Arrow Announces Q2 2025 Interim Results

(MENAFN- Newsfile Corp) Calgary, Alberta--(Newsfile Corp. - August 28, 2025) - Arrow Exploration Corp. (AIM: AXL) (TSXV: AXL) (" Arrow " or the " Company "), the high-growth operator with a portfolio of assets across key Colombian hydrocarbon basins, is pleased to announce the filing of its Interim Condensed (unaudited) Consolidated Financial Statements and Management's Discussion and Analysis ("MD&A") for the three and six months ended June 30, 2025, which are available on SEDAR ( ) and will also be available shortly on Arrow's website at .

Q2 2025 Highlights:

• Average corporate production of 3,768 boe/d (Q2 2024: 2,546 boe/d), representing a 48% increase when compared to the same period in 2024.

• Recorded $15.9 million of total oil and natural gas revenue, net of royalties, representing a 5% increase when compared to the same period in 2024 (Q2 2024: $15.1 million).

• Realized corporate oil operating netbacks⁽¹⁾ of $27.36/bbl.

• Cash position of $13.2 million at the end of Q2 2025.

• YTD generated operating cashflows of $13.9 million (YTD 2024: $18.9 million).

• Drilled five (5) additional development wells in the Alberta Llanos (AB), Carrizales Norte (CN) and Rio Cravo Este (RCE) fields in the Tapir block. RCE HZ10 was also spud in Q2.

• Invested in road and pad infrastructure from CN to Mateguafa Attic at a net cost of $2 million to the Company

• Completed acquisition and processing of a 90 square km 3D seismic program over the southern part of the Tapir block at a cost of $3 million.

• Entered into a $20 million prepayment agreement with an integrated energy company.

• Net YTD income of $1.7 million (YTD 2024 $1.2 million)

⁽¹⁾Non-IFRS measures - see "Non-IFRS Measures" section within the MD&A

Post Period End Highlights:

• Spud the first horizontal well, RCE HZ-10, in the Rio Cravo Este (RCE) field in the Tapir block.

• RCE HZ-10, CN HZ12 and AB HZ5 were brought on production.

Current Production

The Company is currently producing approximately 4,200 boe/d with two additional wells expected to be brought on production in the next two weeks, CN HZ13 targeting the Ubaque formation and a recompletion at AB3 targeting the C7 formation.

Tapir Water Disposal Infrastructure

In Q2, the Company paid $0.8 million on trucking water. During Q2 the Company invested significantly in water disposal infrastructure, of which $1.7 million is included in operating costs for the quarter. This investment includes conversion work and stimulation of the AB-2, CN-4 and CN-5 water disposal wells. The water handling infrastructure is now operational and expected to deliver a significant reduction in water handling costs and support higher production rates. The Tapir block water disposal capability is now over 130,000 barrels of water per day. With the water handling infrastructure in place, the Company is turning up production in current wells.

Tapir Extension and COR-39 Block

The Company is engaged in continuing discussions with authorities on the Tapir block extension. Arrow considers that all requirements for the extension have been met. Furthermore, the Company is in discussions with regulatory bodies on the termination of COR-39 Block licence obligations. Discussions with authorities are going well and Arrow will keep the market updated in future releases.

Upcoming Drilling

At this time, Arrow is operating one rig and has dismissed the second rig. The Company has spud the CN HZ 13 well, which is expected to be on production in the beginning of September. Thereafter, the Company expects to drill its first exploration well at Mateguafa Oeste. If the vertical exploration well at Mateguafa Oeste is successful, the Company plans to drill four additional horizonal wells on the prospect. If the Mateguafa Oeste 1 well is not successful, the rig will move to Mateguafa Attic to drill three low risk vertical wells targeting the C7. The Company has the option to engage a second rig to drill the other prospects if Mateguafa Oeste 1 is successful. The total budgeted capital expenditure planned for 2025 is approximately $50 million, net to Arrow, of which $24 million was spent in H1 2025.

Marshall Abbott, CEO of Arrow Exploration Corp., commented:

"The second quarter of 2025 has been very busy for Arrow. The two horizontal development wells at Alberta Llanos have highlighted the potential for horizontal development in the Ubaque in other areas of the Tapir block. The Company plans to further test this potential with an exploration well at Mateguafa Oeste in Q3 and is putting the infrastructure in place for exploration wells at Mateguafa Attic, Capullo and Icaco, all of which could have a material impact on the Company."

"The Company continues to work with regulatory authorities on the extension of the Tapir block. The Company considers it has met all of the requirements for an extension and discussions with regulatory officials continue to progress."

"In Q2, Arrow made large investments in the future drilling programs of the Company. The Tapir South 3D seismic program was completed during the quarter, at a net cost of $3 million, showing additional prospects and drilling opportunities. The Company is expected to test one of these prospects, Icaco, in early 2026. During Q2 the company also completed the road joining the CN pad with the Mateguafa Oeste, Capullo and Mateguafa Attic prospects at a net cost of approximately $2 million."

"The focus for the remainder of 2025 will be to explore low risk new prospects in the Tapir block, starting with Mateguafa Oeste, which has the potential to be larger than the Carrizales Norte field. The pad and cellars for Mateguafa Oeste have been completed and the first well is expected to be spud in late Q3. Arrow looks forward to updating the market post drilling the first well at Mateguafa Oeste."

