Arrow Exploration (AIM:AXL) Annual Results, MD&A & Reserves Report

2021 ANNUAL RESULTS, FILING OF AUDITED FINANCIAL STATEMENTS, MD&A AND RESERVES REPORT

Arrow Exploration Corp. (AIM: AXL ; TSXV: AXL), the high-growth operator with a portfolio of assets across key Colombian hydrocarbon basins, is pleased to announce the filing of its Annual Audited Financial Statements and MD&A for the year and quarter-ended December 31, 2021 and the filing of its 2021 year-end reserve report, which are available on SEDAR (www.sedar.com). All dollar figures are in U.S. dollars, except as otherwise noted.

Arrow Exploration’s Audited Financial Statements together with the notes related thereto, as well as Arrow’s Management’s Discussion and Analysis for the years ended December 31, 2021 and 2020, will be available shortly on Arrow’s website at www.arrowexploration.ca

FINANCIAL AND OPERATING HIGHLIGHTS

Financial and operating highlights for the quarter include the following:

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2021 YEAR-END RESERVES

Arrow has also filed, on SEDAR, the Company’s Statement of Reserves Data and Other Oil and Gas Information, Report on Reserves Data by Independent Qualified Reserves Evaluator, and Report of Management and Directors on Oil and Gas Disclosure for the year ended December 31, 2021, as required by section 2.1 of National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (together, the “Reserve Report”).

To recap, the Company’s Year-End 2021 Company Gross Reserves Highlights include:

· 3,048 Mboe of Proved Reserves (“1P Reserves”);

· 7,421 Mboe of Proved plus Probable Reserves (“2P Reserves”);

· 11,541 Mboe of Proved plus Probable plus Possible Reserves (“3P Reserves”)1;

· 1P Reserves estimated net present value before income taxes of US$29.4 million calculated at a 10% discount rate;

· 2P Reserves estimated net present value before income taxes of US$84.1 million calculated at a 10% discount rate; and

· 3P Reserves estimated net present value before income taxes of US$134 million calculated at a 10% discount rate.

Arrow refers readers to the Company’s press release of March 30, 2022 for additional details, as well as to the Reserve Report filed on SEDAR.

The Company experienced a decrease in operating netbacks during Q4 2021 as compared to Q3 2021, decreasing to $27.35/boe in Q4 2021 from $30.73/boe in Q3 2021. The decrease in operating netbacks is attributable to lower realized price for crude sales associated with the Company’s share in its Ombu/Capella block in Q4 2021.

The Company incurred capital expenditures during Q4 2021 of $2 million mainly related to its West Pepper well. At the end of Q4 2021, the Company had a positive working capital position of $8 million, and a cash position of $10.9 million.

On October 25, 2021, the Company raised approximately £8.8 million (C$15 million), through a placing and subscription for new common shares with new investors, Canacol Energy Ltd., and executive management (together, the “Fundraising”) and published an AIM Admission Document in connection with the admission of the enlarged share capital of the Company to trading on the AIM Market of the London Stock Exchange plc. The Fundraising consisted of the placement and subscription of 140,949,545 new common shares at an issue price of £0.0625 (C$0.106125) per new common share. The Company’s executive management invested approximately C$1.41 million and Canacol participated in the subscription to hold 19.9% of the enlarged share capital. Investors received one warrant for every two new common shares, exercisable at C$0.15282 per new common share for 24 months from the AIM admission date (October 25, 2021). The net proceeds of the Fundraising, together with the Company’s existing funds, are expected to be used to drill two wells at Rio Cravo Este, and will also be deployed in drilling the Carrizales Norte-1 exploration well.

On 24 November 2021, the Company also announced that it had raised C$395,375 on a non-brokered private placement basis through the issuance of 3,765,476 new common shares of no-par value (“Common Shares”) on the same terms as the Fundraising . Investors received one warrant for every two Common Shares, exercisable for 24 months from the closing date.

For further information, contact:

Arrow Exploration

Marshall Abbott, CEO

+1 403 651 5995

Joe McFarlane, CFO

+1 403 818 1033


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