Mr. Marshall Abbott reports

ARROW ANNOUNCES Q2 2023 INTERIM RESULTS

Arrow Exploration Corp. has filed its interim condensed (unaudited) consolidated financial statements and management's discussion and analysis (MD&A) for the three and six months ended June 30, 2023, which are available on SEDAR and will also be available shortly on Arrow's website.

Q2 2023 highlights:

• Recorded $10.3-million of total oil and natural gas revenue, net of royalties, more than double compared with the same period in 2022 (Q2 2022: $5-million);
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $5.8-million, more than double compared with 2022 (Q2 2022: $2.8-million);
• Average corporate production up 120 per cent to 2,169 barrels of oil equivalent per day (boe/d) (Q2 2022: 980 boe/d);
• Realized corporate oil operating netbacks of $44.21 per barrel (bbl) due to increased production allowing operating cost to be spread over more barrels;
• Cash position of $10.8-million at the end of Q2 2023;
• Generated positive operating cash flows of $4.9-million (Q2 2022: negative $100,000);
• Successfully drilled the Carrizales Norte-1 (CN-1) exploratory well at the Tapir block, resulting in material production and reserves additions.

Postperiod-end highlights:

• The Carrizales Norte-2 (CN-2) well has been successfully drilled encountering multiple hydrocarbon-bearing intervals and is currently on production. The Ubaque zone in CN-2 has produced at initial rates exceeding 600 barrels of oil per day (net) at low water cuts. Reservoir stewardship is in execution in voluntarily reducing high initial rates with the well currently producing at a managed rate of 500 barrels of oil per day net. Forecasted rates were 320 barrels of oil per day (net) per Ubaque well, which is well below flow capability.
• The Carrizales Norte-3 (CN-3) well has been drilled and is currently undergoing production testing in the upper Ubaque. Stabilized flow rates are expected to be reported in first week of September.

Outlook:

• The preliminary development plan at CN consists of 21 wells, the majority focusing on the Ubaque formation, to fully exploit the thick reservoir. The reservoir pay zone is consistently thick (100 feet) across the fault bounded structure. Gacheta targeted wells will also be part of the overall development plan at CN.
• Arrow anticipates drilling two additional wells at Rio Cravo Este (RCE) by year-end to target the Gacheta formation, which was successfully tested at commercial rates in RCE-2.
• Arrow plans to drill two development wells at the Oso Pardo block in the Middle Magdalena basin. Existing wells at Osso Pardo demonstrated initial rates exceeding 400 barrels of oil per day of 23 API gravity crude. This is expected to be initiated prior to year-end utilizing a second rig.

Marshall Abbott, chief executive officer of Arrow Exploration, commented:

"Arrow continues to gain momentum with strong Q2 2023 results. Our exciting drilling program, including the drilling of three RCE wells and three CN wells, is adding significant production and reserves, as well as establishing a new core area. The 3-D seismic West Tapir project is currently being processed and is expected to further evaluate the 2-D recognized fault prospects. The board remains confident in the company's opportunity-rich portfolio and the capability of the Arrow team to increase shareholder value."

Discussion of operating results

The company increased its production from new wells at RCE-3, RCE-4 and RCE-5, and CN-1. These have allowed the company to continue to improve its operating results and EBITDA. There has been a decrease in the company's natural gas production in Canada due to natural declines.

For the three months ended June 30, 2023, the company's average production was 2,169 boe/d, which consisted of crude oil production in Colombia of 1,779 barrels per day (bbl/d), natural gas production of 2,318 thousand cubic feet per day (mcf/d) and minor amounts of natural gas liquids from the company's Canadian properties. The company's Q2 2023 total production was 121 per cent higher than in the same period in 2022.

Discussion of financial results

During Q2 2023, the company continued to realize strong oil prices, offset by decreased gas prices, as summarized in an attached table.

Operating netbacks

The company also continued to realize positive operating netbacks, as summarized in an attached table.

The operating netbacks of the company continued to improve in 2023 due to several factors, principally the increased production from its Colombian assets, even with decreased crude oil prices.

During 2023, the company has incurred in $11-million of capital expenditures, primarily in connection with the drilling of the three RCE and CN wells, civil works completed in Rio Cravo, and shooting 125 square kilometres of 3-D seismic in the Tapir block to highlight existing leads and prospects for drilling. This acceleration in operational tempo is expected to continue during the remainder of 2023, financed by cash on hand and cash flow.

About Arrow Exploration Corp.

Arrow Exploration (operating in Colombia via a branch of its 100-per-cent-owned subsidiary, Carrao Energy S.A.) is a publicly traded company with a portfolio of premier Colombian oil assets that are underexploited, 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. Arrow's 50-per-cent interest in the Tapir block is contingent on the assignment by Ecopetrol S.A. of such interest to Arrow. Arrow's seasoned team is led by a hands-on executive team supported by an experienced board. Arrow is listed on the Alternative Investment Market of the London Stock Exchange and on the TSX Venture Exchange under the symbol AXL.

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