Arrow Exploration Corp (TSX-V:AXL, AIM:AXL, OTC:CSTPF) has seen what it calls “an extremely important” result from the Carrizales Norte-1 (CN-1) well which in its first phase of production testing measured a peak rate of 1,222 barrels of oil per day (bopd).
The company, in a statement, gave details of the production test of the Ubaque formation which is one of three formations encountered in the CN-1 well that were selected for testing.
Ubaque spanned some 58 feet of net pay in the CN-1 well which was recently drilled down to a depth of 9,190 feet and measured an aggregate of 148 feet of net pay.
In Ubaque, a submersible pump was installed after the formation was perforated, and a production test was run for a 58-hour period.
Arrow explained that it conducted three tests, at different rates, to evaluate productivity and to plan for water cut management. Its first test yielded an average rate of 491 bopd, the second reached an average of 891 bopd and the third averaged 1,134 bopd.
The company noted that initial production results are not necessarily indicative of long-term performance or ultimate recovery.
"The Carrizales Norte-1 discovery and the Ubaque test are extremely important and material events for Arrow,” said chief executive Marshall Abbott.
“The Ubaque test - the first on the Carrizales Norte field - shows that oil from the formation can be produced at high rates using conventional means. The test is further evidence of the potential of the Tapir block in the prolific Llanos Basin."
Abbott added: "Our expectation is that the Carrizales Norte wells will be quick to payout in the current oil price environment with triple digit IRRs, providing positive cashflow for the company.
“This is a very exciting time for Arrow, and we look forward to providing further updates on our progress."
He noted that Arrow will proceed to test two further zones, the Gacheta and C7 reservoirs, in the coming weeks before a decision is made to determine which zone will be used to bring the CN-1 into production.
Interim results
In a separate statement, Arrow provided interim results for quarter ended 31 March 2023, a period in which total oil and natural gas revenue more than doubled to US$6.9mln and earnings (adjusted EBITDA) increased more than seven times to US$4.3mln.
Production averaged 1,635 bopd, marking a rise of 43% as three wells were brought online at the Rio Cravo Este (RCE) field.
Whilst testing progresses at RN-1, meanwhile, the company anticipates drilling two further wells at Carrizales Norte by year-end.
At RCE, it intends to support production growth further with two additional wells planned, whilst elsewhere it plans to drill two development wells at the Oso Pardo block.
"Arrow has had a strong start to 2023, including the drilling of three RCE wells and the CN-1 well, which is expected to have a significant impact on the company's production and reserves, as well as establishing a new core area,” Abbott said in the interim results statement.
“The 3D seismic West Tapir project has completed shooting, is currently being processed and is expected to further evaluate the 2D recognized fault prospects.
“The Arrow team continues to strive towards excellence and increasing shareholder value."