Arrow Exploration Corp (TSX-V:AXL, AIM:AXL, OTC:CSTPF) said it is encouraged by the material results of testing on Rio Cravo Este-2 (RCE-2), its second well on the Tapir Block in the Llanos Basin of Colombia.
RCE-2 identified new zones for further exploitation with flowing results returning better than expected, Calgary-based Arrow added.
The RCE-2 well was spud on April 2, 2022, and targeted a large, three-way fault bounded structure with multiple high-quality reservoir objectives on the Tapir Block. The well was drilled to a total measured depth of 9,600 feet and encountered six hydrocarbon-bearing intervals totaling 90 net feet of oil pay, the company said.
READ: Arrow Exploration posts net income in 2021 as company lifts output and realizes strong oil and gas prices
"We're currently completing the C7 zone, targeting to be on stream early next week. This effectively doubles Arrow's production,” Arrow CEO Marshall Abbott said in a statement. “The company's procedures will be to bring RCE-2 on slowly and increase production to best manage the oil reservoir."
Specific production test rates for the isolated zones (shallowest to deepest) include:
- Carbonera C7 and C7 Stringer: tested 2,000 barrels of oil per day (bopd) - net 1,000 bopd - peak rate of 28 API crude. The zone was tested for 19 hours at an average rate of 1,199 bopd (net 600 bopd).
- Gacheta C, C1 and C2: initial testing indicates productive capacity of 300 bopd (net 150 bopd) rate of 27 API crude. The zone was tested for 14 hours at an average rate of 115 bopd (net 58 bopd). Reserves have not been assigned to this zone previously.
- Gacheta D: tested 680 bopd (net 340 bopd) peak rate of 14 API crude.
- The zone was tested for 33 hours at an average rate of 362 bopd (net 181 bopd).
Arrow said the RCE-2 well costs came in line with the budget.
Continued strong production rates from existing tied-in wells combined with the encouraging results from new drills in Columbia support its objective of achieving a production rate of 3,000 boe/d within 18 months of its AIM listing, which was completed in October 2021, it added.
The company cautioned that test results are not necessarily indicative of long-term performance or ultimate recovery.
"We are now moving the rig to our next well location, the RCS-1 well, which is expected to spud before the end of May,” Abbott continued. “Arrow's current production exceeds 1,000 boe/d (barrels of oil equivalent per day), producing positive cash flow for the company during a high commodity price environment. This is an exciting time for Arrow, and we look forward to providing further updates on our progress."
Separately, Arrow announced it will hold its 2022 annual general meeting and special meeting on July 19, 2022, at 12pm Eastern Time with a record date of June 9, 2022. It will publish a management information circular to shareholders containing the notice of the 2022 meetings no later than June 17, 2022, it added.
Arrow Exploration operates in Colombia via a branch of its 100% owned subsidiary Carrao Energy S.A., which has a portfolio of premier Colombian oil assets that are under-exploited, under-explored and offer high potential growth.
Contact the author at stephen.gunnion@proactiveinvestors.com