REG - Arrow Exploration - Arrow Announces Q3 2025 Interim Results
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RNS Number : 1778J Arrow Exploration Corp. 27 November 2025
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OR IN PART, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, JAPAN, THE
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JURISDICTION.
ARROW ANNOUNCES Q3 2025 INTERIM RESULTS
CALGARY, November 27, 2025 - 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 announce the
filing of its Interim Condensed (unaudited) Consolidated Financial Statements
and Management's Discussion and Analysis ("MD&A") for the three and nine
months ended September 30, 2025, which are available on SEDAR (www.sedar.com
(http://www.sedar.com) ) and will also be available shortly on Arrow's website
at www.arrowexploration.ca (http://www.arrowexploration.ca) .
Q3 2025 Highlights:
· Average corporate production of 4,214 boe/d (Q3 2024: 4,124 boe/d).
· Recorded $18.5 million of total oil and natural gas revenue, net of
royalties.
· Realized corporate oil operating netbacks((1)) of $38.21/bbl.
· Cash position of $6.3 million at the end of Q3 2025.
· YTD generated operating cashflows of $25 million.
· Drilled two additional development wells in the Carrizales Norte (CN)
field in the Tapir block, and an exploration well in Mateguafa Oeste (MO).
· Net YTD income of $4.8 million.
((1))Non-IFRS measures - see "Non-IFRS Measures" section within the MD&A
Post Period End Highlights:
· Drilled the Mateguafa Attic wells: Mateguafa-5 (M-5) and Mateguafa-6
(M-6), and spud the Mateguafa-7 Horizontal well (M-HZ7)
Cash Balance:
On November 1, 2025, the Company's cash balance was US$8.2 million. This
reflects an intensive period of capital outlay as the Company contracted a
second rig during Q2 and Q3 and built access roads and drill pads
at Carrizales Norte, Mataguafa Oeste, Mataguafa Attic and preliminary works
at the highly prospective Icaco project. The Company has now reverted to
operating one rig, and the site preparation and seismic costs are largely
met, this provides a foundation for future development and exploration
activities., Both production and net backs remain robust at current market
prices.
Tapir Extension and COR-39 Block
The Company is engaged in continuing discussions with authorities on the Tapir
block extension. Arrow considers that all requirements for the extension
have been met. Furthermore, the Company is in discussions with regulatory
bodies on the termination of COR-39 Block license obligations (where activity
has been suspended since November 2017). Discussions with authorities are
going well and Arrow will keep the market updated in future releases.
Upcoming Drilling
The Company has spud the M-HZ7 well, which is expected to be put on production
in mid-December 2025. Thereafter, the Company expects to drill another well at
its Mateguafa Attic field and initiate civil works in preparation to drill its
first exploration well in the Icaco prospect in Q1 2026.
Marshall Abbott, CEO of Arrow Exploration Corp., commented:
"The third quarter of 2025 has been very busy for Arrow. We completed two
development wells in Carrizales Norte and drilled the Mateguafa Oeste
exploration well as well as setting up infrastructure for the discovery at
Mateguafa Attic and the upcoming exploration well at Icaco. The Mateguafa
Attic discovery could become a major production platform and have a material
impact on the Company, and the Icaco prospect is another near term catalyst
that we expect will be drilled in the first quarter of 2026."
"The Company continues to work with regulatory authorities on the extension of
the Tapir block. The Company considers it has met all of the requirements
for an extension and discussions with regulatory officials continue to
progress."
"Arrow has invested heavily into roads, pads and water infrastructure in both
Q2 and Q3 and the results can be seen with a significant decrease in the
Company's operating cost in Q3 when compared to Q2 2025. This investment
will continue to payback over the life of the Tapir pads."
"The focus for the remainder of 2025 will be to drill low risk wells at the
Mateguafa Attic pad in the Tapir block and to get all preliminary works in
place to drill our first exploratory well at the Icaco prospect."
FINANCIAL AND OPERATING HIGHLIGHTS
Three months ended September 30, 2025 Nine months Three months ended September 30, 2024
ended September 30, 2025
(in United States dollars, except as otherwise noted)
Total natural gas and crude oil revenues, net of royalties 18,543,974 53,919,037 21,300,115
Funds flow from operations 9,374,301 23,114,380 9,233,972
Funds flow from operations per share -
Basic($) 0.02 0.07 0.03
Diluted ($) 0.02 0.07 0.03
Net income 3,089,684 4,818,714 6,668,493
Net income per share -
Basic ($) 0.01 0.02 0.02
Diluted ($) 0.01 0.02 0.02
Adjusted EBITDA ((1)) 10,843,377 28,644,904 15,961,900
Weighted average shares outstanding -
Basic ($) 285,864,348 285,864,348 285,864,348
Diluted ($) 289,719,564 292,991,907 288,921,950
Common shares end of period 285,864,348 285,864,348 285,864,348
Capital expenditures 9,287,571 35,437,959 6,945,779
Cash and cash equivalents 6,370,539 6,370,539 16,536,801
Current Assets 17,259,451 17,259,451 23,230,243
Current liabilities 17,085,588 17,085,588 13,608,118
Adjusted working capital((1)) 173,863 173,863 9,622,125
Long-term portion of restricted cash 152,617 152,617 176,094
Total assets 93,684,265 93,684,265 73,535,397
Operating
Natural gas and crude oil production, before royalties
Natural gas (Mcf/d) 1,306 1,579 461
Natural gas liquids (bbl/d) 6 8 5
Crude oil (bbl/d) 3,990 3,752 4,042
Total (boe/d) 4,214 4,023 4,124
Operating netbacks ($/boe)
Natural gas ($/Mcf) ($1.76) ($1.36) ($1.48)
Crude oil ($/bbl) $38.21 $37.08 $52.00
Total ($/boe) $35.72 $34.13 $50.76
Discussion of Operating Results
During Q3 2025, the Company's production has increased, compared to the
previous two quarters, due to wells drilled in the Alberta Llanos and Rio
Cravo Este fields coming on production. Production growth is expected to
continue as the Company executes on the 2025 budget. During the quarter,
the Company maintained good operating results and healthy EBITDA.
Average Production by Property
Average Production Boe/d Q3 2025 Q2 2025 Q1 2025 Q4 2024 Q3 2024 Q2 2024 Q1 2024
Oso Pardo 103 131 126 154 180 113 166
Ombu (Capella) - - - - - - -
Rio Cravo Este (Tapir) 1,065 996 1,118 1,178 1,078 1,283 1,644
Carrizales Norte (Tapir) 1,879 2,070 2,321 3,153 2,784 991 622
Alberta Llanos 943 296 205 26 - - -
Total Colombia 3,990 3,493 3,770 4,511 4,042 2,387 2,432
Fir, Alberta 85 100 105 88 82 77 78
Pepper, Alberta 139 170 210 139 - 82 220
KEHO, Alberta - 5 - - - - -
TOTAL (Boe/d) 4,214 3,768 4,085 4,738 4,124 2,546 2,730
The Company's average production for the three months ended September 30, 2025
was 4,214 boe/d which consisted of crude oil production in Colombia of 3,990
bbl/d, natural gas production of 1,306 Mcf/d, and minor amounts of natural gas
liquids. The Company's Q3 2025 production was marginally higher than its Q3
2024 production and 12% higher than Q2 2025 due to increase in production in
the Alberta Llanos field.
Discussion of Financial Results
During Q3 2025,the Company has experienced a reduction in realized crude oil
and gas prices compared with the same period in 2024, as summarized below:
( )
Three months ended September 30
2025 2024 Change
Benchmark Prices
AECO (C$/Mcf) $0.64 $0.70 146%
Brent ($/bbl) $69.80 $72.87 (4%)
West Texas Intermediate ($/bbl) $64.95 $75.15 (15%)
Realized Prices
Natural gas, net of transportation ($/Mcf) $0.50 $0.56 (72%)
Natural gas liquids ($/bbl) $45.69 $61.24 (19%)
Crude oil, net of transportation ($/bbl) $56.67 $65.35 (13%)
Corporate average, net of transport ($/boe)((1)) $53.90 $64.04 (6%)
( (1)Non-IFRS measure)
Operating Netbacks
The Company also continued to realize good oil operating netbacks, as
summarized below:
Three months ended September 30
2025 2024
Natural Gas ($/Mcf)
Revenue, net of transportation expense $0.50 $0.56
Royalties ($0.05) ($0.09)
Operating expenses ($2.22) ($1.95)
Natural Gas operating netback((1)) ($1.76) ($1.48)
Crude oil ($/bbl)
Revenue, net of transportation expense $56.67 $65.35
Royalties ($6.57) ($7.44)
Operating expenses ($11.88) ($5.91)
Crude Oil operating netback((1)) $38.21 $52.00
Corporate ($/boe)
Revenue, net of transportation expense $53.90 $64.04
Royalties ($6.24) ($7.28)
Operating expenses ($11.94) ($6.00)
Corporate Operating netback((1)) $35.72 $50.76
( (1))Non-IFRS measure
The operating netbacks of the Company have been affected in 2025 due to
increased water production from its Colombian assets and decreased crude oil
and natural gas prices. During Q3 2025, the Company incurred $9 million of
capital expenditure, primarily in connection with the drilling of additional
development wells in the Tapir block. This tempo is expected to continue
during the remainder of 2025, funded by cash on hand and cashflow.
