 37.0 102.4
Total Proved plus Probable 755.8 78.0 170.5 110.2 12.6 384.4 158.5 225.9
Total Proved plus Probable & Possible 1,347.5 146.8 288.6 121.3 14.5 776.3 350.2 426.1
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) BT = Before Taxes and AT = After Taxes
(2) Operating Cost less processing and other income
(3) Revenue includes Petrolco Income
2024 Year-End Working Interest Gross Reserves Reconciliation (Mboe)
Total Proved Total Proved plus Probable Total Proved plus Probable & Possible
31-Dec-23 5,292 11,847 17,805
Technical Revisions 1,186 1,578 2,799
Discoveries 307 1,167 2,529
Economic Factors 319 327 455
Production (1,300) (1,300) (1,300)
31-Dec-24 5,805 13,619 22,288
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 former member of the Canadian Society of Petroleum
Geologists, holds a B.Sc. in Geology from the University of Alberta and has
over 35 years' experience in the oil and gas industry.
Cautionary Statement
The recovery, reserve estimates and future net revenue provided in this news
release are estimates only, and there is no guarantee that the estimated
reserves will be recovered nor represent fair market value. 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.
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 +44 (0)20 7523 8000
James Asensio
George Grainger
Auctus Advisors (Joint Broker)
Jonathan Wright +44 (0)7711 627449
Rupert Holdsworth Hunt
Camarco (Financial PR)
Owen Roberts +44 (0)20 3781 8331
Rebecca Waterworth
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
Mboe: Thousands of barrel of oil equivalent
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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