Arrow Exploration (AXL ) updated markets today on its Canadian and Columbian operations.
In Canada, the company confirmed a successful tie-in of its East Pepper well, following testing in September. Arrow said production began on October 25 with an initial rate of 7.6 mmcf/d or c. 1,260 boe/d. The well has since been choked back to 6 mmcf/d or c. 1,000 boe/d. Arrow expects typical production declines that should level off to 4-5% per month.
In Colombia, Arrow said the workover program on RCS-1 and RCE-1 was progressing as expected. The company anticipates reporting on production rates within the next several weeks once wells have cleaned up.
Regarding RCE-3 and RCE-4, Arrow said operations remained on track for RCE-3 to spud in December, with RCE-4 operations to follow immediately after. After drilling RCE-3, RCE-4, and the RC water disposal well, the same rig will be moved to the Carrizales Norte field, Arrow explained.
Currently Arrow is building a road and pad for the Carrizales Norte field, with drilling at Carrizales 1 and 2 anticipated to begin in Q1 2023.
Corporate Production
Arrow's corporate production was approx. 2,530 boe/d net as of October 27. Net production from the Rio Carvo field was 760 bopd prior to any contribution from the current workover program.
The Pepper Field has been outputting 1,270 boe/d, comprising of c. 270 boe/d from West Pepper and 1,000 boe/d from East Pepper. Arrow said production at West Pepper had been temporarily curtailed due to 3rd party facility constraints, and was expected to return to 400 boe/d in early Q4 2022.
View from Vox
With the successful tie-in and commencement of production at East Pepper, Arrow has added 1,000 boe/d to its corporate production, representing a 65% increase. With continuing robust natural gas prices in North America, the two operational wells underpin the potential of Arrow's 100%-owned 23,000-acre contiguous concession in the Pepper area of Alberta.
Arrow's workover operations in Colombia are also progressing well. Investors should be aware of several key events expected in the next few months, including a production rates report, development drilling at RCE-3 and RCE-4 beginning in December, as well as drilling at Carrizales 1 and 2 in Q1 2023.
Investors cheered today's announcement on East Pepper, sending AXL shares up 7.7%. Arrow's ongoing capital programs should boost production further in the near to medium term.
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