For further Information, contact:
Arrow Exploration
Marshall Abbott, CEO +1 403 651 5995
Joe McFarlane, CFO +1 403 818 1033
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
Hannam & Partners (Joint Broker)
Leif Powis +44 20 7907 8500
Samuel Merlin
Camarco (Financial PR)
Owen Roberts +44 (0)20 3781 8331
Rebecca Waterworth
About Arrow Exploration Corp.
Arrow Exploration Corp. (operating in Colombia via a branches of its 100%
owned subsidiary Arrow Exploration Switzerland GmbH) is a publicly traded
company with a portfolio of premier Colombian oil assets that are
underexploited, 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. Pursuant to certain private
agreements entered between Arrow and its partner, Arrow is entitled to receive
50% of the production from the Tapir block and has the right to request
approval to Ecopetrol S.A. for the assignment of 50% of all rights, interests
and obligations under the Tapir Association Contract. Arrow is listed on the
AIM market of the London Stock Exchange and on TSX Venture Exchange under the
symbol "AXL".
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 global pandemics, 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 or bop/d: Barrels per day
$/Bbl: Dollars per barrel
Mcf/d: Thousand cubic feet of gas per day
Mmcf/d: Million cubic feet of gas per day
$/Mcf: Dollars per thousand cubic feet of gas
Mboe: Thousands of barrels of oil equivalent
Boe/d: Barrels of oil equivalent per day
$/Boe: Dollars per barrel of oil equivalent
MMbbls: Million of barrels
BOE's may be misleading particularly if used in isolation. A BOE conversion
ratio of 6 Mcf: 1 bblis 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").
Non‐IFRS Measures
The Company uses non-IFRS measures to evaluate its performance which are
measures not defined in IFRS. Working capital, funds flow from operations,
realized prices, operating netback, adjusted EBITDA, and net debt as presented
do not have any standardized meaning prescribed by IFRS and therefore may not
be comparable with the calculation of similar measures for other entities. The
Company considers these measures as key measures to demonstrate its ability to
generate the cash flow necessary to fund future growth through capital
investment, and to repay its debt, as the case may be. These measures should
not be considered as an alternative to, or more meaningful than net income
(loss) or cash provided by operating activities or net loss and comprehensive
loss as determined in accordance with IFRS as an indicator of the Company's
performance. The Company's determination of these measures may not be
comparable to that reported by other companies.
Arrow Exploration Corp.
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ended SEPTEMBER 30, 2025 AND 2024
IN UNITED STATES DOLLARS
(UNAUDITED)
Notice of No Auditor Review of the Interim Condensed Consolidated Financial
Statements
as at and for the three and nine months ended September 30, 2025
Under National Instrument 51-102, Part 4, subsection 4.3 (3)(a), if an auditor
has not performed a review of the interim condensed consolidated financial
statements, they must be accompanied by a notice indicating that an auditor
has not reviewed the financial statements.
The accompanying unaudited interim condensed consolidated financial statements
of the Company have been prepared by and are the responsibility of the
Company's management.
The Company's independent auditor has not performed a review of these
financial statements in accordance with standards established by the Chartered
Professional Accountants of Canada for a review of interim financial
statements by an entity's auditor.
Arrow Exploration Corp.
Interim Consolidated Statements of Financial Position
In United States Dollars
(Unaudited)
As at Notes September 30, 2025 December 31, 2024
ASSETS
Current assets
Cash $ 6,370,539 $ 18,837,784
Restricted cash and deposits 3 283,973 238,141
Trade and other receivables 4 3,719,990 3,830,215
Taxes receivable 5 6,565,898 2,656,926
Deposits and prepaid expenses 261,935 232,730
Inventory 57,116 177,400
17,259,451 25,973,196
Non-current assets
Restricted cash and deposits 3 152,617 167,545
Exploration and evaluation assets 6 6,526,028 142,995
Property and equipment 7 69,746,169 54,984,998
Total Assets $ 93,684,265 $ 81,268,734
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $ 15,789,606 $ 8,504,332
Lease obligation 8 57,185 44,639
Income taxes 595,239 4,294,109
Stock based compensation liability 10 643,558 1,483,947
17,085,588 14,327,027
Non-current liabilities
Lease obligations 8 137,132 174,767
Other liabilities 546,349 610,059
Deferred income taxes 10,511,892 6,832,229
Decommissioning liability 9 7,519,075 6,307,659
Total liabilities 35,800,036 28,251,741
Shareholders' equity
Share capital 10 73,829,795 73,829,795
Contributed surplus 856,093 856,093
Deficit (15,952,180) (20,770,894)
Accumulated other comprehensive loss (849,479) (898,001)
Total shareholders' equity 57,884,229 53,016,993
Total liabilities and shareholders' equity $ 93,684,265 $ 81,268,734
Commitments and contingencies (Note 11)
The accompanying notes are an integral part of these interim consolidated
financial statements.
On behalf of the Board:
signed "Gage Jull"
Director
signed "Grant Carnie" Director
Gage
Jull
Grant Carnie
Arrow Exploration Corp.
Interim Condensed Consolidated Statements of Operations and Comprehensive
Income
In United States Dollars
(Unaudited)
For the three months ended September 30 For the nine months ended September 30
Notes 2025 2024 2025 2024
Revenue
Oil and natural gas $ 20,971,892 $ 24,031,829 $ 61,057,319 $ 57,592,614
Royalties (2,427,918) (2,731,714) (7,138,282) (6,741,212)
18,543,974 21,300,115 53,919,037 50,851,402
Expenses
Operating 4,645,076 2,252,602 16,662,522 6,797,194
Administrative 2,834,708 2,862,620 9,488,066 9,258,119
Share based payments 10 451,048 144,050 207,418 555,173
Financing costs:
Accretion 9 78,139 46,144 219,185 124,883
Interest 8 6,974 7,333 21,509 24,604
Other 90,489 51,202 93,685 192,382
Foreign exchange (gain) loss 222,258 277,204 (876,455) 149,817
Depletion and depreciation 7 5,703,343 4,681,591 15,404,004 11,475,258
Impairment loss 7 - - - 1,542,000
Other expense (income) (1,446) - - -
14,030,589 10,322,745 41,219,934 30,119,431
Income before taxes 4,513,385 10,977,370 12,699,103 20,731,971
Income taxes
Current 1,305,646 5,927,455 4,200,727 11,146,403
Deferred 118,055 (1,618,578) 3,679,662 (1,507,477)
1,423,701 4,308,877 7,880,389 9,638,926
Net income for the period 3,089,684 6,668,493 4,818,714 11,093,045
Other comprehensive gain (loss)
Foreign currency translation 61,242 95,203 48,522 (130,721)
Total other comprehensive gain (loss) 61,242 95,203 48,522 (130,721)
Total comprehensive income for the period
$ 3,150,926 $ 6,763,696 $ 4,867,236 $ 10,962,324
Net income per share
- basic $ 0.01 $ 0.02 $ 0.02 $ 0.04
- Diluted $ 0.01 $ 0.02 $ 0.02 $ 0.03
Weighted average shares outstanding
- Basic 285,864,348 285,864,348 285,864,348 285,864,348
- Diluted 289,719,564 292,536,147 292,991,907 291,542,735
The accompanying notes are an integral part of these interim consolidated
financial statements.
Arrow Exploration Corp.
Interim Condensed Statements of Changes in Shareholders' Equity
In United States Dollars
(Unaudited)
Contributed Surplus Accumulated other comprehensive loss
Share Capital Deficit Total Equity
Balance January 1, 2025 $ 73,829,795 $ 856,093 $ (898,001) $ (20,770,894) $ 53,016,993
Net income for the period - - - 4,818,714 4,818,714
Other comprehensive income - - 48,522 - 48,522
Total comprehensive income - - 48,522 4,818,714 4,867,263
Balance September 30, 2025 $ 73,829,795 856,093 (849,479) (15,952,180) 57,884,229
Contributed Surplus Accumulated other comprehensive loss
Share Capital Deficit Total Equity
Balance January 1, 2024 $ 73,829,795 $ 2,161,945 $ (536,322) $ (33,945,895) $ 41,509,523
Net income for the period - - - 11,093,045 11,093,045
Other comprehensive loss - - (130,721) - (130,721)
Total comprehensive loss - - (130,721) 11,093,045 10,962,324
Share-based compensation - 555,173 - - 555,173
Balance September 30, 2024 $ 73,829,795 $ 2,717,118 $ (667,043) $ (22,852,850) $ 53,027,020
The accompanying notes are an integral part of these interim consolidated
financial statements.
Arrow Exploration Corp.
