Arrow Exploration Share Discussion Threads

[eaglehaslanded] 19/6/2024 16:41

Horizontal Well Drilling Campaign in the Llanos 34 Block In the Llanos 34 block, GeoPark drilled and completed the third horizontal well which is currently initiating production tests in the Mirador formation. This well was drilled 36% faster, with 18% lower drilling costs, and a 172% longer lateral length compared to the first horizontal well.

[mount teide] 19/6/2024 16:31

Buffy - GeoPark: some notes from my research file:

Q1/2023 - GeoPark drilled its first horizontal development well in the Tigana field.
The well was drilled within time and budget to a total depth of 13,862 feet and a horizontal lateral length of 1,270 feet/409m. The well is currently producing over 3,000 bopd with 1% water cut from the Mirador.

Q2/2023 - Spudded a second horizontal development well in the Tigana Field. The well was drilled to a total depth of 14,030 feet and a horizontal lateral length of 1,680 feet/540m. within budget and ahead of time. It was drilled 16% faster, with 10% lower drilling costs, and a 32% longer lateral length compared to the first horizontal well. It is currently under production testing.

Q3/2023 - The third horizontal development well initiated testing in early October 2023 and is currently producing approximately 1,800 bopd from the Mirador formation.
GeoPark has already spudded the fourth and fifth horizontal wells, which are expected to reach total depth in November 2023

Q4/2023 - The fourth horizontal development well initiated testing in early November and is currently producing approximately 3,450 bopd from the Mirador formation. The well was drilled faster, to a longer lateral length, and at a lower cost compared to the first three horizontal wells.

Q4/2023 Results / 17th Jan 2024 - llanos Basin: Five horizontal wells were drilled and put on production in 2023. They are currently producing 10,060 bopd gross in aggregate.

[buffythebuffoon] 19/6/2024 15:54

Was it not Geopark who increased the length by 172% from the first well?

Buffy

[eaglehaslanded] 19/6/2024 15:12

From Joe on how long the next horizontal will be:The next wells will be longer. Exact lengths will be disclosed in an upcoming RNS.

[mount teide] 19/6/2024 14:33

M3 - I would be delighted if we mirrored the leading independents horizontal well initial production performance of a stable 2,000 - 2,250 bopd gross and first year circa 20% decline rate(less than half what they're experiencing with vertical wells).

Arrow's first year average decline rate on the Tapir Block with vertical wells is circa 30%(page 23 latest presentation), followed by an expected circa 20% drop in year 2.

[moonshot3] 19/6/2024 14:09

Hi MTAny view on what rate (bopd) the horizontal will settle down to after initial flush production and what annual decline rate for the horizontal (about 30% per year on verticals) will be?Thanks.

[oakville] 19/6/2024 13:55

Arrow Exploration (AXL.V AXL.L) announced an update on operational activity at the multi horizon, Carrizales Norte field on the Tapir Block in the Llanos Basin of Colombia where Arrow holds a 50 percent beneficial interest. The company has put on production the first of four Ubaque horizontal wells planned for 2024. The first horizontal well on the Carrizales Norte "B" pad, CNB HZ-1, is exceeding expectations and is being restricted to a current flow rate of 3,150 barrels of oil per day gross with less than 1% water cut while still recovering load fluid. CNB HZ-1 was spud on May 14, 2024, and reached target depth on 8,448 feet (true vertical depth) on June 7, 2024. The well was drilled to a total measured depth of 11,680 feet with a horizontal section of approximately 2,042 feet. The pay zone is a clean sandstone exhibiting consistent 28% porosity and high resistivities, similar characteristics to those seen in previous wells. The well is flowing and has been choked back in keeping with conservative reservoir management as well as ongoing development of adequate water disposal capabilities. The rig has now been moved to the second cellar on the Carrizales Norte B Pad where the company plans to drill a dedicated water disposal well and, thereafter, Arrow expects to drill three additional horizontal wells on the B pad, followed by the Baquiano-1 exploration well, which is on trend with the Carrizales Norte field. The three follow up wells will have longer horizontal sections, which are expected to result in enhanced rate and ultimate recovery. Arrow's cash position was approximately $12.1 million on June 1, 2024…more

[pastybap] 19/6/2024 13:52

Not really. Just regurgitating the RNS. No analysis or opinion.

[cat33] 19/6/2024 13:45

Good write up from Jimhttps://oilman.beehiiv.com/p/oilman-jims-letter-june-19-2024Worth reading

[mount teide] 19/6/2024 13:18

RA - indeed - this was very much the experience of the two leading independents who commenced 'Proof of Concept' Horizontal Well Drilling in the Llanos Basin during 2022-2023.....after 2-3 wells they had perfected the drilling performance to deliver production results that averaged between 3-5 times the production rate of vertical wells on the same field but, with much slower decline rates.

[royalalbert] 19/6/2024 13:09

MT should also take into account this was Arrows first HZ well from which an awful lot will have been learnt. This I presume is the reason for the statement regarding longer horizontal sections in the subsequent wells.

