Arrow Exploration Corp (TSX-V:AXL, AIM:AXL, OTC:CSTPF) has brought two new horizontal wells into production in Colombia’s Llanos Basin, boosting its current output to between 4,600 and 4,800 barrels of oil equivalent per day, net to the company.
The wells, named AB HZ4 and AB HZ5, came online in June and July, respectively, at the Alberta Llanos field.
AB HZ5 is producing at around 1,790 barrels of oil per day (BOPD) gross, of which 895 BOPD is Arrow’s share, while AB HZ4 delivers about 880 BOPD gross (440 BOPD net).
Arrow said both wells exceeded initial forecasts for production rates and pressures.
"Both wells are highly accretive with payback expected in the first six months at current oil prices," said Marshall Abbott, chief executive.
"The success of these two horizontal wells proves the Ubaque concept at Alberta Llanos and has resulted in further development wells being planned.”
Alongside these, two vertical wells, CN11 and RCE9, are also contributing to production.
CN11 at Carrizales Norte has been producing since mid-April at a rate of 143 BOPD gross (72.5 BOPD net), while RCE9 at Rio Cravo Este started in late June with output of 201 BOPD gross (100.5 BOPD net).
Overall, Arrow’s production base has stabilised, with declines slowing as expected.
The company plans to accelerate drilling during the second half of the year, balancing low-risk exploration with infill and development wells. Infill wells are drilled between existing wells to maximise recovery, while exploration aims to find new oil reserves.
Financially, Arrow remains in good shape with a cash balance of $13.5 million as of July 1, no debt and no long-term drilling commitments. The company emphasised flexibility in its work programme amid current oil price volatility.
Two rigs are currently active: one is moving from Alberta Llanos to Carrizales Norte to drill two horizontal wells targeting the Ubaque formation, while the other is drilling the first horizontal well targeting the Ubaque formation at Rio Cravo Este.
Arrow has also completed initial processing of a new 3-D seismic survey covering 100 square kilometres in the East Tapir area.
CEO Abbott said: “The East Tapir 3-D seismic program has resulted in a number of new prospects, including Icaco and Macoya.
"These two prospects appear to be stacked reservoirs similar to those found at the RCE and Carrizales Norte fields. Management is encouraged by technical work done to refine these prospects and has started the surface land acquisition process to test these prospects in the near future.”
Arrow is continuing to review its drilling schedule for 2025 and 2026, adapting to market conditions with the aim of growing production while maintaining financial strength.
The company also noted it is considering a potential share buyback depending on progress in its drilling programme.