LONDON (ShareCast) - (Sharecast News) - Arrow Exploration updated the market on its drilling operations at the Alberta Llanos field in Colombia's Llanos Basin on Wednesday, where it holds a 50% beneficial interest.


The AIM-traded company said it had successfully brought the AB-3 well into production, confirming the multi-pool potential of the field and supporting future horizontal well development.

It said the AB-3 vertical well, drilled in January, encountered four oil-bearing sands with a total of 96 feet of oil pay.

Production from the Ubaque formation began on 24 January, with initial output of 580 barrels of oil per day gross, or 290 daily barrels net, of 13.6 degrees API oil and a 9% water cut.

The well was expected to pay out within five months.

Arrow said the AB-1 well, which resumed production after a regulatory-mandated shut-in, was currently producing 260 barrels of oil per day gross, or 130 daily barrels net.

The AB-2 well, drilled in December, encountered multiple hydrocarbon-bearing intervals but was shut in after producing sub-economic oil rates.

Arrow said it was evaluating alternatives for recompletion.

The firm's total corporate production exceeded 4,500 barrels of oil equivalent per day in January, surpassing its forecast.

It said it planned further drilling at the Alberta Llanos and Carrizales Norte fields, with horizontal wells targeting the Ubaque sands.

A second rig would be deployed in the second quarter to drill additional development wells at the RCE pad and the Alberta Llanos prospect.

The East Tapir 3D seismic acquisition programme was progressing, with data collection covering 100 square kilometres expected to be completed by the end of April.

Arrow said its cash balance as of 1 February stood at $22.7m.

It said it planned to introduce quarterly operational updates to provide more structured reporting on its expanding drilling programme and development portfolio.

"Initial production from the AB-3 well is an exciting event for Arrow, reaffirming the horizontal development potential of the Alberta Llanos field. In addition to the thick pay zone - 56 feet - encountered in the Ubaque formation, additional pay zones currently behind pipe, the C7, and Guadalupe, provide further opportunities for production and reserves increases," said chief executive officer Marshall Abbott.

"The AB-2 well was a long step out that tested the northern boundary of multiple reservoirs. It has future value as a source of information on the Alberta Llanos field, a potential future producer from two other zones or a water disposal well for the Alberta Llanos complex.

"The Alberta Llanos discovery is material to Arrow and we are looking forward to the results of horizontal wells in the field which will economically develop the Ubaque reserves."

Abbott said Arrow's corporate production additions would commence before the quarter-end once the rig mobilisation was complete on a pace of one horizontal on-stream approximately every three weeks at the Carrizales Norte pad.

"This is an integral component of our $50m board approved budget that includes drilling 23 wells in 2025.

"The East Tapir 3-D seismic program is another facet of the accretive growth to be crystalized over the coming year.

"We are excited by the potential of our low-risk portfolio in the Llanos Basin and look forward to continuing to add shareholder value via the drill bit."

At 1356 GMT, shares in Arrow Exploration were down 15.6% at 19.2p.

Reporting by Josh White for Sharecast.com.

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