[mount teide] 19/6/2024 12:34

Today's news has massively increased the cash generating potential of Arrow's business and by implication hugely strengthened the investment case.

Last year the company doubled production by drilling 11 vertical wells all funded from cash flow and, ended the year with the same net cash position....achieved at an average Brent price of $82.49/bbl.

However, the CNB-HZ-1 horizontal well is currently producing at a restricted net 4.63 times the modelled performance of adjacent vertical wells on the field(and 6.3 times their subsequent average net production) while costing just a net $1m more to drill!

This is not an incremental improvement but a huge step change increase in what was already a compelling investment case - as demonstrated by last year's self funded doubling of production from the very good but, much lower relative performance of vertical wells.

Plus, if the experience of Arrow's two leading independent Llanos Basin peers is a reliable guide, not only will Arrow get the benefit of a huge increase in production and cash flow from horizontal wells but, a highly material reduction in the field decline rate, enabling the company to potentially book a significant increase in P2 reserves for the field.

Parex Resources, the largest independent acreage holder in Colombia, secured all the remaining licenses surrounding Arrow's primely located Llanos Basin Tapir Block in an off market deal during the last Colombian O&G auction - as a consequence, you could bet money that with a circa $350m - $400m production development budget for 2024, Parex will be watching Arrow's Tapir Block horizontal drilling performance more like a hawk than the eye of a fellow Colombian producer.

AIMHO/DYOR

ps: This is the icing on the cake - "The three follow up wells will have longer horizontal sections, which are expected to result in enhanced rate and ultimate recovery." Exactly the results that the two leading independents experienced.

[royalalbert] 19/6/2024 12:17

Been out and about since crack of dawn, nice RNS and hopefully the start of an upward cycle. Cash position is very good considering money spent, I'm happy and so should a few others.

[mount teide] 19/6/2024 11:55

'Already traded above 5 million shares and only 15% up, a bit strange. It should be higher after this de risked news. Flow was excellent.'

Observation of today's transaction history/L2 suggests there is a decent size seller around happy to take low 20's in volume for stock.

[rockyride] 19/6/2024 11:43

I wonder if this means that the taps could be opened up a bit more when the water disposal well is fully operational?-The well is flowing and has been choked back in keeping with conservative reservoir management as well as ongoing development of adequate water disposal capabilities.-

[eaglehaslanded] 19/6/2024 11:38

Already traded above 5 million shares and only 15% up, a bit strange. It should be higher after this de risked news. Flow was excellent.

[dunns_river_falls] 19/6/2024 11:18

It feels like this is a massive derisking moment. If the market does not rate this fairly then it will become a takeover target sooner than we might like.

The cashflow once all the horizontals are in place and the water issues sorted will be phenomenal. $200m annualised revenue is not that far away.

Just add in a sprinkling of success (imagining another discovery of similar scale to Ubaque) at Baquiano or Mateguafa Attic and it could be a stunning 2nd half of the year

Also remember the HZ production profile chart from the Apr presentation. These wells can still produce at 300BOPD+ after 10 years!

[ashkv] 19/6/2024 11:16

Q1 2024 Average Production 2730 Boed of which 250 boe/d unprofitable Canada Gas is currently shut-in!!! Rest water management curtailment - I estimate 2800-3000 boe/d without the water constraints not including the newly online horizontal production.

RockyRide19 Jun '24 - 10:42 - 8336 of 8339
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I must compliment the company on such a holistic RNS, bit scary we’d be at 2,100kboepd ATM though without this amazing result.

[mount teide] 19/6/2024 10:59

RR- Much of your 2,100 bopd estimate of current production excluding CNB-HZ-1, is overwhelmingly the result of action taken to highly restrict(temporarily) some production, to facilitate the implementation of a long term solution to the water disposal issue - and is likely to be resolved within 2-4 weeks.

[cashandcard] 19/6/2024 10:54

Excellent result here folks. Intrigued by the forward strategy given how productive these onshore HZ wells could be longter. That's a sizable production business developing right there. Cash

[hierarch] 19/6/2024 10:46

Only due to production constraints however. We can therefore expect a double whammy once the curtailed production becomes unrestricted by water handling constraints upon drilling of the new water well and the subsequent 2nd horizontal.I'm anticipating a very strong set of production numbers on announcement of the 2nd horizontal. Can't see this being fairly valued sub 30p once the water handling is sorted imminently and the 2nd horizontal comes in (potentially at higher rates as inferred by the RNS today)

[rockyride] 19/6/2024 10:42

I must compliment the company on such a holistic RNS, bit scary we'd be at 2,100kboepd ATM though without this amazing result.

[11_percent] 19/6/2024 10:36

Yup.....bring on the MA interview.

[dicko80] 19/6/2024 10:36

Cracking result, well done all

note c25days to complete drilling for future HZ as a guide 👍