Arrow Exploration Corp (TSX-V:AXL, AIM:AXL, OTC:CSTPF) CEO Marshall Abbott talked with Proactive about the company’s strong operational and financial performance in the first quarter of 2025.
Abbott detailed how Arrow Exploration achieved a 36% increase in revenue compared to the same period last year, citing successful drilling, reduced costs, and higher oil prices.
Operationally, Arrow completed four wells, two of them horizontal, and a 100-square-kilometre 3D seismic program in the southern portion of its block.
The company now has two rigs operating in parallel, one vertical and one horizontal, working across infill, step-out, and exploratory wells.
Proactive: All right. Welcome back inside our Proactive newsroom. And joining me now is Marshall Abbott. He is the CEO of Arrow Exploration. And Marshall, it's great to see you again. How are you?
Marshall Abbott: I'm great. Good to be with you again.
Good to be with you also. Especially when you're reporting strong first quarter numbers—an increase in revenue of 36% compared to the same period a year ago. So what's been the key behind this performance?
Well, we've had some luck with the drill bit, for sure. And we've also done it very efficiently and expeditiously. Drilling costs came down, oil prices were higher, and production was certainly higher. We're in good shape—lots of money in the bank, we're protective of the balance sheet, and operationally we've got momentum. So I think that really paid us well in the first quarter.
Talk to me a bit about the operational side. You mentioned things were going well there, and I know there were a number of developments in that first quarter.
Yeah. We had four wells—two of them horizontal—and they all worked. So that's a very positive sign. We completed our 100 square kilometre 3D seismic program at the south end of the block, and that's worth its weight in gold. We're very excited with what we see on the 3D seismic. Operationally, we're in great shape. We've got two rigs rolling—one's drilling horizontal, one's drilling vertical, at different pads. So there's quite a bit of infill and development drilling to do. We're covering the full spectrum of risk between infill, development, step-outs, development catch, and exploration. We're feeling really good about our portfolio.
Is that the next step operationally—just to continue drilling over the next three to six months?
Yeah. We've got a $50 million board-approved budget, and that's going to have us drilling about 23 wells by year-end—again, covering the full spectrum of risk. So we'll see reserve adds on the development side, reclassify locations from 2P to 1P to PDP. The reserves are in great shape, the backyard’s in great shape. We've got very committed staff doing a great job.
It puts the company in a unique position. Other oil companies have reported struggles, but it seems like the work that happened last year and led into this year has really put the company on strong footing heading forward.
Yeah. We're deemed to be quite lucky working in the Llanos Basin in Colombia. It's very forgiving. Drilling is relatively straightforward all the way down to 10,000 feet. Prices are competitive compared to anywhere else, especially Canada. Prices are probably cheaper. I think we've demonstrated to the market—not only in Colombia but worldwide—that we're one of the more efficient, low-cost operators in the basin. A big key of that was learning early how to handle water. When we turn these wells on, they come on at great oil rates, but with them comes a lot of water. You have to be able to put that water away. And it's our intention to be pushing 80,000 barrels of water disposal daily by year-end.
One more thing—the pre-payment agreement you entered into with an energy company. Can you talk me through that and why it was an interesting move?
Sure. Being just little guys and still successful with a very healthy balance sheet, it's very difficult to get reserve-based lending in Latin America. We're not quite at the size threshold to garner bank interest. So we went down the path of doing a prepay to give us dry powder and look at other opportunities. What we're seeing in Colombia—specifically in the Llanos Basin—is that some of the bigger players are decanting assets that would make a lot of sense for us to pursue and develop. I think we've also proven that we're very efficient exploiters.
Quotes have been lightly edited for clarity and style