Arrow Exploration (AIM:AXL) Operations Update and Mid-Year Reserves Results

Drilling success and Colombian oil prices resulted in a 164% increase in 1P NPV, 79% increase in 2P NPV and 3P NPV increased by 67%, 2P reserve replacement ratio was 219%

CALGARY, August 24, 2022 – Arrow Exploration Corp. (AIM: AXL; TSXV: AXL) (“Arrow” or the “Company”), is pleased to provide an operations update and announce the results of the 2022 mid-year reserve evaluation by Boury Energy Consultants Ltd. (“BouryGEC”) as at 30 June 2022.


· Proved (1P) Reserves:

o PDP reserves increased 25% to 1.292 MMBls mainly from the Tapir Block.

o 1P reserves also increased by 17% to 3.567 MMBls reflecting the positive results from the recent drilling campaign.

o 1P Net Present Value, before tax, discounted at 10% (“NPV-10”), is significantly higher with an increase of 164% to US$ 77.7 million.

· Proved plus Probable (2P reserves)

o 2P reserves increase to 7.864 MMBls of oil.

o NPV-10 increased to US$ 150.4 million from US$ 84.1 million as at December 31, 2021, a 79% increase.

· Proved plus Probable plus Possible (3P reserves):

o 3P reserves volume increase to 11.759 MMBls.

o NPV-10 grew 67% to US$ 223.6 million from US$ 133.9 million as at 31 December 2021.

· Oil price and new hydrocarbon accumulations resulted in positive additions in reserves in all categories.

· Additional drilling targets have been identified as a result of the H1 2022 drilling campaign. A five well program will initiate in Q4 2022 with two wells in pursuit of further low risk exploitation on the RCE structure. As well, two wells are planned to develop the Carizales Norte structure A downdip well will also be drilled at RCE to test the stratigraphic nature of the oil accumulation. This well will also serve as a water disposal well.

Operational Update

Corporate production as of August 15, 2022, is approximately 1,450 boe/d. Production from the RCE-2 well is approximately 540 bbls/d net (1,080 bbls/d gross) producing from the C7A and C7 stringer zones. Production from the RCS-1 well is approximately 190 bbls/d net (380 bbls/d gross) producing only from the new C7B zone at this time. In addition, organic growth opportunities for Arrow are advancing, with the RCE-3 and RCE-4 wells on the Tapir Block in Colombia expected to commence drilling in Q4 2022. Additional completions will be performed in Q4 on the RCE-1 and RCS-1 wells to further exploit known hydrocarbon accumulations. Current production from the RCE 1 and RCS 1 wells is ahead of forecast in aggregate.

Arrow expects to re-complete the RCE-1 well, in the C7 stringer zone. Arrow is currently just producing from the C7B zone at RCS-1 and plans to re-complete this well, expecting to open the C7A and C7 stringer zones in Q4 2022. This will have a material impact on overall RCE production.

The West Pepper well, owned 100% by Arrow and located in Canada, is producing at 240 boe/d currently, with production curtailed due to third party facility constraints. Expectations are that production will return to approximately 450 boe/d in September 2022. In Q3 2022, Arrow expects to tie-in the East Pepper gas well in Canada (100% owned by Arrow). This second well, along with continuing and expected robust natural gas prices in North America, is expected to further enhance the value of the Pepper field.

In addition to the 3D seismic survey Arrow purchased earlier this year, the Company intends to execute on a 130 square kilometer 3D seismic survey on the northwest section of the Tapir block in Colombia. This will further delineate low risk exploration fault structures that have been identified on 2-D seismic data. The shooting of this seismic survey is expected to begin in Q1 2023.

2022 Mid-year Reserves Exercise

NPV-10 values increased 164% for 1P and 79% for 2P reserves.

The recent drilling campaign in Rio Cravo (Tapir Block, Colombia) was very successful, resulting in the Company finding four more hydrocarbon accumulations and increasing its 1P oil reserves from 236 MBbls to 853 MBbls of oil. These results allow Arrow to better understand the continuity of the reservoirs in RCE and provide a foundation for the next phase of exploitation and material reserve additions at RCE.

Total Arrow reserves increased from 3.04 MMBOE to 3.56 MMBOE for 1P, and from 7.42 MMBOE to 7.86 MMBOE for 2P.

2022 Mid-Year Reserves Summary

The summary below summarizes Arrow’s reserves as of June 30, 2022, as presented in the reserves report prepared by BouryGEC, an independent qualified reserves evaluator. The figures in the following tables have been prepared in accordance with the standards contained in the most recent publication of the Canadian Oil and Gas Evaluation Handbook (the “COGEH”) and the reserve definitions contained in National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). In addition to the summary information disclosed in this announcement, more detailed information will be included in Arrow’s reserves evaluation report on certain properties as at 30 June 2022 to be filed on SEDAR ( ) and posted on Arrow’s website ( ).

Marshall Abbott, CEO of Arrow Exploration Corp., commented: “Arrow delivered an increase in volumes and values in all reserve categories. We are pleased with the results of the BouryGEC independent reserves evaluation, which reinforces the significant value of our Colombian and Canadian assets.”

Brent Crude Oil Price and AECO Gas Price Forecasts in BouryGEC Reserves Evaluation

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Exercise of Warrants and Total Voting Rights

The Company also announces that pursuant to the receipt of notices for the exercise of warrants issued in October 2021, it has issued 208,598 new common shares of no par value (“Common Shares”).

The application is being made for 208,598 new Common Shares to be admitted to trading on AIM (“Admission”). It is expected that Admission will occur on August 26, 2022. Following Admission, the Company will have 216,175,741 Common Shares in issue with voting rights and admitted to trading on AIM. This figure may be used as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to, their interest in the share capital of the Company under the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules.

For further information, contact:

Arrow Exploration

Marshall Abbott, CEO

+1 403 651 5995

Joe McFarlane, CFO

+1 403 818 1033

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