Interview with Marshall Abbott, Director & CEO of Arrow Exploration Corp.

Our previous interview: https://www.cruxinvestor.com/posts/arrow-exploration-axl-high-margin-oil-production-funds-development-1801

Recording date: 16th January 2024

Colombian Producer Poised for Breakout Growth

Arrow Exploration holds prime acreage in the oil-rich Llanos Basin of Colombia, where it has built steady production growth and proven oil well economics. After doubling 2023 output to 3,280 barrels per day, the company anticipates replicating its success in 2024. "We have doubled production from the beginning of last year to now and we feel we're on a path to double production again by the end of 2024," stated CEO Marshall Abbott.

The current production base generates robust cash flow, funding an active $45 million drilling campaign this year. Arrow will drill 15 new wells, focused on lower-risk development locations, but also testing "a couple of exciting exploration prospects." Prior 3D seismic imaging helps de-risk reservoir targets within the company's core holdings.

Most tantalizing is the shift towards horizontal drilling. Arrow has scheduled six horizontal wells in 2024, with over 1,000 barrels per day expected from each. "The technology is fabulous and geost steering is a fun part of the game," remarked Abbott. By unlocking greater contact with reservoir rock, horizontal completions translate to substantially higher recovery rates and value creation.

Underlining its financial position, Arrow held approximately $15 million in cash exiting 2023, with no debt obligations. Operating cash flow is on track to average $2.5-3 million monthly this year after royalties. The scaled-up drilling program funded through internal resources provides non-dilutive growth. Abbott stressed, "From a financial perspective we're very healthy."

Trading at just 2x cash flow, Arrow remains undervalued relative to near-term production and cash flow expansion. Once the market recognizes Colombia's high-margin barrels and Arrow's consistent execution, shares could re-rate materially higher.

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View Arrow Exploration's company profile: https://www.cruxinvestor.com/companies/arrow-exploration

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