Arrow Exploration Corp (TSX-V:AXL, AIM:AXL, OTC:CSTPF) told investors it has a 'healthy' balance sheet as the oiler updated on its Colombia operations, which included that it has started moving a rig to the Rio Cravo Este (RCE) field where three more infill wells will be sunk in the first quarter of 2023 - the first in January - to exploit the Carbonera Sandstone reservoir.
"The infill wells have similar productivity potential to RCE-2 and RCS-1 which are currently producing 850 BOPD net, well above forecasted rates. RCE-2 was paid out in 37 days with an onstream net cost of $4.2MM," the company said.
Upon completion of the three wells, Arrow added that it was mulling drilling two to three more wells into the Gacheta Sandstone reservoir. The RCE-2 well tested rates exceeding 700 BOPD gross from the Gacheta Sandstone. Dedicated Gacheta wells would likely spud in the third quarter of 2023, it said.
The company, which had cash of C$14 million as of the beginning of December, also noted it had completed the preparation of an additional field to be used for production water dispersion.
READ: Arrow Exploration focuses on improving balance sheet and generating free cash flow after record third quarter
At the Carrizales Norte operations, Arrow said it had begun construction of the road, pad and cellars for three planned Carrizales Norte (CN) wells, which are expected to be drilled sometime between March and June next year.
It is also in talks with a separate drilling company to bring in a second rig to drill CN-1, CN-2 and CN-3, advancing the drilling of Carrizales Norte by around six weeks, it said.
Elsewhere, at the Tapir block, Arrow has kicked off its 134 square kilometer (sq km) 3D seismic project, which is scheduled to be completed in the first quarter of 2023. Initial drilling on defined low risk prospects could occur as early as the fourth quarter of 2023, added Arrow.
On the workover program, the company said it was continuing to "recomplete existing wells that display additional production upside in unperforated zones," which has been successful in the RCE field and the Oso Pardo field.
It is considering additional perforations on RCS-1 once RCE-3 RCE-4 and RCE-5 are completed.
Arrow also said in the statement that certain directors and management had recently exercised 2,983,332 options at £0.07625 per common share, and the board had granted 5,478,332 options on December 21 this year, as part of its stock option plan to certain directors and senior management.
The company says its Colombian oil assets are underexploited, under-explored and offer high potential growth. The aim is to expand oil production from some of Colombia's most active basins, including the Llanos, Middle Magdalena Valley (MMV) and Putumayo Basin.
Its assets are mainly operated with high working interests, and the Brent-linked light oil pricing exposure combines with low royalties to yield attractive potential operating margins.
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