REG - Arrow Exploration - Operational Update and 2025 Year-End Reserves

Arrow ExplorationAnnouncement

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RNS Number : 3999X  Arrow Exploration Corp.  20 March 2026

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Operational update AND 2025 Year-end reserves

 

CALGARY, March 20, 2026 - 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 give an
operations update and announce the results of its 2025 year-end reserves
evaluation by Boury Global Energy Consultants Ltd. ("BouryGEC").

All reserves volume figures stated below are on a Working Interest Gross
Reserve basis. Currency amounts are in United States dollars (unless otherwise
indicated) and comparisons refer to December 31, 2024.

Operational Update

 

Current Drilling Schedule

 

The Mateguafa 11 (M-11) well has been drilled to a total measured depth of
11,455 MD feet (9,328 feet true vertical depth) and has encountered oil
bearing sands in the C7 and C9 Carbonera formations.  The well encountered 18
feet (TVD) of net pay in the C7 and 30 feet (TVD) of net pay in the C9.

Management is planning to perforate these sands and initially produce from the
C7.  Expectations are that the well will be on production in the coming
weeks.  The M-11 well found the two zones structurally higher than any of the
other Mateguafa Attic wells.  The M-11 results have extended the Mateguafa
Attic structure to the south where more development wells will be drilled in
the future.

Due to the continued success at Mateguafa, Arrow now plans to continue
development on the Mateguafa Attic field with a horizontal well targeting the
C9 formation (M-12Hz).M-12Hz is expected to spud by the end of March.
Following M-12Hz,  the rig will then move to the Icaco pad to drill the Icaco
1 (I-1) exploration well.

Arrow continues discussions on the Tapir license extension with regulatory
authorities. Management believes these discussions are positive and beneficial
to all parties and that the extension will ultimately be awarded to Arrow and
our partner.

 

Production

Corporate production is approximately 5,325 boe/d.  Arrow expects additional
production from the M-11 well which is expected to come online in the coming
weeks.

 

2025 Reserve Overview

Arrow's 2025 reserves report shows steady performance with a significant
amount of Arrow's produced volumes having been replaced by the Company's
drilling campaign through the year.

Importantly, BouryGEC reserves report's conservative oil price forecast (with
current oil prices over 50% above its 2026 projection) has a significant
effect on both valuation calculations and the viability of reserves
classification.

When reviewing the 2025 reserve report it is important to understand the
assumptions used by the reserve engineers when producing it.  In particular,
the 1P reserves have been prepared assuming the Tapir block expires with the
contract in February 2028.  The 2P reserves assume the first 5-year extension
period embedded in the Tapir contract is granted.  The 3P reserves assume the
second 5-year extension period embedded in the Tapir contract is granted.
Management continues to work with the regulators and believes that the
extensions will be granted to the partnership.

Discovery and successful development at Mateguafa Attic continues to provide
both production and reserve growth to the Company and the vertical and
horizontal well development at Mateguafa Attic will be reflected in future
reserve reports.  The BouryGEC reserves evaluation reinforces the significant
value Arrow has generated in its Colombian assets and the Company remains
enthused by the further potential value in its prospect portfolio.

 

Marshall Abbott, CEO of Arrow, commented:

"Looking out to the remainder of 2026, Arrow's prospect inventory is
multifaceted and demonstrates the hydrocarbon density of the Tapir block in
the fertile Llanos Basin. Over the rest of the year, we look forward to a
successful drilling campaign that is balanced between development and low risk
exploratory wells."

 

2025 Year-End Reserves Detailed Summary

Management has presented below a summary of Arrow's reserves as at December
31, 2025, on a working interest gross reserves basis, which have been
estimated by BouryGEC, an independent qualified reserves evaluator, in a
reserves report with an effective date of December 31, 2025.  The figures in
the following tables have been prepared in accordance with the standards
contained in the most recent publication of the Canadian Oil and Gas
Evaluation Handbook (the "COGEH") and the reserves definitions contained in
National Instrument 51-101 - Standards of Disclosure for Oil and Gas
Activities ("NI 51-101"). In addition to the summary information disclosed in
this announcement, more detailed information will be included in Arrow's
annual reserves evaluation for the year ended December 31, 2025 to be filed on
SEDAR (www.sedar.com) and posted on Arrow's website (www.arrowexploration.ca).