Interim Condensed Consolidated Statements of Cash Flows
In United States Dollars
(Unaudited)
For the nine months ended September 30, Notes 2025 2024
Cash flows provided by operating activities:
Net income $ 4,818,714 $ 11,093,045
Items not involving cash:
Deferred taxes 3,679,662 (1,507,477)
Share-based compensation expense 10 207,418 555,173
Depletion and depreciation 7 15,404,004 11,475,258
Interest on leases 8 21,509 24,604
Accretion 9 219,185 124,883
Unrealized foreign exchange (gain)/loss (57,759) (44,473)
Impairment loss - 1,542,000
Changes in non‑cash working capital balances:
Restricted cash and deposits (30,904) 426,591
Trade and other receivables 110,225 (374,777)
Taxes receivable (3,908,971) 2,409,113
Deposits and prepaid expenses (29,205) (35,274)
Inventory 120,284 441,715
Income tax payable (3,698,869) 2,633,943
Accounts payable and accrued liabilities 9,385,252 610,696
Stock based payments 10 (1,093,715) -
Settlement of decommissioning obligations and other liabilities (84,638) (162,662)
9
Cash provided by operating activities 25,062,192 29,212,358
Cash flows used in investing activities:
Additions to exploration and evaluation assets 6 (6,383,033) (1,442,094)
Additions to property and equipment 7 (29,054,924) (20,750,421)
Changes in non-cash working capital (2,099,977) (2,529,254)
Cash flows used in investing activities (37,537,934) (24,721,769)
Cash flows used in financing activities:
Lease payments 8 (53,814) (49,411)
Cash flows used in financing activities (53,814) (49,411)
Effect of changes in the exchange rate on cash 62,311 (39,753)
Increase (decrease) in cash (12,467,245) 4,401,425
Cash, beginning of period 18,837,784 12,135,376
Cash, end of period 6,370,539 16,536,801
Supplemental information
Interest paid $ - $ -
Taxes paid $ 3,905,567 $ 1,430,337
The accompanying notes are an integral part of these interim consolidated
financial statements.
1. Corporate Information
Arrow Exploration Corp. ("Arrow" or "the Company") is a public junior oil and
gas company engaged in the acquisition, exploration and development of oil and
gas properties in Colombia and in Western Canada. The Company's shares trade
on the TSX Venture Exchange and the AIM Market of the London Stock Exchange
plc under the symbol AXL. The head office of Arrow is located at 203, 2303 -
4th Street SW, Calgary, Alberta, Canada, T2S 2S7 and the registered office is
located at 600, 815 8th Avenue SW, Calgary, Alberta, Canada, T2P 3P2.
2. Basis of Presentation
Statement of compliance
These interim condensed consolidated financial statements (the "Financial
Statements") have been prepared in accordance with International Accounting
Standard ("IAS") 34 Interim Financial Reporting. These Financial Statements
were authorized for issue by the board of directors of the Company on November
26, 2025. They do not contain all disclosures required by International
Financial Reporting Standards ("IFRS") for annual financial statements and,
accordingly, should be read in conjunction with the audited consolidated
financial statements as at December 31, 2024.
These Financial Statements have been prepared on the historical cost basis,
except for financial assets and liabilities recorded in accordance with IFRS
9. The Financial Statements have been prepared using the same accounting
policies and methods as the consolidated financial statements for the year
ended December 31, 2024. In preparing these condensed consolidated financial
statements, the significant judgements made by management in applying the
group's accounting policies and the key sources of estimation uncertainty were
the same as those that applied to the consolidated financial statements for
the year ended December 31, 2024.
3. Restricted Cash and deposits
September 30, December 31, 2024
2025
Colombia (i) $ 303,674 $ 275,949
Canada 132,916 129,737
Sub-total 436,590 405,686
Long-term portion (152,617) (167,545)
Current portion of restricted cash and deposits $ 283,973 $ 238,141
(i) This balance is comprised of a deposit held as collateral to guarantee
abandonment expenditures related to its Colombian blocks.
4. Trade and other receivables
September 30, December 31, 2024
2025
Trade receivables, net of advances $ 105,049 $ 1,926,176
Other accounts receivable 3,614,940 1,904,039
$ 3,719,990 $ 3,830,215
As at September 30, 2025, other accounts receivable include $729,561 (December
31, 2024 - $699,880) receivable from on demand loans with executives and
directors.
5. Taxes receivable
September 30, December 31, 2024
2025
Value-added tax (VAT) credits recoverable $ 4,211,243 $ 1,738,536
Income tax withholdings and advances, net 2,354,655 918,390
$ 6,565,898 $ 2,656,926
The VAT recoverable balance pertains to non-compensated value-added tax
credits originated in Colombia as operational and capital expenditures are
incurred. The Company is entitled to compensate or claim for the reimbursement
of these VAT credits.
6. Exploration and Evaluation
September 30, December 31,
2025 2024
Balance, beginning of the period $ 142,995 $ -
Additions 6,383,033 3,818,279
Reclassification to Property and Equipment (Note 8) - (3,675,284)
Balance, end of the period $ 6,526,028 $ 142,995
As at September 30, 2025, no indicators of impairment were identified in the
Company's exploration and evaluation assets. During 2024, the Company incurred
in geological and geophysical costs in its Carrizales Norte prospect located,
and determined the technical feasibility and commercial viability of these
assets, transferring $3,675,284 to its property and equipment. An impairment
test on these assets was prepared and no losses were identified as a result of
such tests.
7. Property and Equipment
Oil and Gas Properties Right of Use and Other Assets
Cost Total
Balance, December 31, 2023 $ 75,292,865 $ 544,217 $ 75,837,082
Additions 27,295,956 6,908 27,302,864
Adjustment to ROU assets - (53,543) (53,543)
Transfers from exploration of evaluation assets 3,675,284 - 3,675,284
Decommissioning adjustment 2,702,058 - 2,702,058
Balance, December 31, 2024 $108,966,163 $ 497,582 $ 109,463,745
Additions 29,054,924 - 29,054,924
Decommissioning adjustment 1,005,110 - 1,005,110
Balance, September 30, 2025 $139,026,197 $ 497,582 $ 139,523,779
Accumulated depletion and depreciation and impairment Oil and Gas Properties Right of Use and Other Assets
Total
Balance, December 31, 2023 $ 37,074,320 $ 227,142 $ 37,301,462
Depletion and depreciation 17,448,880 86,935 17,535,815
Impairment reversal (662,753) - (662,753)
Balance, December 31, 2024 $ 53,860,447 $ 314,077 $ 54,174,524
Depletion and depreciation 15,354,688 49,316 15,404,004
Balance, September 30, 2025 $ 69,215,135 $ 363,393 $ 69,578,528
Foreign exchange
Balance December 31, 2023 $ (161,237) $ (3,022) $ (164,259)
Effects of movements in foreign
exchange rates (122,332) (17,632) (139,964)
Balance, December 31, 2024 $ (283,569) $ (20,654) $ (304,223)
Effects of movements in foreign
exchange rates 100,288 4,853 105,141
Balance, September 30, 2025 $ (183,281) $ (15,801) $ (199,082)
Net Book Value
Balance December 31, 2024 $ 54,822,147 $ 162,851 $ 54,984,998
Balance September 30, 2025 $ 69,627,781 $ 118,388 $ 69,746,169
Canada
As at September 30, 2025 and 2024, no indicators of impairment were identified
in the Company's property and equipment. As at December 31, 2024, the Company
determined there were indicators of impairment reversal in its Canada CGU.
Management determined the recoverable amount of its Canada CGU using the fair
value less costs of disposal approach. As at June 30, 2024, the Company
determined there were indicators of impairment in its Canada CGU, mainly due
to decreases in gas prices, and prepared estimates of its fair value less
costs of disposal of its Canada CGU. It was determined that carrying value of
its Canada CGU exceeded its recoverable amount and, therefore, an impairment
loss of $1,542,000 was included in the interim consolidated statements of
operations and comprehensive income for the nine months ended September 30,
2024.
8. Lease Obligations
A reconciliation of the discounted lease obligation is set forth below:
2025 2024
Obligation, beginning of the period 219,406 320,593
Changes to leases - (53,943)
Lease payments (53,814) (57,807)
Interest 21,509 31,846
Effects of movements in foreign exchange rates 7,216 (21,683)
Obligation, end of the period 194,317 219,406
Current portion (57,185) (44,639)
Long-term portion 137,132 174,767
During 2024, the Company recognized the impact of a change in payment terms of
its office lease and recognized a decrease in lease liabilities and ROU assets
for $ 53,943. As at September 30, 2025, the Company has the following future
lease obligations:
Less than one year 74,197
2 - 5 years 222,255
Total lease payments 296,452
Amounts representing interest over the term (102,135)
Present value of the net obligation 194,317
9. Decommissioning Liability
The following table presents the reconciliation of the beginning and ending
aggregate carrying amount of the obligation associated with the
decommissioning of oil and gas properties:
September 30, December 31,
2025 2024
Obligation, beginning of the period 6,307,659 3,973,075
Additions 1,232,560 1,467,282
Change in estimated cash flows (227,451) 843,978
Payments or settlements (27,857) (110,263)
Accretion expense 219,185 178,296
Effects of movements in foreign exchange rates 14,979 (44,709)
7,519,075 6,307,659
Obligation, end of the period
The obligation was calculated using a risk-free discount rate range of 2.50%
to 3.75% in Canada (2024: 1.25% to 4.50%) and between 4.43% and 4.60% in
Colombia (2024: 4.30% and 4.60%) with an inflation rate of 2.0% and 1.90%,
respectively (2024: 2.0% and 1.9%). The majority of costs are expected to
occur between 2026 and 2038. The undiscounted amount of cash flows, required
over the estimated reserve life of the underlying assets, to settle the
obligation, adjusted for inflation, is estimated at $9,166,067 (2024:
$8,155,704).
