A flash blog today as I’m in town, as always more if appropriate.

Arrow Exploration

Arrow has provided an update on operational activity at the Icaco field on the Tapir Block in the Llanos Basin of Colombia where Arrow holds a 50 percent beneficial interest.

Icaco-2 Well

The Icaco 2 exploration well (IC-2) was spud May 18, 2026, and reached target depth on May 26, 2026.  The IC-2 well was drilled, on time and under budget, to a total measured depth of 12,020 MD feet (Measured Depth), or 7,399 TVD feet (True Vertical Depth) and encountered multiple hydrocarbon-bearing intervals.

Log analysis shows 19.5 feet of net pay in the Carbonera C7 formation, 6 feet of net pay in the Gacheta formation and 74.5 feet of net pay in the Ubaque formation, for a total net pay of 100 feet TVD (True Vertical Depth).

The well is currently producing from the Ubaque formation, at a restricted rate, 35/128 choke and 37 Hz pump frequency, of approximately 830 BOPD gross (415 BOPD net). The oil quality is 13.4° API and there is a 1% water cut.

The ultimate flow rate will be determined in the first few weeks of production.

Initial production results are not necessarily indicative of long-term performance or ultimate recovery.

Forward Drilling Plans

The IC-4HZ well targeting the Ubaque was spud on June 13.  Afterwards, the rig will move to drill the IC-3 vertical well targeting which has C7, Gacheta and Ubaque potential.  The Company is constructing five additional cellars at the Icaco pad for a total of 7 additional cellars after IC-4HZ.

Production

Including the restricted production from the IC-2 well, total gross corporate production is approximately 5,000 boe/d. Currently the CN-HZ12 well is offline waiting on a workover. The well was producing approximately 330 BOPD gross (165 BOPD net) when it was shut in. Arrow has continued to shut in the Pepper gas field due to low natural gas prices in Alberta, which was producing approximately 130 boe/d when it was shut in. The Company believes that AECO gas prices will improve in the third and fourth quarter of 2026 once the region moves into the winter months. At that time the Pepper field is expected to be brought back on production.

Prices

During May 2026, Arrow oil field realized prices averaged approximately $97.48 US/barrel, which reflects the increase in Brent oil prices experienced by the unrest in the Middle East.  Field prices reflect the deduction of the Vasconia differential and logistics fees (mostly transportation and quality differential).

Cash Balance

As of June 2, 2026, the Company’s estimated cash balance is US$26.7 million.  The Company continues to have no debt.

Tapir Extension

Arrow and its partner in the Tapir block have recently had encouraging meetings with Colombian authorities on the extension of the Tapir block.  To date the dialog has been very constructive.  Arrow believes that all conditions required for the extension to be granted have been met and management remains very confident that the extension will be granted.  The Company will continue to update the market on developments as they occur.  Colombian elections are also taking place this month and it is expected the next President of Colombia will be chosen on June 21, 2026.

Marshall Abbott, CEO of Arrow commented:

“The success of the Icaco-2 well indicates that the Icaco discovery may be material to Arrow.  Future projects at Icaco are expected to include both horizontal and vertical development wells.  The drilling results at Icaco so far have demonstrated four potential hydrocarbon bearing zones. This underlies the significant hydrocarbon density that exists in the Llanos basin and more exclusively in the Tapir Block.”

“Arrow has spud its first horizontal well in the Ubaque Formation at the Icaco pad. Integrating multidimensional technical data supports significant flow potential in Icaco Ubaque wells. Strong netbacks and successful horizontal wells support payout occurring in months. This adds significant value and materially improves our positive balance sheet. We look forward to updating our shareholders on the progress at Icaco over the coming months.”

Yet more good news from Arrow who announce results from the IC-2 vertical well that were much better than even the encouraging IC-1 well and perhaps more importantly at the high end of management expectations.

As it was a significant two kilometre step-out to the North it can be read that the structure may indeed be substantially at the top end of its early potential and thus de-risks the play by some serious amount. The IC-4HZ well has been spudded and I like the fact that it is a horizontal well targeting the Ubaque and that they will drill another vertical after that, itself targeting the C7, Gacheta and Ubaque potential. 

So things are looking even better than I had previously thought, with five more cellars under construction at the Icaco pad for a total of 7 additional cellars after the IC-4HZ well which shows significant confidence in the play.

The shares are up again this morning and still have substantial appreciation ahead of them after this excellent news. I remain confident that my 50p target price is not by any means optimistic and should the Icaco campaign continue with its huge success could actually prove to be conservative, accordingly Arrow will remain in the Bucket List at the interim review without any doubt. 

And finally…

It’s Super Wednesday with opportunities for much sport watching for fans today…

After a very long wait England kick off their World Cup campaign against a strong Croatia team tonight, maybe best to get the hardest group game first…

The second test match starts at The Oval today, England are a much changed side after indiscipline took Stokes and Gus out of the equation whilst Robinson broke down after just one match, the spinner has been dispensed with and the keeper’s wife has had a baby meaning that Jamie is on nappy changing duties today. So see Rew, Baker, Archer, Fisher are in some for test debuts…

And Royal Ascot continues and after an exciting St James’s Palace stakes yesterday there are more exceptional contests on the card today.