Arrow Announces Exploration Well IC-2 Results

Executive Summary

• Arrow Exploration provides a material operational update on its Icaco field in Colombia, highlighting successful drilling and initial production from the Icaco-2 exploration well.
• The well encountered 100 feet of net pay across three hydrocarbon-bearing formations and is currently producing approximately 415 BOPD net at 13.4° API with a 1% water cut.
• The company maintains a $26.7 million cash balance with zero debt, advances forward drilling plans including a new horizontal well, and reports confidence in securing an extension to the Tapir block following constructive regulatory meetings.

Key Details

• Icaco-2 Well Drilling: Spud May 18, 2026; reached target depth May 26, 2026. Drilled on time and under budget to a total measured depth of 12,020 MD ft (7,399 TVD ft).
• Net Pay Encounters: 19.5 ft in Carbonera C7 formation, 6 ft in Gacheta formation, and 74.5 ft in Ubaque formation, totaling 100 ft TVD of net pay.
• Current Production (Icaco-2): Producing from the Ubaque formation at a restricted rate (35/128 choke, 37 Hz pump frequency). Output is approximately 830 BOPD gross (415 BOPD net). Oil quality is 13.4° API with a 1% water cut. Ultimate flow rate to be determined in the first few weeks of production.
• Forward Drilling Plans: IC-4HZ horizontal well targeting the Ubaque formation spud on June 13. Next target is the IC-3 vertical well (targeting C7, Gacheta, and Ubaque potential). Company is constructing five additional cellars at the Icaco pad, bringing the total to seven after IC-4HZ.
• Corporate Production Status: Total gross corporate production is approximately 5,000 boe/d. The CN-HZ12 well is offline awaiting workover (was producing ~330 BOPD gross/165 BOPD net). The Pepper gas field remains shut in due to low AECO prices (~130 boe/d), with expected restart in Q3/Q4 2026.
• Financial Position: Cash balance as of June 2, 2026, stands at US$26.7 million. The company continues to carry no debt.
• Oil Pricing: May 2026 realized prices averaged ~$97.48 US/bbl, reflecting Brent price increases due to Middle East unrest. Prices reflect deductions for Vasconia differential and logistics/transportation fees.
• Tapir Block Extension: Management reports encouraging and constructive meetings with Colombian authorities regarding the extension of the Tapir block. All required conditions are believed to be met, and management remains highly confident in approval. Colombian presidential elections are scheduled for June 21, 2026.

Notable Quotes

• Marshall Abbott, CEO: "The success of the Icaco-2 well indicates that the Icaco discovery may be material to Arrow. Future projects at Icaco are expected to include both horizontal and vertical development wells. The drilling results at Icaco so far have demonstrated 4 potential hydrocarbon bearing zones. This underlies the significant hydrocarbon density that exists in the Llanos basin and more exclusively in the Tapir Block."
• Marshall Abbott, CEO: "Arrow has spud its first horizontal well in the Ubaque Formation at the Icaco pad. Integrating multidimensional technical data supports significant flow potential in Icaco Ubaque wells. Strong netbacks and successful horizontal wells support payout occurring in months. This adds significant value and materially improves our positive balance sheet."