After tax values have been calculated without taking into account the tax
shelter created by capital spending on projects that do not have reserve
values associated with them, such as the Tapir 3D seismic project, drilling at
Carrizales Norte and annual G&A. Spending on these projects will provide a
tax shelter and result in a reduction in future income tax payments.

 

Brent Crude Oil Price and AECO Gas Price Forecasts in BouryGEC Reserves
Evaluation

 Year-End Forecast:               2026    2027    2028    2029    2030    2031    2032
 Brent (US$/bbl) - Dec. 31, 2025  $67.00  $68.50  $73.50  $75.50  $77.01  $78.55  $80.12
 AECO-C Spot (C$/MMbtu)           C$3.05  C$3.42  C$3.61  C$3.59  C$3.67  C$3.73  C$3.80

 

 

Year-End Working Interest Gross Reserves - Breakdown by Category and Country
(Mboe)

                                            2025    2024    Change  % Change
 Proved developed producing                 1,801   2,384   (583)   -24%
  - Colombia assets (core)                  1404    1889
  - Colombia assets (non-core)              0       0
  - Canada assets                           397     495
 Proved developed non-producing             693     404     289     72%
  - Colombia assets (core)                  297     198
  - Colombia assets (non-core)              396     206
  - Canada assets                                   0
 Proved undeveloped                         2921    3,017   (96)    -3%
  - Colombia assets (core)                  955     1433
  - Colombia assets (non-core)              1,966   1,584
  - Canada assets                                   0
 Total Proved                               5,415   5,805   (390)   -7%
 Probable                                   6,360   7,813   (1453)  -19%
  - Colombia assets (core)                  4,500   4,511
  - Colombia assets (non-core)              1,295   2,758
  - Canada assets                           565     544
 Total Proved plus Probable                 11,775  13,618  (1843)  -14%
 Possible                                   8,327   8,670   (343)   -4%
  - Colombia assets (core)                  6,766   6,915
  - Colombia assets (non-core)              1,332   1,508
  - Canada assets                           229     247
 Total Proved plus Probable & Possible      20,102  22,288  (2186)  -10%

 

Possible reserves are those additional reserves that are less certain to be
recovered than probable reserves. There is a 10% probability that the
quantities actually recovered will equal or exceed the sum of proved plus
probable plus possible reserves.

(1)      "Core" assets include Arrow's share of reserves in the Tapir
Block, the Santa Isabel Block (Oso Pardo), and Mateguafa. Arrow's 50% interest
in the Tapir Block is contingent on the assignment by Ecopetrol SA of such
interest to Arrow.

(2)      "Non-core" assets include the Ombu Block (which includes the
Capella Field)

(3)      "Canada" assets include Fir and Pepper

 

Year-End Net Present Value at 10% - Before Tax ($ Thousands)

 Category                                   2025     2024     % Change
 Proved
   Developed Producing                      32,271   71,253   -55%
   Non-Producing                            15,584   8,311    88%
   Undeveloped                              48,008   35,009   37%
 Total Proved                               95,862   114,573  -16%
   Probable                                 148,633  170,346  -13%
 Total Proved plus Probable                 244,495  284,919  -14%
   Possible                                 228,175  239,227  -5%
 Total Proved plus Probable & Possible      472,670  524,146  -10%

 

Possible reserves are those additional reserves that are less certain to be
recovered than probable reserves. There is a 10% probability that the
quantities actually recovered will equal or exceed the sum of proved plus
probable plus possible reserves.

