Arrow Exploration Corp (TSX-V:AXL, AIM:AXL, OTC:CSTPF) has told shareholders in an operations update that following successful testing of the East Pepper well in Canada in September, the tie-in has now been completed, and production began on October 25.
In the statement, Marshall Abbott, CEO of Arrow Exploration, commented: "Arrow is extremely pleased with the results of the tie-in of the Alberta East Pepper Montney well. The East Pepper well results show the potential for the large, 100% owned, 23,000-acre Pepper land block.
"The workover program in Colombia is also progressing to plan, and we look forward to providing further updates on these wells as well as the development drilling of the RCE-3 and RCE-4 wells when updates are available."
READ: Arrow Exploration provides operations update, noting that rigs and equipment are currently moving into place for Q4 activity
"We are excited about the upcoming capital programs and we expect material production and reserve additions. The Arrow Team continues to execute our strategy to increase shareholder value," he concluded.
The company said the East Pepper tie-in flowed at an initial rate of 7.6 million cubic feet per day (mmcf/d) or approximately 1,260 barrels of oil equivalent (boe/d). The well has been choked back to produce at 6 mmcf/d or approximately 1,000 boe/d, it added, and the company expects typical production declines, while accelerated initial declines which should level off to 4%-5% per month.
In Colombia, the company said the workover program on RCS-1 and RCE-1 is progressing as expected and the company anticipates reporting on production rates in the next few weeks once the wells have cleaned-up. Meanwhile, opperations remain on track for RCE-3 to spud in December, with RCE-4 operations to follow immediately after completion of RCE-3.
After drilling RCE-3, RCE-4 and the RC water disposal well, the company said the same rig will be moved to the Carrizales Norte field. Currently Arrow is building a road and pad for the Carrizales Norte field. Drilling at Carrizales 1 & 2 is anticipated to begin in Q1 2023.
The company noted that corporate production as of October 27, 2022, is approximately 2,530 boe/d net. Total net production from the Rio Cravo field is 760 barrels of oil per day prior to any contribution from the current workover program.
The Pepper Field in Canada has been producing approximately 1,270 boe/d, comprising approximately 270 boe/d from West Pepper and approximately 1,000 boe/d from East Pepper, it added. Production at West Pepper is currently being curtailed due to third-party facility constraints. Expectations are that production will return to approximately 400 boe/d in early Q4 2022.
The two wells, along with continuing and expected robust natural gas prices in North America, are expected to further enhance the value of the Pepper field. Arrow has 23,000 acres of contiguous Montney rights in the Pepper Area.
Arrow Exploration, operating in Colombia via a branch of its 100% owned subsidiary Carrao Energy SA, has a portfolio of premier Colombian oil assets that are underexploited, under-explored and offer high potential growth. The company's business plan is to expand oil production from some of Colombia's most active basins, including the Llanos, Middle Magdalena Valley (MMV) and Putumayo Basin.
The asset base is predominantly operated with high working interests, and the Brent-linked light oil pricing exposure combines with low royalties to yield attractive potential operating margins. Arrow's 50% interest in the Tapir Block is contingent on the assignment by Ecopetrol SA of such interest to Arrow.
Contact the author at jon.hopkins@proactiveinvestors.com