Arrow Exploration Corp. (CVE:AXL) has said it plans to raise $12 million from investors in an expanded capital program as it moves ahead with a dual listing of its stock on the AIM market of the London Stock Exchange.
The proceeds of the capital raise will help fund the drilling of two wells at its Rio Cravo Este property and one well at Carrizales Norte, with the balance used for additional working capital.
Arrow Exploration has a portfolio of Colombia oil assets that are under exploited, underexplored and offer high potential growth. Its business plan is to expand oil production from some of the country’s most active basins, including the Llanos, Middle Magdalena Valley and Putumayo basins.
The company said it expects to be able to reach a production level of approximately 3,000 barrels of oil equivalent per day (boepd) within about 18 months of the closing of its offer, primarily due to the additional drilling at Rio Cravo Este and Carrizales Norte.
“The drilling program is expected to be funded by the proceeds from the offering as well as cash flow generated from operations,” Arrow Exploration noted.
“The company's ability to reach this production level will depend on additional factors, including but not limited to oil prices, drilling results, the cost of drilling the wells and the availability of drilling rigs within Colombia on commercial terms.”
Arrow Exploration said the dual listing will boost liquidity for shareholders and give it direct access to London’s capital markets, among the global leaders for capital formation in the oil and gas sector, while broadening its investor base. The move will also enhance its reputation and financial standing in Colombia.
Following completion of the offering, it said its shares will be admitted to trading on AIM. They will continue to be listed and to trade on the TSX Venture Exchange in Canada.
As part of its strategy to create more value for its shareholders, Arrow Exploration said it is also in negotiations to dispose of its non-core, 10% working interest in the Ombu block. Ombu, in Colombia’s Caguan-Putumayo basin, contains the Capella oil field.
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