10. Share Capital
(a) Authorized: Unlimited number of common shares without par value
(b) Issued:
September 30, 2025 December 31, 2024
Common shares Shares Amounts Shares Amounts
Balance at beginning and end of the period 285,864,348 73,829,795 285,864,348 73,829,795
(c) Stock options:
The Company has a stock option plan that provides for the issuance to its
directors, officers and employees options to purchase non-transferable common
shares not exceeding 10% of the outstanding common shares. The exercise price
is based on the closing price of the Company's common shares on the day prior
to the day of the grant. A summary of the Company stock option plan as at
September 30, 2025 and December 31, 2024 and changes during the periods ended
on those dates is presented below:
September 30, 2025 December 31, 2024
Stock Options Number of options Weighted average Number of options Weighted average
exercise price exercise price
(CAD $) (CAD $)
Beginning of period 24,795,002 $0.32 20,531,668 $0.18
Granted - - 14,176,108 $0.27
Expired/Forfeited (822,222) $0.41 (2,433,333) $0.12
Expired after vesting (100,000) $0.38 - -
Exercised (6,676,112) $0.19 (7,479,441) $0.11
End of period 17,196,668 $0.36 24,795,002 $0.32
Exercisable, end of period 7,066,115 $0.29 8,442,778 $0.42
Date of Grant Number Outstanding Exercise Price Weighted Date of Number
(CAD $) Average Remaining Contractual Life Expiry Exercisable
September 30, 2025
October 22, 2018 250,000 $1.15 3.06 Oct. 22, 2028 250,000
May 3, 2019 100,000 $0.31 3.57 May 3, 2029 100,000
March 20, 2020 900,000 $0.05 4.47 Mar. 20, 2030 900,000
April 13, 2020 900,000 $0.05 4.53 April 13, 2030 900,000
September 9, 2022 133,334 $0.28 0..19 Dec. 9, 2023, 2024 and 2025 133,334
September 7, 2022 416,668 $0.26 0.43 Mar. 7, 2024, 2025 and 2026 416,668
December 21, 2022 1,681,667 $0.28 0.72 Sept. 21, 2024, 2025 and 2026 -
January 23, 2023 50,000 $0.32 0.81 July 23, 2024, 2025 and 2026 -
September 21, 2023 666,667 $0.33 0.47 Mar. 21, 2025, 2026 and 2027 333,333
April 29, 2024 8,243,888 $0.28 0.08 Oct.29 2025, 2026 and 2027 2,747,962
September 11, 2024 3,854,444 $0.48 0.44 Mar.11 2026, 2027 and 2028 1,284,818
Total 17,196,668 $0.36 1.50 years 7,066,115
For the nine months ended September 30, 2025, the Company has recognized
shared-based compensation expense of $207,418 (2024: $101,278) corresponding
to the progressive vesting and fair market value of options, increasing the
stock based compensation liability in the same amount (2024: increasing
contributed surplus), and paid $1,093,715 from cashless exercising of vested
options (2024: nil).
11. Commitments and Contingencies
Exploration and Production Contracts
The Company has entered into a number of exploration contracts in Colombia
which require the Company to fulfill work program commitments and issue
financial guarantees related thereto (see Letters of Credit section below).
The Company's exploration and production contractual commitments as at
September 30, 2025 are:
Block Less than 1 year 1-3 years Thereafter Total
COR-39 - 12,000,000 - 12,000,000
Total - - 12,000,000
12,000,000
Contingencies
From time to time, the Company may be involved in litigation or has claims
sought against it in the normal course of business operations. Management of
the Company is not currently aware of any claims or actions that would
materially affect the Company's reported financial position or results from
operations. Under the terms of certain agreements and the Company's by-laws
the Company indemnifies individuals who have acted at the Company's request to
be a director and/or officer of the Company, to the extent permitted by law,
against any and all damages, liabilities, costs, charges or expenses suffered
by or incurred by those individuals.
Letters of Credit
At September 30, 2025, the Company had obligations under Letters of Credit
("LC's") outstanding totaling $3.6 million to guarantee work commitments on
exploration blocks and other contractual commitments. In the event the Company
fails to secure the renewal of the letters of credit underlying the ANH
guarantees, the ANH could decide to cancel the underlying exploration and
production contract, as applicable.
Current Outstanding Letters of Credit
Contract Beneficiary Issuer Type Amount Renewal Date
(US $)
SANTA ISABEL ANH AESC Abandonment 685,297 April 14, 2026
ANH AESC Financial Capacity 1,672,162 December 30, 2025
COR - 39 ANH AESC Compliance 100,000 December 30, 2025
OMBU ANH AESC Financial Capacity 436,300 April 14, 2026
ANH AESC Abandonment 708,119 August 28, 2026
Total 3,601,878
12. Risk Management
The Company holds various forms of financial instruments. The nature of these
instruments and the Company's operations expose the Company to commodity
price, credit and foreign exchange risks. The Company manages its exposure to
these risks by operating in a manner that minimizes its exposure to the extent
practical.
(a) Commodity price risk
The Company's principal operation is the production and sale of crude oil
and natural gas. Fluctuations in prices of these commodities directly impact
the Company's financial performance. Commodity price risk is the risk that the
fair value or future cash flows of a financial instrument will fluctuate as a
result of changes in commodity prices. Lower commodity prices can also
impact the Company's ability to raise capital. Commodity prices for crude oil
are impacted by world economic events that dictate the levels of supply and
demand. There were no derivative contracts during 2025.
(b) Credit Risk
Credit risk reflects the risk of financial loss to the Company if a customer
or counterparty to a contract fails to fulfill their contractual obligations.
It arises mostly from the Company's cash balances and accounts receivable. The
Company's cash balances are held with six counterparties, large reputable
financial institutions, and management has therefore concluded that credit
associated is low. The majority of the Company's account receivable balances
relate to petroleum and natural gas sales. The Company's policy is to enter
into agreements with customers that are well established entities in the oil
and gas industry such that the level of risk is mitigated. In Colombia, a
significant portion of the sales is with producing companies and commodities
trader under existing sale/offtake agreements with prepayment provisions and
priced using the Brent benchmark. The Company's trade account receivables
primarily relate to sales of crude oil and natural gas, which are normally
collected within 25 days (in Canada) and up to 15 days (in Colombia) after the
month of production. Other accounts receivable mainly relate to balances
owed by the Company's partner in one of its blocks, and are mainly recoverable
through joint billings. The Company has historically not experienced any
significant collection issues with its customers and partners.
(c) Market Risk
Market risk is comprised of two components: foreign currency exchange risk and
interest rate risk.
i) Foreign Currency Exchange Risk
The Company operates on an international basis and therefore foreign exchange
risk exposures arise from transactions denominated in currencies other than
the United States dollar. The Company is exposed to foreign currency
fluctuations as it holds cash and incurs expenditures in exploration and
evaluation and administrative costs in foreign currencies.
The Company incurs expenditures in Canadian dollars, United States dollars,
British Pounds and the Colombian peso and is exposed to fluctuations in
exchange rates in these currencies. There are no exchange rate contracts in
place.
ii) Interest Rate Risk
Interest rate risk is the risk that future cash flows will fluctuate as a
result of changes in market interest rates. The Company is not currently
exposed to interest rate risk.
(d) Liquidity Risk
Liquidity risk includes the risk that, as a result of the Company's
operational liquidity requirements:
· The Company will not have sufficient funds to settle a
transaction on the due date;
· The Company will be forced to sell financial assets at a value
which is less than what they are worth; or
· The Company may be unable to settle or recover a financial asset.
The Company's approach to managing its liquidity risk is to ensure, within
reasonable means, sufficient liquidity to meet its liabilities when due, under
both normal and unusual conditions, without incurring unacceptable losses or
jeopardizing the Company's business objectives. The Company prepares annual
capital expenditure budgets which are monitored regularly and updated as
considered necessary. Petroleum and natural gas production is monitored
daily to provide current cash flow estimates and the Company utilizes
authorizations for expenditures on projects to manage capital expenditures.
Any funding shortfall may be met in a number of ways, including, but not
limited to, the issuance of new debt or equity instruments, further
expenditure reductions and/or the introduction of joint venture partners.
The Company has entered into a two-year crude prepayment agreement with an
integrated energy major to market its oil production in Colombia. The
agreement provides access to $20 million US in a revolving line of credit in
year one and $15 million in year two. The interest rate is SOFR + 4% for the
first $10 million and SOFR + 5% for amounts exceeding $10 million. As at
September 30, 2025, no funds have been withdrawn from this agreement.
