Arrow Exploration Corp (TSX-V:AXL, AIM:AXL, OTC:CSTPF) has updated on its latest vertical wells at the Alberta Llanos field in Colombia and told investors that production rates for January exceeded forecasts – with net output rising above 4,500 barrels per day.
In addition to the vertical wells, which are the subject of today's operations update, the company is also planning to drill more horizontal wells after those drilled in 2024 proved successful.
At Alberta Llanos, the vertical AB-1 well has now been put back on production after a weeklong shut-in (to allow new wells to come online), and was yielding 260 barrels of oil per day (gross). Net to Arrow, the rate equates to around 130 bopd. Based on the well data, Arrow expects AB-1 to reach ‘payout’ within ten months.
AB-3, Arrow’s latest vertical well, was drilled to a depth of 9,650 feet, cut 56 feet of net oil pay, and after coming online saw an initial production rate of 580 bopd gross, and 290 bopd net to Arrow.
AB-2, however, flowed at sub-economic rates and has been suspended, for a review of potential alternative completions in an alternative zone – as the well has multiple hydrocarbon-bearing intervals.
Confirms horizontal
Importantly, the AB-3 result provides Arrow with confirmation that it will be feasible to install horizontal wells at Alberta Llanos.
"Initial production from the AB-3 well is an exciting event for Arrow, reaffirming the horizontal development potential of the Alberta Llanos field,” chief executive Marshall Abbott said in a statement.
“In addition to the thick pay zone (56 feet) encountered in the Ubaque formation, additional pay zones currently behind pipe, the C7, and Guadalupe provide further opportunities for production and reserves increases."
Abbott added: “The Alberta Llanos discovery is material to Arrow and we are looking forward to the results of horizontal wells in the field which will economically develop the Ubaque reserves."
He noted, meanwhile, that AB-2 was “a long step out” testing a potential extension at the project’s northern boundary, and may still be a future producer from its two other zones.
Drill schedule
Next, Arrow expects to drill three horizontal wells at the Carrizales Norte field.
Also, a second rig is expected to join the campaign, in the second quarter of 2025, to bring online low-risk production with four ‘directional’ wells slated for the RCE field, before the second rig is moved to drill horizontal wells at Alberta Llanos.
"Arrow's corporate production additions will commence prior to quarter-end once the rig mobilization is complete on a pace of one horizontal on-stream approximately every three weeks at the Carrizales Norte pad. This is an integral component of our US$ 50 million board-approved budget that includes drilling 23 wells in 2025,” Abbott added.
“We are excited by the potential of our low-risk portfolio in the Llanos Basin and look forward to continuing to add shareholder value via the drill bit."
Seismic
Besides the drilling, Arrow noted that it is progressing the East Tapir 3D seismic acquisition programme ‘on schedule’, with equipment and personnel moving to the site.
The East Tapir 3-D will cover 100 square kilometres where existing leads, previously on a two-dimensional dataset, will be defined in more detail.
Arrow expects the seismic will open up another potential value step change for the company, by enabling further drilling opportunities in another area.
The company noted that it had US$22.7 million of cash, as of 1 February.