REG - Arrow Exploration - Arrow Announces Maiden Carrizales Norte Reserves

Arrow ExplorationAnnouncement

11/09/2023 07:00

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RNS Number : 9346L  Arrow Exploration Corp.  11 September 2023

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JURISDICTION.

Arrow Announces MAIDEN CARRIZALES NORTE reserves

Corporate ECONOMIC 1P, 2P and 3P Reserves doubled.

CaRRIZALES NORTE Before Tax NPV-10 values $143.5 MMusd AND 3.92  MMBBLS 2P
RESERVES,

CALGARY, September 11, 2023 - Arrow Exploration Corp. (AIM: AXL; TSXV: AXL),
the high-growth operator with a portfolio of assets across key Colombian
hydrocarbon basins, is pleased to announce the results of its maiden
Carrizales Norte ("CN") reserves evaluation by Boury Global Energy Consultants
Ltd. ("BouryGEC") as at August 31, 2023.

All reserves volume figures stated below are solely at the discovery on the
CN field on the Tapir Block in the Llanos Basin of Colombia where Arrow holds
a 50% beneficial interest. The Company's other assets in the Tapir Block, Rio
Cravo Este (RCE) and its other license interests, Columbia and Canada, have
not formed part of this evaluation.

All reserves volume figures stated below are on a Working Interest Gross
Reserve basis. Currency amounts are in United States dollars, unless otherwise
indicated.

Highlights

-      CN Proved ("1P") reserves:

o  1.82 million barrels of oil ("MMbbls"),

o  Net present value before tax, discounted at 10% ("NPV-10") is $71.2
million for 1P reserves.

-      CN Proved plus Probable ("2P") reserves:

o  3.92 MMbbls,

o  NPV-10 is $143.5 million for 2P reserves.

-      CN Proved plus Probable plus Possible ("3P") reserves:

o  6.62 MMbbls,

o  NPV-10 is $244.1 million for 3P reserves.

-      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 reserves categories, respectively;

-      BouryGEC post-tax NPVs impacted by changes in Colombian tax regime
in the year and exclude the effect of corporate tax shelters (further detail
below).

 

 

CEO Commentary

Marshall Abbott, CEO of Arrow, commented: "The Carrizales Norte field is a
material discovery for Arrow as the reserves report confirms. The Carrizales
Norte reserves have doubled the 1P, 2P and 3P total reserves and value of
Arrow.  We are pleased with the results of the BouryGEC reserves evaluation,
which reinforces the significant value of our Carrizales Norte asset at
Tapir."

"The 3D program on the west of the Tapir block completed this year has also
helped further develop prospects that we feel could show results similar to
the Carrizales Norte and Rio Cravo Este fields. The Company plans to explore
these prospects in the coming months and years."

Carrizales Norte Maiden Reserves Summary as at August 31, 2023

Management has presented below a summary of Arrow's CN reserves as at August
31, 2023, on a Working Interest Gross Reserves basis (see glossary of terms),
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 CN
reserves evaluation for the date ended August 31, 2023 to be filed on SEDAR
(www.sedar.com) and posted on Arrow's website (www.arrowexploration.ca
(http://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 and annual
G&A. Spending on these projects will provide tax shelter and result in a
reduction of tax in the future.

 

Brent Crude Oil Price Forecasts in BouryGEC Reserves Evaluation

 Year-End Forecast:               2023    2024    2025    2026    2027    2028    2029
 Brent (US$/bbl) - June 30, 2023  $76.50  $77.50  $78.00  $79.00  $81.00  $84.00  $85.58

 

 

Carrizales Norte August 31, 2023 Working Interest Gross Reserves - Breakdown
by Category (Mboe)

                                            2023
 Proved developed producing                 278
  - Carrizales Norte (core)                 278
 Proved developed non-producing             228
  - Carrizales Norte (core)                 228
 Proved undeveloped                         1,314
  - Carrizales Norte (core)                 1,314
 Total Proved                               1,820
 Probable                                   2,099
  - Carrizales Norte (core)                 2,099
 Total Proved plus Probable                 3,919
 Possible                                   2,704
  - Carrizales Norte (core)                 2,704
 Total Proved plus Probable & Possible      6,622

 

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 Carrizales Norte
field on the Tapir block. Arrow's 50% interest in the Tapir Block is
contingent on the assignment by Ecopetrol SA of such interest to Arrow.

 

 

Carrizales Norte Net Present Value at 10% - Before Tax ($ Thousands) as at
August 31, 2923

 Category                                   2023
 Proved
   Developed Producing                      7,516
   Non-Producing                            10,490
   Undeveloped                              53,176
 Total Proved                               71,182
   Probable                                 72,310
 Total Proved plus Probable                 143,492
   Possible                                 100,633
 Total Proved plus Probable & Possible      244,125

 

 

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.

 

Carrizales Norte Net Present Value at 10% - After Tax ($ Thousands) as at
August 31, 2023

 Category                                   2023
 Proved
   Developed Producing                      3,232
   Non-Producing                            5,221
   Undeveloped                              25,616
 Total Proved                               34,069
   Probable                                 32,544
 Total Proved plus Probable                 66,613
   Possible                                 47,107
 Total Proved plus Probable & Possible      113,721

 

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.

 

 

Carrizales Norte Forecast Revenues and Costs - Undiscounted ($ millions)

 Category                                   Revenue (3)  Royalties  Operating Cost (2)  Development Costs  Abandonment & Reclamation      BT Future Net Revenue (1)  Income Taxes  AT Future Net Revenue (1)
 Total Proved                               122.7        14.1       7.9                 17.4               1.0                            82.3                       42.2          40.1
 Total Proved plus Probable                 271.6        32.0       23.4                31.6               1.9                            182.7                      96.2          86.5
 Total Proved plus Probable & Possible      470.3        56.4       41.2                36.4               2.7                            333.6                      176.2         157.4

 

 

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

 

 

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
of 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

The estimates of reserves and future net revenue for individual properties may
not reflect the same confidence level as estimates of reserves and future net
revenue for all properties, due to the effects of aggregation.

 

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

 Gordon Hamilton

 Auctus Advisors (Joint Broker)
 Jonathan Wright                                                                        +44 (0)7711 627449
 Rupert Holdsworth Hunt

 Camarco (Financial PR)
 Andrew Turner                                                                          +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

Bbls: Barrels

PDP: Proved Developed Producing

1P: Proved Reserves

2P: Proved plus Probable Reserves

3P: Proved plus Probable plus Possible Reserves

Working Interest Gross Reserves: The reserves attributable to the Company's
license working interest pre-taxes and royalties. The Company has a 50%
working Interest in the Tapir Licence which is subject to formal assignment by
Ecopetrol.

 

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