(e) Capital Management
The Company's objective is to maintain a capital base sufficient to provide
flexibility in the future development of the business and maintain investor,
creditor and market confidence. The Company manages its capital structure
and makes adjustments in response to changes in economic conditions and the
risk characteristics of the underlying assets. The Company considers its
capital structure to include share capital, bank debt (when available),
promissory notes and working capital, defined as current assets less current
liabilities. From time to time the Company may issue common shares or other
securities, sell assets or adjust its capital spending to manage current and
projected debt levels. The Company adjusts its capital structure based on its
net debt level. Net debt is a non-GAAP measure and is defined as the
principal amount of its outstanding debt, less working capital items. The
Company prepares annual budgets, which are updated as necessary including
current and forecast crude oil prices, changes in capital structure, execution
of the Company's business plan and general industry conditions. The annual
budget is approved by the Board of Directors. The Company's capital includes
the following:
September 30, 2025 December 31, 2024
Working capital $ 173,863 $ 11,646,169
13. Segmented Information
The Company has two reportable operating segments: Colombia and Canada. The
Canada segment is also considered the corporate segment. The following tables
show information regarding the Company's segments for the nine and three
months ended and as at September 30:
Three months ended September 30, 2025 Colombia Canada Total
Revenue:
Oil Sales $ 20,884,803 $ - $ 20,884,803
Natural gas and liquid sales - 87,089 87,089
Royalties (2,422,203) (5,715) (2,427,918)
Expenses (11,237,619) (2,792,970) (14,030,589)
Income taxes (1,423,701) - (1,423,701)
Net income (loss) $ 5,801,280 $ (2,711,596) $ 3,089,684
Nine months ended September 30, 2025 Colombia Canada Total
Revenue:
Oil Sales $ 60,453,671 $ - $ 60,453,671
Natural gas and liquid sales - 603,648 603,648
Royalties (7,108,060) (30,222) (7,138,282)
Expenses (32,272,527) (8,947,407) (41,219,934)
Income taxes (7,880,389) - (7,880,389)
Net income (loss) $ 13,192,695 $ (8,373,981) $ 4,818,714
Capital expenditures for the period $ 33,655,733 $ 1,782,226 $ 35,437,959
Total Assets as at September 30, 2025 $ 87,484,799 $ 6,199,466 $ 93,684,265
Total liabilities as at September 30, 2025 $ 32,282,753 $ 3,517,283 $ 35,800,036
Three months ended September 30, 2024 Colombia Canada Total
Revenue:
Oil Sales $ 23,981,362 $ - $ 23,981,362
Natural gas and liquid sales 50,467 50,467
Royalties (2,727,862) (3,852) (2,731,714)
Expenses (7,601,535) (2,721,210) (10,322,745)
Impairment loss - - -
Income taxes (4,308,877) - (4,308,877)
Net income (loss) $ 9,343,088 $ (2,674,595) $ 6,668,493
Nine months ended September 30, 2024 Colombia Canada Total
Revenue:
Oil Sales $ 57,110,675 $ - $ 57,110,675
Natural gas and liquid sales - 481,939 481,939
Royalties (6,740,821) (391) (6,741,212)
Expenses (19,447,170) (9,130,261) (28,577,431)
Impairment loss - (1,542,000) (1,542,000)
Income taxes (9,638,926) - (9,638,926)
Net income (loss) $ 21,283,758 $ (10,190,713) $ 11,093,045
Capital expenditures for the period $ 21,310,910 $ 961,605 $ 22,192,515
Total Assets as at September 30, 2024 $ 67,267,851 $ 6,267,546 $ 73,535,397
Total liabilities as at September 30, 2024 $ 17,827,194 $ 2,681,183 $ 20,508,377
Arrow Exploration Corp.
MANAGEMENT's DISCUSSION AND ANALYSIS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025
MANAGEMENT'S DISCUSSION AND ANALYSIS
This Management's Discussion and Analysis ("MD&A") as provided by the
management of Arrow Exploration Corp. ("Arrow" or the "Company"), is dated as
of November 26, 2025 and should be read in conjunction with Arrow's interim
condensed (unaudited) consolidated financial statements and related notes as
at and for the three and nine months ended September 30, 2025 and 2024.
Additional information relating to Arrow, including its annual consolidated
financial statements and related notes as at and for years ended December 31,
2024 and 2023 (the "Annual Financial Statements"), is available under Arrow's
profile on www.sedar.com (http://www.sedar.com) .
Advisories
Basis of Presentation
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS"), and all amounts herein
are expressed in United States dollars, unless otherwise noted, and all
tabular amounts are expressed in United States dollars, unless otherwise
noted. Additional information for the Company may be found on SEDAR at
www.sedar.com.
Advisory Regarding Forward‐Looking Statements
This MD&A 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 "believe", "continue", "could", "expect", "likely", "may",
"outlook", "plan", "potential", "will", "would" and similar expressions. In
particular, but without limiting the foregoing, this MD&A contains
forward-looking statements pertaining to the following: global pandemics and
their impact; tax liability; capital management strategy; capital structure;
credit facilities and other debt; letters of credit; Arrow's costless collar
structure; cost reduction initiatives; potential drilling on the Tapir block;
capital requirements; expenditures associated with asset retirement
obligations; future drilling activity and the development of the Rio Cravo
Este, Carrizales Norte and Alberta Llanos structures on the Tapir Block.
Statements relating to "reserves" and "resources" are deemed to be
forward-looking information, as they involve the implied assessment, based on
certain estimates and assumptions, that the reserves and resources described
exist in the quantities predicted or estimated and can be profitably produced
in the future.
The forward-looking statements contained in this MD&A reflect several
material factors and expectations and assumptions of Arrow including, without
limitation: current and anticipated commodity prices and royalty regimes; the
impact of the global pandemics; the financial impact of Arrow's costless
collar structure; availability of skilled labour; timing and amount of capital
expenditures; future exchange rates; commodity prices; the impact of
increasing competition; general economic conditions; availability of drilling
and related equipment; receipt of partner, regulatory and community approvals;
royalty rates; changes in income tax laws or changes in tax laws and incentive
programs; future operating costs; effects of regulation by governmental
agencies; uninterrupted access to areas of Arrow's operations and
infrastructure; recoverability of reserves; future production rates; timing of
drilling and completion of wells; pipeline capacity; that Arrow will have
sufficient cash flow, debt or equity sources or other financial resources
required to fund its capital and operating expenditures and requirements as
needed; that Arrow's conduct and results of operations will be consistent with
its expectations; that Arrow will have the ability to develop its oil and gas
properties in the manner currently contemplated; current or, where applicable,
proposed industry conditions, laws and regulations will continue in effect or
as anticipated; that the estimates of Arrow's reserves and production volumes
and the assumptions related thereto (including commodity prices and
development costs) are accurate in all material respects; that Arrow will be
able to obtain contract extensions or fulfil the contractual obligations
required to retain its rights to explore, develop and exploit any of its
undeveloped properties; and other matters.
Arrow believes the material factors, 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 MD&A 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 including, without
limitation: the impact of general economic conditions; volatility in commodity
prices; industry conditions including changes in laws and regulations
including adoption of new environmental laws and regulations, and changes in
how they are interpreted and enforced; competition; lack of availability of
qualified personnel; the results of exploration and development drilling and
related activities; obtaining required approvals of regulatory authorities;
counterparty risk; risks associated with negotiating with foreign governments
as well as country risk associated with conducting international activities;
commodity price volatility; fluctuations in foreign exchange or interest
rates; environmental risks; changes in income tax laws or changes in tax laws
and incentive programs; changes to pipeline capacity; ability to secure a
credit facility; ability to access sufficient capital from internal and
external sources; risk that Arrow's evaluation of its existing portfolio of
development and exploration opportunities is not consistent with future
results; that production may not necessarily be indicative of long term
performance or of ultimate recovery; and certain other risks detailed from
time to time in Arrow's public disclosure documents including, without
limitation, those risks identified in Arrow's 2018 AIF, a copy of which is
available on Arrow's SEDAR profile at www.sedar.com. Readers are cautioned
that the foregoing list of factors is not exhaustive and are cautioned not to
place undue reliance on these forward-looking statements.
Non‐IFRS Measures
The Company uses non-IFRS measures to evaluate its performance which are
measures not defined in IFRS. Working capital, funds flow from operations,
realized prices, operating netback, adjusted EBITDA, and net debt as presented
do not have any standardized meaning prescribed by IFRS and therefore may not
be comparable with the calculation of similar measures for other entities. The
Company considers these measures as key measures to demonstrate its ability to
generate the cash flow necessary to fund future growth through capital
investment, and to repay its debt, as the case may be. These measures should
not be considered as an alternative to, or more meaningful than net income or
cash provided by (used in) operating activities or net income and
comprehensive income as determined in accordance with IFRS as an indicator of
the Company's performance. The Company's determination of these measures may
not be comparable to that reported by other companies.
Adjusted working capital is calculated as current assets minus current
liabilities, excluding non-cash liabilities; funds from operations is
calculated as cash flows provided by operating activities adjusted to exclude
changes in non-cash working capital balances; realized price is calculated by
dividing gross revenue by gross production, by product, in the applicable
period; operating netback is calculated as total natural gas and crude
revenues minus royalties, transportation costs and operating expenditures;
adjusted EBITDA is calculated as net income adjusted for interest, income
taxes, depreciation, depletion, amortization and other similar non-recurring
or non-cash charges; and net debt (net cash) is defined as the principal
amount of its outstanding debt, less working capital items excluding non-cash
liabilities.
