Arrow Exploration Corp (AIM: AXL; TSXV: AXL) has reported encouraging results from three new wells at its Icaco field in Colombia, with the latest horizontal well producing at an initial rate of 1,270 barrels of oil per day (BOPD) and total gross corporate production rising above 5,000 boe/d.
The company, which holds a 50% beneficial interest in the Tapir Block in Colombia’s Llanos Basin, said the Icaco-3, Icaco-4 horizontal and Icaco-5 horizontal wells were all drilled on time and under budget.
The Icaco-5 horizontal well, which began production from the Ubaque formation on 3 August, is currently producing 1,270 BOPD gross, or 635 BOPD net to Arrow, while it continues to clean up.
The well encountered clean sandstone with average porosity of around 23% and also identified approximately 20 feet of net oil pay in the Carbonera C7 formation.
At Icaco-3, Arrow encountered a combined 50 feet of net pay, comprising 18 feet in the C7 formation, 12 feet in the Gacheta and 20 feet in the Ubaque.
Icaco-3 is currently producing from the Gacheta at a restricted rate of approximately 250 BOPD gross and 125 BOPD net, with oil quality of 25.3° API and a water cut below 1%.
Arrow said proving commercial production from the Gacheta was particularly important for assessing reserves and determining how the formation could be developed in future wells.
The Icaco-4 horizontal well initially reached a maximum rate of 799 BOPD gross before stabilising at around 150 BOPD gross. Arrow believes water ingress caused by the positioning of completion valves close to a water-bearing zone has restricted oil production and is assessing options to improve the well’s performance.
Icaco-4 also encountered approximately 23 feet of net oil pay in the C7 and 10 feet in the Gacheta formation.
With all three new wells contributing, Arrow said gross corporate production now exceeds 5,000 boe/d, despite the CN-HZ12 well currently being offline for workover operations and its Canadian Pepper gas field remaining shut in because of weak Alberta natural gas prices.
The company has constructed five additional drilling cellars at Icaco, with Icaco-6 planned as a vertical well targeting the C7, Gacheta and Ubaque formations.
Arrow also remains in a strong financial position, reporting an estimated cash balance of US$27.5 million as of 1 August and no debt.
Chief executive Marshall Abbott said the Icaco results demonstrated the commercial potential of the Gacheta and the ability of the Ubaque to produce through horizontal wells.
He added that strong netbacks and successful horizontal drilling supported well payouts occurring within months, while future development at Icaco is expected to include both horizontal and vertical wells targeting the Ubaque, Gacheta and C7 formations.
Arrow also said it remains “very confident” that an extension of the Tapir Block will be granted by Colombian authorities.
