Arrow Exploration Corp. (AIM: AXL; TSXV: AXL) has acquired a producing oil and gas property in the Thorsby area of central Alberta, Canada, for C$12.15 million, funded entirely from existing cash.
The acquisition gives Arrow a 100% working interest in the asset, which is currently producing around 550 boepd and generated approximately C$2 million of operating income over the past 12 months.
The property carries third-party estimated reserves of 4.97 million boe proved (1P) and 7.54 million boe proved plus probable (2P), with pre-tax NPV10 values of C$38 million and C$71 million respectively.
Arrow has also identified 22 potential drilling locations across the 9,501-acre property, primarily targeting the lower Cretaceous Sparky reservoir.
Highlights
· Acquisition of 100% working interest in 550 boepd oil producing property in Thorsby, Central Alberta Canada
· Highly cash generative asset having generated $2.0 million CAD of operating income1 in last 12 months
· $12.15 million CAD (approximately $8.9 million USD) purchase price funded directly from on-hand cash reserves
· Significant 1P reserve base of 4.973 million boe, 2P of 7.537 million boe and prospective opportunities across 9,501 net acres of land
· Management plans to deploy development program across lower Cretaceous Sparky reservoir, having identified 22 low-cost, quick payout drilling locations on the property
· Current production is approximately 27% oil and liquids. 1P and 2P volumes approximately 55% oil and liquids.
Management plans to drill two-mile horizontal wells costing around C$2.2 million each, with expected initial production rates of approximately 300 barrels of oil per day.
Chief executive Marshall Abbott said the acquisition adds a low-risk development inventory, increases reserves and cash flow, and complements Arrow’s existing Colombian operations.
Despite the acquisition, Arrow said it remains debt free and intends to continue pursuing high-return opportunities in both Canada and Colombia.