The Company also presents funds from operations per share, whereby per share
amounts are calculated using weighted- average shares outstanding consistent
with the calculation of net income per share.
A reconciliation of the non-IFRS measures is included as follows:
Three months ended September 30, 2025 Nine months ended September 30, 2025 Three months ended September 30, 2024 Nine months ended September 30, 2024
(in United States dollars)
Net income 3,089,684 4,818,714 6,668,493 11,093,045
Add/(subtract):
Share based payments 451,048 207,418 144,050 555,173
Financing costs:
Accretion on decommissioning obligations 78,139 219,185 46,144 124,883
Interest 6,974 21,509 7,333 24,604
Other 90,489 93,686 51,202 192,382
Depreciation and depletion 5,703,343 15,404,004 4,681,591 11,475,258
Impairment loss - - - 1,542,000
Income taxes, current and deferred 1,423,701 7,880,389 4,308,877 9,638,926
Adjusted EBITDA ((1)) 10,843,377 28,644,904 15,907,690 34,646,271
Cash flows provided by operating activities 11,104,098 25,062,192 13,495,700 29,212,358
Minus - Changes in non‑cash working capital balances:
Trade and other receivables 944,233 (110,225) (36,540) 374,777
Restricted cash (2,232) 30,904 921 (426,591)
Taxes receivable 3,010,742 3,908,971 (2,342,660) (2,409,113)
Deposits and prepaid expenses 69,682 29,205 (79,698) 35,274
Inventory (137,246) (120,284) 4,070 (441,715)
Accounts payable and accrued liabilities (11,359,802) (9,385,252) (916,510) (610,696)
Income taxes 5,744,826 3,698,869 (891,311) (2,633,943)
Funds flow from operations ((1)) 9,374,301 23,114,380 9,233,972 23,100,351
( (1))Non-IFRS measures
The term barrel of oil equivalent ("boe") is used in this MD&A. Boe may
be misleading, particularly if used in isolation. A boe conversion ratio of
6 thousand cubic feet ("Mcf") of natural gas to one barrel of oil ("bbl") is
used in the MD&A. This conversion ratio of 6:1 is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead.
FINANCIAL AND OPERATING HIGHLIGHTS
Three months ended September 30, 2025 Nine months Three months ended September 30, 2024
ended September 30, 2025
(in United States dollars, except as otherwise noted)
Total natural gas and crude oil revenues, net of royalties 18,543,974 53,919,037 21,300,115
Funds flow from operations ((1)) 9,374,301 23,114,380 9,233,972
Funds flow from operations ((1)) per share -
Basic($) 0.02 0.07 0.03
Diluted ($) 0.02 0.07 0.03
Net income 3,089,684 4,818,714 6,668,493
Net income per share -
Basic ($) 0.01 0.02 0.02
Diluted ($) 0.01 0.02 0.02
Adjusted EBITDA ((1)) 10,843,377 28,644,904 15,961,900
Weighted average shares outstanding -
Basic ($) 285,864,348 285,864,348 285,864,348
Diluted ($) 289,719,564 292,991,907 288,921,950
Common shares end of period 285,864,348 285,864,348 285,864,348
Capital expenditures 9,287,571 35,437,959 6,945,779
Cash and cash equivalents 6,370,539 6,370,539 16,536,801
Current Assets 17,259,451 17,259,451 23,230,243
Current liabilities 17,085,588 17,085,588 13,608,118
Adjusted working capital((1)) 173,863 173,863 9,622,125
Long-term portion of restricted cash((2)) 152,617 152,617 176,094
Total assets 93,684,265 93,684,265 73,535,397
Operating
Natural gas and crude oil production, before royalties
Natural gas (Mcf/d) 1,306 1,579 461
Natural gas liquids (bbl/d) 6 8 5
Crude oil (bbl/d) 3,990 3,752 4,042
Total (boe/d) 4,214 4,023 4,124
Operating netbacks ($/boe) ((1))
Natural gas ($/Mcf) ($1.76) ($1.36) ($1.48)
Crude oil ($/bbl) $38.21 $37.08 $52.00
Total ($/boe) $35.72 $34.13 $50.76
( (1))Non-IFRS measures - see "Non-IFRS Measures" section within this
MD&A
((2)Long term restricted cash not included in working capital)
The Company
Arrow is a junior oil and gas company engaged in the acquisition, exploration
and development of oil and gas properties in Colombia and Western Canada. The
Company's shares trade on the TSX Venture Exchange and the London AIM exchange
under the symbol AXL.
The Company and Arrow Exploration Ltd. entered into an arrangement agreement
dated September 1, 2018, as amended, whereby the parties completed a business
combination pursuant to a plan of arrangement under the Business Corporations
Act (Alberta) ("ABCA") on September 28, 2018. Arrow Exploration Ltd. and Front
Range's then wholly-owned subsidiary, 2118295 Alberta Ltd., were amalgamated
to form Arrow Holdings Ltd., a wholly-owned subsidiary of the Company (the
"Arrangement"). On May 31, 2018, Arrow Exploration Ltd. entered in a share
purchase agreement, as amended, with Canacol Energy Ltd. ("Canacol"), to
acquire Canacol's Colombian oil properties held by its wholly-owned subsidiary
Carrao Energy S.A. ("Carrao"). On September 27, 2018, Arrow Exploration Ltd.
closed the agreement with Canacol, and during 2024 Carrao changed its name to
Arrow Exploration Switzerland GmbH.
On May 31, 2018, Arrow Exploration Ltd., entered into a purchase and sale
agreement to acquire a 50% beneficial interest in a contract entered into with
Ecopetrol S.A. pertaining to the exploration and production of hydrocarbons in
the Tapir block from Samaria Exploration & Production S.A. ("Samaria"). On
September 27, 2018, Arrow Exploration Ltd. closed the agreement with Samaria.
As at September 30, 2025 the Company held an interest in four oil blocks in
Colombia and oil and natural gas leases in five areas in Canada as follows:
Gross Acres Working Interest Net Acres
COLOMBIA
Tapir Operated(1) 65,125 50% 32,563
Oso Pardo Operated 672 100% 672
Ombu Non-operated 56,482 10% 5,648
COR-39 Operated 95,111 100% 95,111
Total Colombia 217,390 133,994
CANADA
Fir Non operated 7,680 32% 2,458
Penhold Non-operated 480 13% 61
Pepper Operated 17,280 100% 17,280
Wapiti Non-operated 1,280 13% 160
Ante Creek Operated 2,560 100% 2,560
KEHO Operated 7,358 100% 7,358
Total Canada 36,638 29,876
TOTAL 254,028 163,870
(1)The Company's interest in the Tapir block is held through a private
contract with Petrolco, who holds a 50% participating interest in, and is the
named operator of, the Tapir contract with Ecopetrol. The formal assignment to
the Company is subject to Ecopetrol's approval. The Company is the de facto
operator pursuant to certain agreements with Petrolco (details of which are
set out in Paragraph 16.13 of the Company's AIM Admission Document dated
October 20, 2021).
The Company's primary producing assets are located in Colombia in the Tapir,
Oso Pardo and Ombu blocks, with natural gas production in Canada at Fir and
Pepper, Alberta.
Llanos Basin
Within the Llanos Basin, the Company is engaged in the exploration,
development and production of oil within the Tapir block. In the Llanos Basin
most oil accumulations are associated with three-way dip closure against
NNE-SSW trending normal faults and can have pay within multiple reservoirs.
The Tapir block contain large areas not yet covered by 3D seismic, and in
Management's opinion offer substantial exploration upside.
Middle Magdalena Valley ("MMV") Basin
Oso Pardo Field
The Oso Pardo Field is located in the Santa Isabel Block in the MMV Basin.
It is a 100% owned property operated by the Company. The Oso Pardo field is
located within a Production Licence covering 672 acres. Three wells have been
drilled to date within the licensed area.
Ombu E&P Contract - Capella Conventional Heavy Oil Discovery
The Caguan Basin covers an area of approximately 60,000 km(2) and lies between
the Putumayo and Llanos Basins. The primary reservoir target is the Upper
Eocene aged Mirador formation. The Capella structure is a large, elongated
northeast-southwest fault-related anticline, with approximately 17,500 acres
in closure at the Mirador level. The field is located approximately 250 km
away from the nearest offloading station at Neiva, where production from
Capella is trucked.
The Capella No. 1 discovery well was drilled in July 2008 and was followed by
a series of development wells. The Company earned a 10% working interest in
the Ombu E&P Contract by paying 100% of all activities associated with the
drilling, completion, and testing of the Capella No. 1 well. The Capella field
is currently suspended and temporarily shut in.
Fir, Alberta
The Company has an average non-operated 32% WI in 12 gross (3.84 net) sections
of oil and natural gas rights and 17 gross (4.5 net) producing natural gas
wells at Fir. The wells produce raw natural gas into the Cecilia natural gas
plant where it is processed.
