Arrow Exploration Corp. (TSX-V:AXL) has announced plans to tie-in the 3-26 well in West Pepper, Alberta, which has the potential to produce natural gas.
The Calgary-based company said it is beginning the process to tie-in the behind-pipe natural gas from the exploration well after a February 2021 independent engineering report estimated an initial production rate of 5.5 million standard cubic feet per day (scf/d) from the well.
Other findings from the preliminary report, which was not prepared in accordance with NI 51-101 reserve reporting requirements, include estimated onstream costs of around C$1.3 million and “rapid” payback of the tie-in costs and positive cash flow, according to Arrow.
READ: Arrow Exploration releases production update following restart at Middle Magdalena Valley Basin in Colombia; two analysts commence coverage
The report also indicated there would be no expected natural gas capacity constraints, the energy company told investors.
Arrow also noted that front-month AECO natural gas futures contracts are currently trading at approximately C$3.40 per gigajoule (GJ) and strip prices higher than C$2.95/GJ for the next 12 months, indicating a capital payback period of less than four months from the start of production, according to its estimates.
The energy firm also updated shareholders on its planned AIM listing in London, saying that it plans to concurrently pursue an offering of shares to fund an expanded capital program.
“The company continues to proceed with the admission and offering process, and expects the process to conclude in September 2021,” Arrow said in a statement.
Arrow’s core assets are in Colombia at the Tapir Block and the Oso Pardo Field. It also has an extensive inventory of low-risk, high-upside, development and exploration opportunities.
Contact Angela at angela@proactiveinvestors.com
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