 

Year-End Net Present Value at 10% - After Tax ($ Thousands)

 

 Category                                   2025     2024     % Change
 Proved
   Developed Producing                      32,271   50,373   -36%
   Non-Producing                            14,520   5,794    151%
   Undeveloped                              27,781   27,165   2%
 Total Proved                               74,572   83,332   -11%
   Probable                                 85,459   78,064   9%
 Total Proved plus Probable                 160,031  161,396  -1%
   Possible                                 125,597  118,451  6%
 Total Proved plus Probable & Possible      285,628  279,847  2%

 

Possible reserves are those additional reserves that are less certain to be
recovered than probable reserves. There is a 10% probability that the
quantities actually recovered will equal or exceed the sum of proved plus
probable plus possible reserves.

 

Forecast Revenues and Costs - Undiscounted ($ millions)

 Category                                   Revenue (3)  Royalties  Operating Cost (2)  DC     Abandonment & Reclamation      BT Future Net Revenue (1)  Income Taxes  AT Future Net Revenue (1)
 Total Proved                               293.1        26.4       74.9                52.6   9.6                            129.5                      31.3          98.2
 Total Proved plus Probable                 663.9        66.1       167.4               84.9   12.7                           332.8                      111.4         221.5
 Total Proved plus Probable & Possible      1,208.6      128.0      281.1               100.5  15.7                           683.3                      264.4         418.9

 

Possible reserves are those additional reserves that are less certain to be
recovered than probable reserves. There is a 10% probability that the
quantities actually recovered will equal or exceed the sum of proved plus
probable plus possible reserves.

(1)      BT = Before Taxes and AT = After Taxes

(2)      Operating Cost less processing and other income

(3)      Revenue includes Petrolco Income

 

 

2024 Year-End Working Interest Gross Reserves Reconciliation (Mboe)

                      Total Proved                                              Total Proved plus Probable                          Total Proved plus Probable & Possible
 31-Dec-24            5,805                                                     13,619                                              22,289
 Technical Revisions  1,439                                                     -152                                                51
 Discoveries
 Economic Factors     (366)                                                     (229)                                               (776)
 Production                                    (1,462)                                                (1,462)                       (1,462)
 31-Dec-25            5,415                                                     11,775                                              20,101

Possible reserves are those additional reserves that are less certain to be
recovered than probable reserves. There is a 10% probability that the
quantities actually recovered will equal or exceed the sum of proved plus
probable plus possible reserves.

 

Qualified Person's Statement (AIM Requirement)

The technical information contained in this announcement has been reviewed and
approved by Grant Carnie, senior non-executive director of Arrow Exploration
Corp. Mr. Carnie is a former member of the Canadian Society of Petroleum
Geologists, holds a B.Sc. in Geology from the University of Alberta and has
over 35 years' experience in the oil and gas industry.
 

Cautionary Statement

The recovery, reserve estimates and future net revenue provided in this news
release are estimates only, and there is no guarantee that the estimated
reserves will be recovered nor represent fair market value.  Actual reserves
may eventually prove to be greater than, or less than, the estimates provided
herein.  In certain of the tables set forth above, the columns may not add
due to rounding.

This press release contains various references to the abbreviation "BOE" which
means barrels of oil equivalent. Where amounts are expressed on a BOE basis,
natural gas volumes have been converted to oil equivalence at six thousand
cubic feet (Mcf) per barrel (bbl). The term BOE may be misleading,
particularly if used in isolation. A BOE conversion ratio of six thousand
cubic feet per barrel is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.

 

This Announcement contains inside information for the purposes of the UK
version of the market abuse regulation (EU No. 596/2014) as it forms part of
United Kingdom domestic law by virtue of the European Union (Withdrawal) Act
2018 ("UK MAR").

