Arrow Announces Q2 2025 Interim Results

Executive Summary

• Arrow Exploration Corp. released its Interim Condensed Unaudited Consolidated Financial Statements and MD&A for the three and six months ended June 30, 2025, reporting a 48% year-over-year increase in average corporate production and a 5% increase in net oil and natural gas revenue.
• The company entered into a $20 million prepayment agreement with an integrated energy company and completed a $3 million 3D seismic program and $2 million in road/pad infrastructure investments during the quarter.
• Current production stands at approximately 4,200 boe/d, with plans to drill an exploration well at Mateguafa Oeste in Q3 2025 and potentially four additional horizontal wells if successful, against a total 2025 capital budget of ~$50 million.

Key Details

• Financial Performance (Q2 2025 vs Q2 2024):
  • Total oil and natural gas revenue, net of royalties: $15.9 million (up 5% from $15.1 million).
  • Net income (loss): $(934,735) for Q2; Net income of $1.7 million for YTD 2025 (up from $1.2 million YTD 2024).
  • Adjusted EBITDA: $6.3 million for Q2; $17.8 million for YTD 2025.
  • Funds flow from operations: $4.0 million for Q2; $13.7 million for YTD 2025.
  • Cash position: $13.2 million at end of Q2 2025.
  • YTD Operating Cashflows: $13.9 million.
• Operational Highlights:
  • Average corporate production: 3,768 boe/d in Q2 2025 (vs. 2,546 boe/d in Q2 2024), a 48% increase.
  • Realized corporate oil operating netbacks: $27.36/bbl.
  • Drilled five additional development wells in Alberta Llanos (AB), Carrizales Norte (CN), and Rio Cravo Este (RCE) fields in the Tapir block.
  • Spud RCE HZ10 in Q2; brought RCE HZ-10, CN HZ12, and AB HZ5 on production post-period.
  • Current production: ~4,200 boe/d, with CN HZ13 and AB3 recompletion expected in next two weeks.
• Capital Expenditures & Infrastructure:
  • Invested $2 million in road and pad infrastructure from CN to Mateguafa Attic.
  • Completed 90 sq km 3D seismic program over southern Tapir block for $3 million.
  • Paid $0.8 million for trucking water; invested $1.7 million in water disposal infrastructure (conversion/stimulation of AB-2, CN-4, CN-5 wells).
  • Tapir block water disposal capability now exceeds 130,000 barrels per day.
• Financing:
  • Entered into a $20 million prepayment agreement with an integrated energy company.
• Future Plans & Strategy:
  • 2025 Budgeted Capital Expenditure: ~$50 million (net to Arrow); $24 million spent in H1 2025.
  • Operating one rig; dismissed second rig.
  • Spud CN HZ 13 well, expected on production early September.
  • Next major step: Drill first exploration well at Mateguafa Oeste in Q3. If successful, plan to drill four additional horizontal wells. If unsuccessful, move rig to Mateguafa Attic to drill three low-risk vertical wells targeting C7.
  • Discussions with authorities regarding Tapir block extension are progressing well; requirements considered met.
  • Discussions ongoing with regulatory bodies on termination of COR-39 Block licence obligations.
• Production Breakdown (Q2 2025):
  • Crude oil: 3,493 bbl/d.
  • Natural gas: 1,587 Mcf/d.
  • NGLs: 10 bbl/d.
  • Total: 3,768 boe/d.
• Price Environment:
  • Brent benchmark: $69.80/bbl (down 16% from $83.00 in Q2 2024).
  • Realized crude oil price: $56.87/bbl (down 22% from $72.99).
  • Corporate average realized price: $53.33/boe (down 23% from $69.39).

Notable Quotes

• Marshall Abbott, CEO: "The second quarter of 2025 has been very busy for Arrow. The two horizontal development wells at Alberta Llanos have highlighted the potential for horizontal development in the Ubaque in other areas of the Tapir block. The Company plans to further test this potential with an exploration well at Mateguafa Oeste in Q3 and is putting the infrastructure in place for exploration wells at Mateguafa Attic, Capullo and Icaco, all of which could have a material impact on the Company."
• Marshall Abbott, CEO: "The focus for the remainder of 2025 will be to explore low risk new prospects in the Tapir block, starting with Mateguafa Oeste, which has the potential to be larger than the Carrizales Norte field. The pad and cellars for Mateguafa Oeste have been completed and the first well is expected to be spud in late Q3. Arrow looks forward to updating the market post drilling the first well at Mateguafa Oeste."