Arrow Exploration Corp. Announces Closing the Partial Working Interest Sale in the VMM-2 Block and Provides Operational Update

Source Press Release
Company Arrow Exploration Corp. 
Tags Asset Deals, Deals, Upstream Activities
Date December 17, 2018

ARROW Exploration Corp. (operating in Colombia via a Colombian branch of its 100% owned subsidiary, Carrao Energy S.A.) (“Arrow” or the “Company”) (TSXV: AXL) is pleased to announce it has closed on the previously announcedsale of both a 20% working interest in the Shallow Section (defined below) and a 46.9% working interest in the Deeper Section (defined below) in the VMM-2 Block located in the Middle Magdalena Basin in Colombia for the sum of US $5 million, subject to adjustments (the “Transaction”). The Transaction provides an important boost to Arrow's financial flexibility while retaining exposure to results of an expected capital program on the VMM-2 Block in 2019. The Effective Date of the Transaction is December 1st, 2018.

Arrow will retain a 20% working interest in both the Shallow Section and the Deeper Section in the VMM-2 Block. The formal transfer of legal ownership of the working interests pursuant to the Transaction is subject to ultimate approval by the Agencia Nacional de Hidrocarburos (“ANH”).

For purposes of this press release, the Shallow Section in the VMM-2 Block is defined as the portion of the VMM-2 contract area at a depth greater than 150ft above the top of the “La Luna” formation, and the Deeper Section is defined as the portion of the contract area below the Shallow Section.

Management estimates production sold as a result of the Transaction is approximately 85 barrels of oil per day (“bbl/d”) which equates to approximately US$59,000 per flowing barrel. Gary Wine, President & CEO of Arrow commented, “We’re pleased to close the working interest sale on VMM-2 for US $5 million. Proceeds from the sale will be used to fund our 10-well workover program currently underway which we expect will add approximately 1,000 bbl/d on a risked basis, including approximately 100 bbl/d at VMM-2 replacing soldproduction. This non- dilutive Transaction efficiently converts assets to cash flow and right-sizes our working interest in the VMM-2 Block to a level we’re comfortable participating at moving forward.”

Production, Operations and Credit Facility Update

Arrow’s current production is approximately 2,300 boe/d from 1,400 boe/d prior to Danes-1being tied-into the Company’s 100% owned production facilities at Pointer.

Operations recently commenced on the first well of a planned 10-well workover program which is expected to be conducted over the next 10 weeks. The program consists of: four recompletions and one pump change on Arrow’s 100% owned LLA-23 Block in the Llanos Basin, one pump change on Arrow’s 100% owned Santa Isabel Block in the Middle Magdalena Basin, and four workovers on the VMM-2 Block in the Middle Magdalena Basin where Arrow owns a 20% WI. In aggregate, Arrow expects this workover program to add approximately 1,000 bbl/d to corporate production on a risked basis.

Lastly, Arrow is currently in the final phase of due diligence for a US $25 million credit facility which is expected to close in January, 2019.

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd