Arrow Exploration Corp. · TSXV:AXL
Arrow Exploration — Investor Presentation (February 2022)
34 slides from Arrow Exploration's investor presentation, February 2022
Slide 1: Corporate Presentation February 2022
ARROW EXPLORATION Growing & Socially-Responsible Colombia-Focused Energy Company AIM|TSXV : AXL February 2022 Corporate Presentation Unless stated otherwise, all dollar figures refer to US dollars ARROW EXPLORATION CORP. (TSXV | AIM : AXL)
Slide 2: Disclaimer
Disclaimer IMPORTANT INFORMATION The content of information contained in this presentation (the “Presentation”) has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 (“FSMA”). Reliance upon this Presentation for the purpose of engaging in any
Slide 3: Investment Overview
Investment Overview Opportunity-Rich Asset Brent-Linked Production Up to 5 Additional Wells in Base Across Two Basins in Growth: 1,200 boe/d 2022: Consistent Flow of Colombia + Canadian Up to 3,000 boe/d Within News Montney 15 Months(1) Reserves 7.0 MMboe + Pursuing Accretive Unrisked Prospective
Slide 4: Corporate Snapshot
Corporate Snapshot Market $33.6M $10.3M 213M Market Cap Cash Shares O/S Assets 1,209 BOE/D 7 MMBOE $55.60/bbl Production 2P Reserves2 2022E Colombia Field Netbacks3 Valuation 1.8x $18,804 $3.76 Price/2022E Field Cash Flow Ent. Value1/BOE 2021 Exit Production Ent. Value1/BOE 2P Reserves 1. Enterprise
Slide 5: AIM Share Performance | Share Ownership
AIM Share Performance | Share Ownership Operational Interim results update West Pepper Completion of announcement well on AIM production listing/financing Institutional 33.4% Ticker AIM|TSXV : AXL Avg. Daily Trading Volume 715,000 Retail 22.0% Recent Share Price (2-17-2022) 12.25p 52-Week Low 6.88p
Slide 6: Value-Building Catalysts
Value-Building Catalysts Opportunity for Material Growth and Resultant Share Price Re-rating 2022 2023 Complete Drill RCS-1 Drill Drill Drill Additional Shoot 3D Drill RCE-2 (formerly Drill RCE-4 Carrizales Carrizales Carrizales Zones @ Seismic named RCE-3) Norte-1 Norte-2 Norte-3 RCE-1 2022 … Plus
Slide 7: Near-Term Production Growth
Near-Term Production Growth Management Forecast Canada Capella Santa Isabel RCE Carrizales Norte Growth Highlights Q2 ‘23 3,000 • Targeting 3,000 boe/d in the near-term • Colombia: Production 2,500 growth expected to be primarily driven by Current successful drilling of additional wells at RCE 2,000
Slide 8: Seasoned Management Team
Seasoned Management Team P. Gage Jull Marshall Abbott Joe McFarlane Bob Petryk Phil Miller Max Satel Executive Chairman CEO & Director CFO Ops. Manager SVP Exploration EVP Corp. Dev. & IR • 30+ years of • 37+ years in • 27+ years in oil • 40+ years in oil • Geoscientist • 17+ years of capital leader
Slide 9: Management's Track Record of Value-Creation
Management’s Track Record of Value-Creation Company Initial Production Production at Exit (boe/d) Return to Shareholders (CAGR)1 Cougar Hydrocarbons 0 3,000 280% Equatorial Energy 0 13,000 150% Sabretooth Energy 0 1,700 100% … + 5 Others Significant value-creation achieved through successful drillin
Slide 10: Board of Directors
Board of Directors P. Gage Jull Marshall Abbott Maria Charash Grant Carnie Anthony Zaidi Ravi Sharma Executive CEO & Non-Executive Senior Non- Non-Executive Non-Executive Chairman Director Director (I) Executive Director (I) Director Director • 30+ years of • 37+ years in • 20+ years in • 35+ years
Slide 11: Colombian Oil & Gas Industry Dynamics
Colombian Oil & Gas Industry Dynamics Excellent pricing based on Brent less Vasconia Differential ($2-$5/bbl) Abundant infrastructure with spare pipeline capacity and no bottlenecks Ample export capacity including two port facilities on Caribbean coast Government very supportive of the oil and gas i
Slide 12: Asset Overview
Asset Overview Highlights Sedimentary Basins Middle Magdalena Asset Country Basin W.I. Production(3) Operator (boe/d, net) Valley 2 1. Tapir (1) Colombia Llanos 50% 137 Arrow(2) Bogota LLanos Core Assets 1 2. Oso Pardo Colombia MMV 100% 140 Arrow 4 3. Pepper Canada WCSB 100% 647 Arrow 4. Ombu Colomb
Slide 13: Tapir Block Overview
Tapir Block Overview 1 Key Characteristics … 2 … Drive Opportunities Excellent subsurface fundamentals Multiple prospects plus additional follow-up wells on success Multiple high-quality reservoir targets Type-wells can deliver initial production (IP) of over 1,300 bbls/d Typically, 3 zones per well
Slide 14: Llanos Basin
Llanos Basin Low Risk – Excellent Economics – Prolific Production Levels The Tapir Block in the Llanos is surrounded by some of the largest producers in Colombia • Parex: 46,779 boe/d • Frontera: 40,599 boe/d • GeoPark: 38,131 boe/d • Gran Tierra: 24,463 boe/d • Perenco: 21,000 boe/d Sources: Compan
Slide 15: Tapir Block Proximate Production
Tapir Block Proximate Production 38.5 MMbbls Produced • A series of oil fields lie primarily to the southeast along a similar fault trend with a combined 38.5 MMbbls produced as of the end of 2020 PAGE 14
Slide 16: Tapir Block (50% W.I.)
Current & Future Production Tapir Block (50% W.I.) Overview Tapir Block Potential Production (net to Arrow) • RCE 2020 year-end 3P reserves of 3.9 MMbbls (gross) / 1.9 MMbbls (net to Arrow’s W.I.) RCE Carrizales Norte • Producing 137 bbls/d 28 deg. API oil, net, from a single zone • Play type is wel
Slide 17: RCE Targeted Well Locations (50% W.I.)
RCE Targeted Well Locations (50% W.I.) Near-Term RCE Well Locations Future RCE Well Locations 1. RCE-2 Development Well • Potential for additional well locations • Located within same local structural culmination as RCE-1 targeting additional zones, from 2023 • Primary Objectives: C7, Gacheta & Ubaq
Slide 18: RCE-1 Well Recompletion Opportunity (50% W.I.)
RCE-1 Well Recompletion Opportunity (50% W.I.) Overview • Over 80 feet of net pay identified outside of the currently producing C7A sand • New production from upcoming appraisal wells will allow for RCE-1 to be recompleted in another zone • Three recompletion candidates have been high-graded: 1. Upp
Slide 19: Carrizales Norte Prospect (50% W.I.)
Future Production Carrizales Norte Prospect (50% W.I.) Overview Carrizales Norte Potential Production (net to Arrow) • Carrizales Field: 1,600 • Discovered by C&C Energia in 2007 with the Carrizales-1 well – led to $500 million sale of C&C. Frontera Energy is the current operator. • 24 wells have be
Slide 20: Oso Pardo Field (100% W.I.)
Current Production Oso Pardo Field (100% W.I.) Overview Oso Pardo Potential Production • Discovered in 2013 by Canacol; discovery well (Oso Pardo-1) had an IP of 200 120 bbls/d from stacked sands of the Umir formation Morsa-1 + OP-1 + OP-2 wells • 2 appraisal wells drilled in 2014; 150 ft proven oil
Slide 21: Oso Pardo Extension (100% W.I.)