Pepper, Alberta
The Company holds a 100% operated WI in 37 sections of Montney P&NG rights
on its Pepper asset in West Central Alberta. The 6-26-53-23W5M Montney gas
well (West Pepper) is tied into the Galloway gas plant for processing. The
3-21-52-22W5M Montney gas well (East Pepper) is currently tied into the
Sundance gas plant for processing. The majority of lands have tenure extending
into 2026.
Three months ended September 30, 2025 Financial and Operational Highlights
· Arrow recorded $18,543,974 in revenues, net of royalties, on
crude oil sales of 368,518 bbls, 583 bbls of natural gas liquids ("NGL's") and
120,132 Mcf of natural gas sales;
· Funds flow from operations of $9,374,301;
· Net income of $3,089,684 and adjusted EBITDA was $10,843,377;
Results of Operations
During Q3 2025, the Company's production has increased, compared to the
previous two quarters, due to wells drilled in the Alberta Llanos and Rio
Cravo Este fields coming on production. Production growth is expected since
the Company has developed water handling capability and executes on the 2025
budget. Nevertheless, the Company has maintained good operating results
and healthy EBITDA.
Average Production by Property
Average Production Boe/d Q3 2025 Q2 2025 Q1 2025 Q4 2024 Q3 2024 Q2 2024 Q1 2024
Oso Pardo 103 131 126 154 180 113 166
Ombu (Capella) - - - - - - -
Rio Cravo Este (Tapir) 1,065 996 1,118 1,178 1,078 1,283 1,644
Carrizales Norte (Tapir) 1,879 2,070 2,321 3,153 2,784 991 622
Alberta Llanos 943 296 205 26 - - -
Total Colombia 3,990 3,493 3,770 4,511 4,042 2,387 2,432
Fir, Alberta 85 100 105 88 82 77 78
Pepper, Alberta 139 170 210 139 - 82 220
KEHO, Alberta - 5 - - - - -
TOTAL (Boe/d) 4,214 3,768 4,085 4,738 4,124 2,546 2,730
The Company's average production for the three months ended September 30, 2025
was 4,214 boe/d which consisted of crude oil production in Colombia of 3,990
bbl/d, natural gas production of 1,306 Mcf/d, and minor amounts of natural gas
liquids. The Company's Q3 2025 production was marginally higher than its Q3
2024 production and 12% higher than Q2 2025 due to increase in production in
the Alberta Llanos field.
Average Daily Natural Gas and Oil Production and Sales Volumes
Three months ended Nine months ended
September 30 September 30
2025 2024 2025 2024
Natural Gas (Mcf/d)
Natural gas production 1,306 461 1,579 1,047
Natural gas sales 1,306 461 1,579 1,047
Realized Contractual Natural Gas Sales 1,306 461 1,579 1,047
Crude Oil (bbl/d)
Crude oil production 3,990 4,042 3,752 2,960
Inventory movements and other 16 (53) (24) 44
Crude Oil Sales 4,006 3,989 3,728 3,003
Corporate
Natural gas production (boe/d) 218 77 263 175
Natural gas liquids(bbl/d) 6 5 8 4
Crude oil production (bbl/d) 3,990 4,042 3,752 2,960
Total production (boe/d) 4,214 4,124 4,022 3,139
Inventory movements and other (boe/d) 16 (53) (24) 44
Total Corporate Sales (boe/d) 4,230 4,071 3,999 3,183
( (1) Royalties paid in kind reduce the Company's crude oil sales volumes)
During the three and nine months ended September 30, 2025, the majority of
production was attributed to Colombia, where all of Company's blocks were
producing, except for Capella.
Natural Gas and Oil Revenues
Three months ended Nine months ended
September 30 September 30
2025 2024 2025 2024
Natural Gas
Natural gas revenues 60,435 23,714 495,219 403,164
NGL revenues 26,654 26,753 108,429 78,775
Royalties (5,714) (3,852) (30,221) (391)
Revenues, net of royalties 81,375 46,615 573,427 481,548
Oil
Oil revenues 20,884,803 23,981,362 60,453,671 57,110,675
Royalties (2,422,204) (2,727,862) (7,108,061) (6,740,821)
Revenues, net of royalties 18,462,600 21,253,500 53,345,610 50,369,854
Corporate
Natural gas revenues 60,435 23,714 495,219 403,164
NGL revenues 26,654 26,753 108,429 78,775
Oil revenues 20,884,803 23,981,362 60,453,671 57,110,675
Total revenues 20,971,892 24,031,829 61,057,319 57,592,614
Royalties (2,427,918) (2,731,714) (7,138,282) (6,741,212)
Natural gas and crude oil revenues, net of royalties 18,543,974 21,300,115 53,919,037 50,851,402
Natural gas and crude oil revenues, net of royalties, for the three and nine
months ended September 30, 2025 were $18,543,974 and $53,919,037 (2024:
$21,300,115 and $50,851,402), respectively, which represents a decrease of 13%
and a 6% increase when compared to 2024, respectively. The decrease from Q3
2024 is mainly due to a decrease in commodity prices, whereas the increase in
the nine months period is mainly due to increased oil production in Colombia
during 2025.
Average Benchmark and Realized Prices
Three months ended September 30 Nine months ended September 30
2025 2024 Change 2025 2024 Change
Benchmark Prices
AECO (C$/Mcf) $0.64 $0.70 146% $1.51 $1.48 32%
Brent ($/bbl) $69.80 $72.87 (4%) $70.64 $80.18 (12%)
West Texas Intermediate ($/bbl) $64.95 $75.15 (15%) $66.65 $77.55 (13%)
Realized Prices
Natural gas, net of transportation ($/Mcf) $0.50 $0.56 (72%) $1.15 $1.41 (49%)
Natural gas liquids ($/bbl) $45.69 $61.24 (19%) $52.81 $65.56 (20%)
Crude oil, net of transportation ($/bbl) $56.67 $65.35 (13%) $59.40 $69.66 (15%)
Corporate average, net of transport ($/boe)((1)) $53.90 $64.04 (6%) $55.93 $66.28 (12%)
( (1)Non-IFRS measure)
The Company realized prices of $53.90 and $55.93 per boe during the three and
nine months ended September 30, 2025 (2024: $64.04 and $66.28), due to lower
oil and natural gas prices during 2025, when compared to 2024.
Operating Expenses
Three months ended September 30 Nine months ended September 30
2025 2024 2025 2024
Natural gas & NGL's 266,160 82,505 1,052,283 592,835
Crude oil 4,378,916 2,170,097 15,610,239 6,204,359
Total operating expenses 4,645,076 2,252,602 16,662,522 6,797,194
Natural gas ($/Mcf) $2.22 $1.95 $2.44 $2.07
Crude oil ($/bbl) $11.88 $5.91 $15.34 $7.57
Corporate ($/boe)((1)) $11.94 $6.00 $15.26 $7.82
( (1)Non-IFRS measure)
During the three and nine months ended September 30, 2025, Arrow incurred
operating expenses of $4,645,075 and $16,662,522 (2024: $2,252,602 and
$6,797,194), respectively. This increase in operating costs is mainly due to
increased production in the Company's Carrizales Norte and Alberta Llanos
fields, including trucking water production to disposal wells or third-party
disposal facilities, and stimulation workovers. The Company has developed
additional disposal wells and fields to bring down costs associated with water
disposal.
Operating Netbacks
Three months ended September 30 Nine months ended September 30
2025 2024 2025 2024
Natural Gas ($/Mcf)
Revenue, net of transportation expense $0.50 $0.56 $1.15 $1.41
Royalties ($0.05) ($0.09) ($0.07) ($0.00)
Operating expenses ($2.22) ($1.95) ($2.44) ($2.07)
Natural Gas operating netback((1)) ($1.76) ($1.48) ($1.36) ($0.66)
Crude oil ($/bbl)
Revenue, net of transportation expense $56.67 $65.35 $59.40 $69.66
Royalties ($6.57) ($7.44) ($6.98) ($8.22)
Operating expenses ($11.88) ($5.91) ($15.34) ($7.57)
Crude Oil operating netback((1)) $38.21 $52.00 $37.08 $53.87
Corporate ($/boe)
Revenue, net of transportation expense $53.90 $64.04 $55.93 $66.28
Royalties ($6.24) ($7.28) ($6.54) ($7.76)
Operating expenses ($11.94) ($6.00) ($15.26) ($7.82)
Corporate Operating netback((1)) $35.72 $50.76 $34.13 $50.70
( (1))Non-IFRS measure
The operating netbacks of the Company for the three and nine months ended
September 30, 2025 have been affected by decreases in crude oil and natural
gas prices, and increasing operating costs from its Tapir fields, which have
experienced increased water production and workovers. The Company has
developed alternatives to replace trucking water for disposal with both
disposal wells and aspersion fields to address the increase in water handling
costs.
General and Administrative Expenses (G&A)
Three months ended September 30 Nine months ended September 30
2025 2024 2025 2024
General & administrative expenses 3,171,911 3,057,447 10,432,305 9,869,834
G&A recovered from 3(rd) parties (337,203) (194,827) (944,239) (611,715)
Total G&A 2,834,708 2,862,620 9,488,066 9,258,119
Cost per boe $7.28 $7.63 $8.69 $10.65
For the three and nine months ended September 30, 2025, G&A expenses
before recoveries totaled $3,171,911 and $10,432,305 (2024: $3,057,447 and
$9,869,834), respectively. G&A expenses were marginally changed when
compared to Q3 2024, due to the Company's increased production. On a year to
date basis, G&A expenses were reduced, on a per barrel basis, when
compared to 2024.