 

For further Information, contact:

 Arrow Exploration
 Marshall Abbott, CEO                                    +1 403 651 5995
 Joe McFarlane, CFO                                      +1 403 818 1033

 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 7970 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 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 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. By way of a private commercial contract with the recognized
interest holder before Ecopetrol S.A., Arrow is entitled to receive 50% of the
production from the Tapir block. The formal assignment to the Company is
subject to Ecopetrol's consent.  Arrow's seasoned team is led by a hands-on
executive team supported by an experienced board. Arrow is listed on the AIM
market of the London Stock Exchange and on TSX Venture Exchange under the
symbol "AXL".

 

Reserves Categories

Reserves are estimated remaining quantities of oil and natural gas and related
substances anticipated to be recoverable from known accumulations, from a
given date forward, based on analysis of drilling, geological, geophysical and
engineering data; the use of established technology; and specified economic
conditions which are generally accepted as being reasonable and shall be
disclosed.

"Proved Developed Producing Reserves" are those reserves that are expected to
be recovered from completion intervals open at the time of the estimate. These
reserves may be currently producing or, if shut-in, they must have previously
been on production, and the date of resumption of production must be known
with reasonable certainty.

"Proved Developed Non-Producing Reserves" are those reserves that either have
not been on production or have previously been on production but are shut-in
and the date of resumption of production is unknown.

"Proved Undeveloped Reserves" are those reserves expected to be recovered from
known accumulations where a significant expenditure (e.g., when compared to
the cost of drilling a well) is required to render them capable of production.
They must fully meet the requirements of the reserves category (proved,
probable, possible) to which they are assigned.

"Proved" reserves are those reserves that can be estimated with a high degree
of certainty to be recoverable.

"Probable" reserves are those additional reserves that are less certain to be
recovered than Proved reserves but more certain to be recovered than Possible
reserves.

"Possible" reserves are those additional reserves that are less likely to be
recoverable than Probable reserves.

 

Forward-looking Statements

This news release contains certain statements or disclosures relating to Arrow
that are based on the expectations of its management as well as assumptions
made by and information currently available to Arrow which may constitute
forward-looking statements or information ("forward-looking statements") under
applicable securities laws. All such statements and disclosures, other than
those of historical fact, which address activities, events, outcomes, results
or developments that Arrow anticipates or expects may, could or will occur in
the future (in whole or in part) should be considered forward-looking
statements. In some cases, forward-looking statements can be identified by the
use of the words "continue", "expect", "opportunity", "plan", "potential" and
"will" and similar expressions. The forward-looking statements contained in
this news release reflect several material factors and expectations and
assumptions of Arrow, including without limitation, Arrow's evaluation of the
impacts of COVID-19, the potential of Arrow's Colombian and/or Canadian assets
(or any of them individually), the prices of oil and/or natural gas, and
Arrow's business plan to expand oil and gas production and achieve attractive
potential operating margins. Arrow believes the expectations and assumptions
reflected in the forward-looking statements are reasonable at this time but no
assurance can be given that these factors, expectations and assumptions will
prove to be correct.

The forward-looking statements included in this news release are not
guarantees of future performance and should not be unduly relied upon. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ materially
from those anticipated in such forward-looking statements. The forward-looking
statements contained in this news release are made as of the date hereof and
the Company undertakes no obligations to update publicly or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, unless so required by applicable securities laws.

"Neither TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release"

 

Glossary

Bbl/d: Barrels per day

$/Bbl: Dollars per barrel

Mcf/d: Thousand cubic feet of gas per day

$/Mcf: Dollars per thousand cubic feet of gas

Boe/d: Barrels of oil equivalent per day

$/Boe: Dollars per barrel of oil equivalent

PDP: Proved Developed Producing

1P: Proved Reserves

2P: Proved plus Probable Reserves

3P: Proved plus Probable plus Possible Reserves

Mboe: Thousands of barrel of oil equivalent

MMbtu: Millions btu

MMboe: Millions of barrels of oil equivalent

Mbtu: Thousands btu

Mboe: Thousands of barrels of oil equivalent

Working Interest Gross Reserves: The reserves attributable to the Company's
license working interest pre-taxes and royalties

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