Arrow Exploration Corp (TSX-V:AXL, AIM:AXL, OTC:CSTPF) has provided an update on its operations and said it has set its 2023 capital budget at a total of US$32 million.
The company said the contracted 1,500 HP drilling rig has arrived at the multiwell pad at Rio Cravo Este (RCE).
Arrow is poised to spud the first of three low-risk infill wells, RCE-3, within the next five days. These wells are expected to take 12 days to drill and a further 10 days to bring on-stream. Arrow expects RCE-4 and RCE-5 will be drilled immediately following RCE-3.
As previously reported, these infill wells have similar productivity potential to RCE-2 and RCS-1 which are currently producing 850 barrels of oil per day (bopd) net combined, well above forecasted rates.
READ: Arrow Exploration updates on Colombia operations; has cash balance of C$14M
The company is planning to drill two additional wells into the Gacheta Sandstone reservoir in the fault-bounded RCE structure. RCE-2 tested rates exceeding 700 bopd gross from the Gacheta Sandstone. Dedicated Gacheta wells would likely spud in Q4 2023 after three Carrizales Norte (CN) wells have been completed.
At Carrizales Norte, Arrow continues construction of the road, pad and cellars for the three planned CN wells. The road and pad are expected to be complete in mid-February and the wells are expected to be drilled immediately following RCE-5 and the mobilization of the rig to the new pad.
As previously reported, Arrow has also commenced the 134 square kilometer 3D seismic project on the Tapir block. The 3D seismic project is scheduled to be completed in Q1 2023.
The company said it is continuing to recomplete existing wells that display additional production upside in unperforated zones. This program has been successful in both the RCE field and the Oso Pardo Field. Arrow said it is also considering additional perforations on RCS-1 once RCE-3, RCE-4 and RCE-5 are completed and on production.
2023 Capital Budget
Arrow said its average January corporate production was approximately 1,800 barrels of oil equivalent per day (boe/d), with short-term outages due to weather at Ombu and Pepper impacting production rates.
As of December 31, 2022, Arrow's cash balance was approximately US$13 million.
The company said its approved 2023 capital budget of US$32 million is to be financed from current cash reserves and operating cash flow.
The capital program includes the following:
- A 134 square kilometre 3D seismic program
- A 10 well drilling program, including 3 C7 wells at RCE, each expected to add initial 300-500 barrels per day (bbls/d) net to Arrow; 3 wells at CN, each expected to add initial 300-500 bbls/d net to Arrow; 2 Gacheta wells at RCE, each expected to add initial 200-400 bbls/d net to Arrow; and 2 wells at Oso Pardo, each expected to add initial 300-500 bbls/d net to Arrow
- Infrastructure including a road and pad at CN; and a water disposal well conversion at RCE
Arrow Exploration - operating in Colombia via a branch of its 100% owned subsidiary Carrao Energy SA - has 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.
Arrow's 50% interest in the Tapir Block is contingent on the assignment by Ecopetrol SA of such interest to Arrow. Arrow's seasoned team is led by a hands-on executive team supported by an experienced board.
Contact the author at jon.hopkins@proactiveinvestors.com