Future Opportunity Not Factored Into Production Forecast Oso Pardo Extension (100% W.I.) Overview Oso Pardo Extension Potential Production Profile* • Gaffney, Cline & Associates reserve study* snapshot: GCA Cases Oil EUR/well (Mbbl) Capex ($M) Pre-Tax NPV10% ($M) Low 343 $65.5 $24.9 Best 480 $122.7
Slide 22: Canadian Montney Assets
Current & Future Production Canadian Montney Assets Overview Canadian Potential Production (Fir + W. Pepper + E. Pepper) • Low-risk, low-cost, behind-pipe natural gas discovery; production in a rising gas 1,000 3-26 West Pepper well price environment in Alberta, Canada IP (MMscf/d): 6.2 CF (Yr1)**:
Slide 23: Attractive Valuation
Attractive Valuation Firm Analyst Name Enterprise Value per Flowing Barrel ($/boe) 183,420 Stephane Foucaud Daniel Slater Christopher Jones 103,205 53,335 Average: 53,207 44,068 38,848 37,594 31,330 25,433 24,964 24,280 18,804 Touchstone Phoenix Global Petrotal Parex Gran Tierra GeoPark Frontera Can
Slide 24: ESG In Action
ESG In Action Community Program: Aguachica (Communities of Loma de Corredor and La Ye Village) Water improvement Aqueduct improvement La Ye Village School Construction plate project work Church and parish Church and parish New fitness park Road maintenance maintenance maintenance Water tanks Water t
Slide 25: Clear Path to Value Creation
Clear Path to Value Creation Drill up to Drill the 4-5 Rio high- New Resumed De- Reduced Completed Resumed Successful Cravo impact Pivot into Maximize mgmt. production leveraged Operating the sale of production financing Este wells Carrizales low-risk value of Oso Pardo Accretive team and from the t
Slide 26: Appendix
APPENDIX ARROW EXPLORATION CORP. (TSXV | AIM : AXL)
Slide 27: 2020 Year-End Reserves
2020 Year-End Reserves 12-31-2020 Price Deck Year $/bbl Brent 2021 $50.00 63,751 2022 $54.00 10,480 2023 $57.00 5,110 2024 $60.00 1,015 1,676 2025 $62.00 2026 $64.00 907 2027 $65.00 2028 $66.00 7,034 22,600 2029 $68.00 2030 $69.20 816 34,257 2031 $70.60 746 5,289 2032 $72.00 4,009 6,984 2032+ 2% 1,0
Slide 28: 2020 Reserves (Ex-Interest in Capella Field)
2020 Reserves (Ex-Interest in Capella Field) 5-31-2021 Price Deck Year $/bbl Brent 2021 $65.00 2022 $63.50 5,276 50,653 2023 $61.00 2024 $62.04 2025 $63.58 1,011 7,718 2026 $64.62 2027 $66.17 1,450 2028 $67.49 825 8,449 2029 $68.84 2030 $70.22 3,031 2031 $71.62 2,832 26,501 2032 $73.06 2032+ 2% 816
Slide 29: Management Achievements Since Taking Over in April 2020
Management Achievements Since Taking Over in April 2020 Management accepted below-market cash salaries to turn around the Company; non-executive compensation also Stabilized the Company limited. Terminated an onerous off-take contract at no cost Reduced excessive staff count in Colombia by nearly 70
Slide 30: West Pepper Well
West Pepper Well December 2021 Tie-In Stripping and Sweetening unit Pipeline installation grading Piping from Wellhead and Valve wellhead piping PAGE 29
Slide 31: Ombu Block (10% W.I.)
Non-Operated Production Ombu Block (10% W.I.) Overview • 10% working interest in the Ombu Block which contains the Capella discovery, the largest oil discovery in Colombia in the past 20+ years • Emerald Energy (Sinochem) is the operator • 2020 Year-End Arrow 2P reserves of 4.0 MMbbls of 8–11degree
Slide 32: Additional Colombian Assets
Additional Colombian Assets Overview Asset Net Acres Basin W.I. Status Operator 1. Los Picachos / Macaya 93,009 Caguan/ Putumayo 38% Force Majeure Hupecol 2. COR-39 95,111 Upper Magdalena 100% Suspended Arrow Location | Map PAGE 31
Slide 33: Committed to ESG Best Practices
Committed to ESG Best Practices Environment Committed to limiting our impact on the climate, air, land and water by adhering to the highest standards of industry operating practices; support principles included in the UN’s Sustainable Development Goals. Community Involvement Develop community partne
Slide 34: Corporate Information
1430, 333 – 11th Ave SW Calgary Alberta T2R 1L9 Marshall Abbott CEO T: 1 (403) 651 5995 E: [email protected] Joe McFarlane CFO Corporate Information T: 1 (403) 818 1033 E: [email protected] Max Satel EVP Corporate Development & Investor Relations T: 1 (416) 904 2258 E: msatel@
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