Mr. Marshall Abbott reports

ARROW ANNOUNCES CN-1 RESULTS EXCEED EXPECTATIONS AND OPERATIONS UPDATE

Arrow Exploration Corp. has provided an update on the operational activity at the Carrizales Norte (CN) field on the Tapir block in the Llanos basin of Colombia, where Arrow holds a 50-per-cent beneficial interest.

CN-1

The CN-1 well was spudded on May 1, 2023, and reached target depth on May 11, 2023. CN-1 was the first well drilled into the CN field, and results from this well have confirmed the productive potential of the multipool field. The well was drilled to a total measured depth of 9,190 feet (8,511 feet true vertical depth) and encountered multiple hydrocarbon-bearing intervals.

Arrow has completed the final test on the CN-1 well in the C7 formation, which has approximately 26 feet of net oil pay. The pay zone is a clean sandstone exhibiting consistent 30-per-cent porosity and high resistivities. An electric submersible pump (ESP) has been inserted in the well after perforating.

Specific data for the production test on the C7 formation are as follows:

• The production test took place over a 62-hour period.
• The well was tested at three different flow rates to evaluate productivity and to plan for water cut management. The first flow period was held for 12 hours and showed an average oil rate of 662 barrels of oil per day gross.
• The second flow period was for 32 hours and showed an average oil rate of 902 barrels of oil per day gross.
• The third flow period was held for 17 hours and showed an average oil rate of 1,134 barrels of oil per day gross.
• Oil production tested at a peak rate of 1,272 barrels of oil per day and a final stabilized rate of 1,134 barrels of oil per day gross.

In the final 24 hours of the test, CN-1 produced at a rate of 1,103 barrels of oil per day gross (552 barrels of oil per day net) of oil at 33.5-degree API and with a 12-per-cent water cut (completion fluid and formation water). The production test utilized running the ESP at 30 hertz, the lowest setting on the pump. In addition, a 28/128 choke was inserted to efficiently manage the reservoir. Water cut decreased throughout completion testing. The CN-1 well is currently on production, producing from the C7 formation at 1,100 barrels of oil per day gross (550 barrels of oil per day net). The testing results indicate the well is capable of higher rates and 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.

CN-2

The CN-2 well was spudded on June 15, 2023. The drilling, testing and completion of the well are expected to take three weeks. CN-3 will be drilled immediately upon completion of the CN-2 well.

Operations update

Production

Incorporating CN-1, total corporate production is between 2,700 barrels of oil equivalent per day and 2,900 barrels of oil equivalent per day. The Capella field, in which Arrow has a 10-per-cent non-operated interest, remains shut in due to continuing protests. There is currently no timeline for when the field will begin production. The lost production is approximately 280 barrels of oil per day to 300 barrels of oil per day net to Arrow.

Coming drilling

After the CN-3 well is completed, the rig will move to the Rio Cravo Este (RCE) field to drill two dedicated Gacheta wells, RCE-6 and RCE-7. A third well, Rio Cravo Sur-2 (RCS), is also expected to be drilled at that time targeting the C7 formation.

Following completion of the RCE and RCS wells, the rig will move back to the CN field where low-risk infill drilling is expected to begin before the end of 2023.

West Tapir 3-D seismic program

The West Tapir 3-D seismic acquisition program was completed on April 10, 2023. Processing has been completed and management is currently analyzing results and determining the location of future drilling prospects.

In late fall 2023, Arrow plans a second 3-D acquisition program in the southern part of the Tapir block. The program is expected to cover a 90-square-kilometre area, where 2-D seismic has highlighted a large lead.

Cash balance

On June 1, 2023, the company's cash balance was $11.2-million (U.S.).

Marshall Abbott, chief executive officer of Arrow, commented: "Initial production from the CN-1 well has exceeded expectations and is an exciting event for Arrow. In addition to the thick pay zones encountered on the Carbonera C7 formation, additional pay zones currently behind pipe provide further opportunities for production and reserve increases. This includes the successful production testing of the Ubaque formation that produced at over 1,200 barrels of oil per day gross.

"The company is looking forward to the CN-2 and CN-3 results, which will further develop the exploration discoveries and help determine the size of the pools in the field and the potential reserve additions. Arrow plans to undertake a third party reserve evaluation of the CN field once the current drilling program is complete.

"Once the CN-2 and CN-3 wells are complete and on production, Arrow plans to move the rig to the RCE field to further exploit the multizone RCE structure with two dedicated Gacheta wells and the follow up to the RCS-1 C7 producer. We look forward to providing further updates on this low-risk development drilling program.

"The RCE field is currently producing better than budgeted, and the company is controlling pump speed and choking wells back to efficiently manage the reservoir and discourage premature water production. Additional material production from RCE is expected with the completion of the upcoming three-well development program."

About Arrow Exploration Corp.

Arrow Exploration (operating in Colombia through a branch of its 100-per-cent-owned subsidiary Carrao Energy SA) is a publicly traded company with a portfolio of premier Colombian oil assets that are underexploited and underexplored and offer high potential growth. The company's business plan is to expand oil production from some of Colombia's most active basins, including the Llanos, Middle Magdalena Valley (MMV) and Putumayo basins. The asset base is predominantly operated with high working interests, and the Brent-linked light oil pricing exposure combines with low royalties to yield attractive potential operating margins. By way of a private commercial contract with the recognized interest holder before Ecopetrol SA, Arrow is entitled to receive 50 per cent of the production from the Tapir block. The formal assignment to the company is subject to Ecopetrol's consent. Arrow's seasoned team is led by a hands-on executive team supported by an experienced board. Arrow is listed on the AIM (Alternative Investment Market) of the London Stock Exchange and on the TSX Venture Exchange under the symbol AXL.

Qualified person statement

The technical information contained in this announcement has been reviewed and approved by Grant Carnie, senior non-executive director of Arrow Exploration. Mr. Carnie is a member of the Canadian Society of Petroleum Engineers, holds a BSc in geology from the University of Alberta, and has over 35 years of experience in the oil and gas industry.

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