Arrow Exploration Corp (TSX-V:AXL, AIM:AXL, OTC:CSTPF) has updated on its operations in Colombia where, in the Tapir block, it has advanced the CN-4 and CN-5 wells.
The company, holding a 50% interest in the project, told investors that the CN-4 well has been drilled to a depth of 9,552 feet, targeting the Ubaque formation, and encountered 29 feet of true vertical depth net oil pay.
Initial production rates measured 758 barrels of oil per day (BOPD) gross.
At CN-5, where drilling targeted the Carrizales Noroeste prospect, the well reached a depth of 9,050 feet and identified 45 feet of oil pay. Further details are pending, as the company expects to complete the well for production ‘over the next few weeks’.
Chief executive Marshall Abbott highlighted that the Ubaque reservoir sets the stage for conventional horizontal exploitation, which the company expects will lead to material production volumes, cash flow and reserves growth.
Other pay zones currently behind pipe – i.e. confirmed by drilling but yet to be developed for production - will provide further opportunities for production and reserves increases in the future, he added.
"The thick pay zones encountered in the CN-4 and CN-5 wells underpins the step change in value that has been created,” CEO Abbott said in a statement.
“The company expects material reserves additions and production from further development of the multi-zone potential at Carrizales Norte.
Abbott added: "The CN-4 and CN-5 well results have helped determine the size of the Ubaque pool at Carrizales Norte and there are strong indications that the reserves additions will transform Arrow into a much larger company.
“Multiple development locations are anticipated based on current results.
"Management plans to control pump speed and choke wells back to efficiently manage the reservoir and discourage premature water production. Arrow believes this is in the best long-term interest of the reservoir and will maximize recovery from both [the RCE and CN] fields.
Abbott, meanwhile, described a “strong momentum” as the company progresses its fully funded, low-risk drilling campaign.
“The CN-4 and CN-5 wells have successfully increased production and are expected to add materially to reserves. Alongside this, we are encouraged by the number of prospects the Tapir 3D seismic has outlined and the drilling inventory it has provided.”
In London, Arrow shares gained more than 7.5% in Tuesday morning’s early deals, changing hands at 21.55p each.