Share-based Compensation
Three months ended September 30 Nine months ended September 30
2025 2024 2025 2024
Share-based payments 451,048 144,050 207,418 555,173
Share-based compensation for the three and nine months ended September 30,
2025 totaled an expense of $451,048 and $207,418 (2024: $144,050 and
$555,173), respectively due to fair market valuation of this obligation with a
corresponding effect in stock based compensation liability.
Financing Costs
Three months ended September 30 Nine months ended September 30
2025 2024 2025 2024
Financing expense paid or payable 97,463 112,745 115,194 437,853
Non-cash financing costs 78,139 46,144 219,185 124,883
Net financing costs $175,602 158,889 $334,379 562,736
The finance expense for 2025 is mostly related to lease obligation interest
and financial transactions tax paid in Colombia. The non-cash finance cost
represents the accretion in the present value of the decommissioning
obligation for the period.
Depletion and Depreciation
Three months ended Nine months ended
September 30 September 30
2025 2024 2025 2024
Depletion and depreciation 5,703,343 4,681,591 15,404,005 11,475,258
Depletion and depreciation expense for the three and nine months ended
September 30, 2025 totaled $5,703,343 and $15,404,005 (2024: $4,681,591 and
$11,475,258), respectively. The Company uses the unit of production method and
proved plus probable reserves to calculate its depletion and depreciation
expense.
Impairment loss
Three months ended Nine months ended
September 30 September 30
2025 2024 2025 2024
Impairment loss - - 1,542,000 -
As at June 30, 2024, the Company reviewed its cash-generating units ("CGU")
for property and equipment and determined that there were indicators of
impairment in its Canada CGU and recognized a loss of $1,542,000.
LIQUIDITY AND CAPITAL RESOURCES
Capital Management
The Company's objective is to maintain a capital base sufficient to provide
flexibility in the future development of the business and maintain investor,
creditor and market confidence. The Company manages its capital structure
and makes adjustments in response to changes in economic conditions and the
risk characteristics of the underlying assets. The Company considers its
capital structure to include share capital, debt and adjusted working capital.
From time to time the Company may issue common shares or other securities,
sell assets or adjust its capital spending to manage current and projected
debt levels. As at September 30, 2025 the Company has a working capital of
$173,863 the Company's net debt (net cash) was calculated as follows:
September 30, 2025
Current assets $ 17,259,451
Less:
Accounts payable and accrued liabilities (15,789,606)
Income taxes payable (595,239)
Net debt (Net cash) ((1)) $ (874,606)
((1))Non-IFRS measure
Working Capital
As at September 30, 2025 the Company's adjusted working capital was calculated
as follows:
September 30, 2025
Current assets:
Cash $ 6,370,539
Restricted cash and deposits 283,973
Trade and other receivables 3,719,990
Taxes receivable 6,565,898
Other current assets 319,051
Less:
Accounts payable and accrued liabilities (15,789,606)
Lease obligation (57,185)
Income tax payable (595,240)
Stock based compensation liability (643,558)
Working capital((1)) $ 173,863
((1))Non-IFRS measure
Debt Capital
As at September 30, 2025 the Company does not have any outstanding debt
balance. The Company has entered into a two-year crude prepayment agreement
with an integrated energy major to market its oil production in Colombia.
The agreement provides access to US$20 million in a revolving line of credit
in year one and US$15 million in year two. The interest rate is SOFR + 4%
for the first US$10 million and SOFR + 5% for amounts exceeding US$10 million.
As at September 30, 2025, no funds have been withdrawn from this agreement.
Letters of Credit
As at September 30, 2025, the Company had obligations under Letters of Credit
("LC's") outstanding totaling $3.6 million to guarantee work commitments on
exploration blocks and other contractual commitments. In the event the Company
fails to secure the renewal of the letters of credit underlying the ANH
guarantees, or any of them, the ANH could decide to cancel the underlying
exploration and production contract for a particular block, as applicable.
Current Outstanding Letters of Credit
Contract Beneficiary Issuer Type Amount Renewal Date
(US $)
SANTA ISABEL ANH AESC Abandonment 685,297 April 14, 2026
ANH AESC Financial Capacity 1,672,162 December 30, 2025
COR - 39 ANH AESC Compliance 100,000 December 30, 2025
OMBU ANH AESC Financial Capacity 436,300 April 14, 2026
ANH AESC Abandonment 708,119 August 28, 2026
Total 3,601,878
Share Capital
As at September 30, 2025, the Company had 285,864,348 common shares and
17,196,668 stock options outstanding.
CONTRACTUAL OBLIGATIONS
The following table provides a summary of the Company's cash requirements to
meet its financial liabilities and contractual obligations existing at
September 30, 2025:
Less than 1 year 1-3 years Thereafter Total
Exploration and production contracts - 12,000,000 - 12,000,000
The Company has entered into a number of exploration contracts in Colombia
which require the Company to fulfill work program commitments. In aggregate,
the Company has outstanding commitments of $12 million. The Company have made
an application to cancel its commitments on the COR-39, which represents the
totality of the Company's current commitments.
SUMMARY OF THREE MONTHS RESULTS
2025 2024 2023
Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4
Oil and natural gas sales, net of royalties
18,543,974 15,868,938 19,506,125 22,873,626 21,300,115 15,146,366 14,404,921 13,406,513
Net income (loss) 3,089,683 (934,735) 2,663,764 2,081,956 6,668,493 1,247,825 3,176,727 (10,492,053)
Income (loss) per share -
basic 0.01 (0.00) 0.01 0.01 0.02 0.00 0.01 (0.04)
diluted 0.01 (0.00) 0.01 0.01 0.02 0.00 0.01 (0.04)
Working capital (deficit) 173,863 393,211 11,036,334 11,646,169 9,622,125 6,657,117 9,520,829 8,669,114
Total assets 93,684,265 92,729,950 90,532,063 81,268,734 73,535,397 67,864,633 64,579,940 62,275,023
Net capital expenditures 9,287,571 14,771,206 11,379,180 8,928,725 6,945,779 8,965,408 6,281,329 10,471,447
Average daily production (boe/d) 4,214 3,767 4,085 4,738 4,124 2,638 2,730 2,666
The Company's oil and natural gas sales have decreased 13% in Q3 2025 when
compared to Q3 2024 due decreased commodity prices and increased when compared
to Q2 2025 due to increased production in its existing assets.
Trends in the Company's net income are also impacted most significantly by
operating expenses, financing costs, income taxes, depletion, depreciation and
impairment of oil and gas properties, and other income.
OUTSTANDING SHARE DATA
At November 26, 2025 the Company had the following securities issued and
outstanding:
Number Exercise Price Expiry Date
Common shares 285,864,348 n/a n/a
Stock options 250,000 CAD$ 1.15 October 22, 2028
Stock options 100,000 CAD$ 0.31 May 3, 2029
Stock options 900,000 CAD$ 0.05 March 20, 2030
Stock options 900,000 CAD$ 0.05 April 13, 2030
Stock options 133,334 CAD$0.28 December 9, 2025
Stock options 416,668 CAD$0.26 March 7, 2026
Stock options 1,681,667 GBP 0.1675 June 21, 2026
Stock options 50,000 CAD$0.32 July 23, 2026
Stock options 666,667 CAD $0.33 March 21, 2026 and 2027
Stock options 5,495,926 CAD $0.375 October 29, 2026 and 2027
Stock options 3,854,444 CAD $0.475 Mar. 11, 2026, 2027 and 2028
Stock options 6,198,334 CAD $0.225 April 8, 2027, 2028 and 2029
OUTLOOK
The Company has efficiently deployed the capital generated on successful
drilling campaigns at Rio Cravo, Carrizales Norte and Alberta Llanos on the
Tapir Block. These campaigns have translated into production growth and
positive cashflows, providing Arrow with the funds required to expand
its capital program. In 2025, the Company has been having another year of
production growth with a balanced program of both development and low risk
exploration drilling on the Tapir Block. The Company has a strong balance
sheet, with no debt and cash flow from operations which will fund the
remaining 2025 program.
CRITICAL ACCOUNTING ESTIMATES
A summary of the Company's critical accounting estimates is contained in Note
3 of the December 31, 2024 Annual Financial Statements. These accounting
policies are subject to estimates and key judgements about future events, many
of which are beyond Arrow's control.
SUMMARY OF MATERIAL ACCOUNTING POLICIES
A summary of the Company's material accounting policies is included in Note 3
of the Annual Financial Statements. These accounting policies are consistent
with those of the previous financial year.
RISKS AND UNCERTAINTIES
The Company is subject to financial, business and other risks, many of which
are beyond its control and which could have a material adverse effect on the
business and operations of the Company. Please refer to "Risk Factors" in the
MD&A for the year ended December 31, 2024 for a description of the
financial, business and other risk factors affecting the Company which are
available on SEDAR at www.sedar.com
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