FINANCIAL AND OPERATING HIGHLIGHTS

(in United States dollars, except as otherwise noted)			Three months ended June 30, 2025			Six months ended June 30, 2025			Three months ended June 30, 2024
Total natural gas and crude oil revenues, net of royalties			15,868,938			35,375,063			15,146,366
Funds flow from operations (1)			3,994,525			13,740,079			6,655,696
Funds flow from operations (1) per share -
Basic($)			0.01			0.05			0.02
Diluted ($)			0.01			0.05			0.02
Net income (loss)			(934,735	)		1,729,029			1,247,825
Net income (loss) per share -
Basic ($)			(0.00	)		0.01			0.00
Diluted ($)			(0.00	)		0.01			0.00
Adjusted EBITDA (1)			6,269,979			17,801,527			8,884,099
Weighted average shares outstanding -
Basic ($)			285,864,348			285,864,348			285,864,348
Diluted ($)			295,209,883			294,655,197			292,536,147
Common shares end of period			285,864,348			285,864,348			285,864,348
Capital expenditures			14,771,206			26,150,386			8,965,408
Cash and cash equivalents			13,212,417			13,212,417			10,826,380
Current Assets			20,213,917			20,213,917			19,975,633
Current liabilities			19,820,706			19,820,706			13,318,516
Adjusted working capital (1)			393,211			393,211			6,657,117
Long-term portion of restricted cash (2)			154,849			154,849			174,190
Total assets			92,729,950			92,729,950			67,864,633
Operating
Natural gas and crude oil production, before royalties
Natural gas (Mcf/d)			1,587			1,718			926
Natural gas liquids (bbl/d)			10			8			4
Crude oil (bbl/d)			3,493			3,631			2,387
Total (boe/d)			3,768			3,925			2,546
Operating netbacks ($/boe) (1)
Natural gas ($/Mcf)			($1.45	)		($1.21	)		($1.25	)
Crude oil ($/bbl)		$	30.08		$	36.42		$	54.54
Total ($/boe)		$	27.36		$	33.24		$	51.21

DISCUSSION OF OPERATING RESULTS

During Q2 2025, the Company's production has decreased due to natural declines and increasing water cuts across its fields in the Tapir block. Production growth is expected to resume since the Company has developed water handling capacity and executes on the 2025 budget. Nevertheless, the Company has maintained good operating results and healthy EBITDA.

Average Production by Property

Average Production Boe/d	Q2 2025	Q1 2025	FY 2024	Q4 2024	Q3 2024	Q2 2024	Q1 2024
Oso Pardo	131	126	153	154	180	113	166
Ombu (Capella)	-	-	-	-	-	-	-
Rio Cravo Este (Tapir)	996	1,118	1,294	1,178	1,078	1,283	1,644
Carrizales Norte (Tapir)	2,070	2,321	1,897	3,153	2,784	991	622
Alberta Llanos	296	205	7	26	-	-	-
Total Colombia	3,493	3,770	3,351	4,511	4,042	2,387	2,432
Fir, Alberta	100	105	81	88	82	77	78
Pepper, Alberta	170	210	110	139	-	82	220
Keho, Alberta	5	-	-	-	-	-	-
TOTAL (Boe/d)	3,768	4,085	3,542	4,738	4,124	2,546	2,730

The Company's average production for the three months ended June 30, 2025 was 3,768 boe/d which consisted of crude oil production in Colombia of 3,493 bbl/d, natural gas production of 1,587 Mcf/d, and minor amounts of natural gas liquids. The Company's Q2 2025 production was 48% higher than its Q2 2024 production and 7% lower than Q1 2025 due to natural declines and water handling capacity.

DISCUSSION OF FINANCIAL RESULTS

During Q2 2025 the Company experienced a reduction in both crude oil and gas prices, as summarized below:

		Three months ended June 30
	2025			2024			Change
Benchmark Prices
AECO (C$/Mcf)	$	1.72		$	1.20			43%
Brent ($/bbl)	$	69.80		$	83.00			(16%)
West Texas Intermediate ($/bbl)	$	63.70		$	80.55			(21%)
Realized Prices
Natural gas, net of transportation ($/Mcf)	$	1.27		$	0.94			35%
Natural gas liquids ($/bbl)	$	51.76		$	69.96			(26%)
Crude oil, net of transportation ($/bbl)	$	56.87		$	72.99			(22%)
Corporate average, net of transport ($/boe) (1)	$	53.33		$	69.39			(23%)

OPERATING NETBACKS

The Company also continued to realize good oil operating netbacks, as summarized below:

		Three months ended June 30
		2025			2024
Natural Gas ($/Mcf)
Revenue, net of transportation expense	$	1.27		$	0.94
Royalties		($0.10	)	$	0.23
Operating expenses		($2.61	)		($2.42	)
Natural Gas operating netback (1)		($1.44	)		($1.25	)
Crude oil ($/bbl)
Revenue, net of transportation expense	$	56.87		$	72.99
Royalties		($6.63	)		($8.73	)
Operating expenses		($20.17	)		($9.72	)
Crude Oil operating netback (1)	$	30.07		$	54.54
Corporate ($/boe)
Revenue, net of transportation expense	$	53.33		$	69.39
Royalties		($6.18	)		($8.17	)
Operating expenses		($19.79	)		($10.01	)
Corporate Operating netback (1)	$	27.36		$	51.21
(1)Non-IFRS measure

The operating netbacks of the Company have been affected in 2025 due to increased water production from its Colombian assets and decreased crude oil prices. During Q2 2025, the Company incurred $15 million of capital expenditure, primarily in connection with the drilling of additional development wells in the Tapir block. This tempo is expected to continue during the remainder of 2025, funded by cash on hand and cashflow.

For further Information, contact:

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