Calgary, Alberta--(Newsfile Corp. - May 27, 2026) - 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 months ended March 31, 2026, which are available on SEDAR (www.sedarplus.ca) and will also be available shortly on Arrow's website at www.arrowexploration.ca.
Q1 2026 Highlights:
Average corporate production of 4,715 boe/d (Q1 2025: 4,085 boe/d).
Recorded $23.5 million of total oil and natural gas revenue, net of royalties, representing a 21% increase when compared to the same period in 2025 (Q1 2025: $19.5 million).
Adjusted EBITDA(1) of $14.1 million, a 22% increase when compared to the same period in 2025 (Q1 2025: $11.5 million).
Realized corporate oil operating netbacks(1) of $41.05/bbl.
Cash position of $14.2 million at the end of Q1 2026.
Q1 2026 operating cashflows of $13.6 million.
Drilled three additional development wells in the Mateguafa Attic (M) field in the Tapir block
Net income of $5.2 million.
(1)Non-IFRS measures - see "Non-IFRS Measures" sectionbelow
Post Period End Highlights:
Drilled the Icaco-1 (IC-1) exploration well, which has resulted in a discovery of three oil bearing sands
Spud the Icaco-2 (IC-2) appraisal well which will help delineate the pool and determine initial volumes and areal extent of each individual oil producing zone
Drilled one additional Mateguafa Attic well (M-HZ12)
Cash Balance:
On May 1, 2026, the Company's cash balance was US$24 million. Arrow increased its cash balance while continuing capital expenditures and drilling activity demonstrating strong operating leverage and self-funded growth capability. This balance reflects a significant improvement in netbacks, due to higher crude oil prices and increases in the Company's production, even with continued capital expenditures.
Tapir Extension
The Company continues constructive engagement with authorities regarding the Tapir block extension and believes it is well positioned to secure the extension based on satisfaction all of the relevant requirements. Arrowwill keep the market updated on progress with its license extension discussions in future releases.
Upcoming Drilling
The Company has spud the IC-2 well, which is expected to be put on production over the coming weeks. Thereafter, the Company expects to continue drilling additional development wells at its Icaco field and recompletions in several Mateguafa Attic wells during Q2 2026.
Marshall Abbott, CEO of Arrow Exploration Corp., commented:
"The first quarter of 2026 has been very busy for Arrow. We completed additional development wells in the Mateguafa Attic and planned for the drilling the Icaco-1 exploration well, which proved very successful post period end. We are excited by the Icaco discovery and believe it could become a major production platform with a material impact on the Company."
"The focus for the remainder of 2026 will be to drill additional wells at the Icaco pad, drilling development wells on the Alberta Llanos and Carrizales Norte pads and numerous well recompletions to improve productivity in our currently most prolific fields."
FINANCIAL AND OPERATING HIGHLIGHTS
| (in United States dollars, except as otherwise noted) | | Three months ended March 31, 2026 | Three months ended March 31, 2025 |
| Total natural gas and crude oil revenues, net of royalties | | 23,498,316 | 19,506,125 |
| | | |
| Funds flow from operations (1) | | 11,557,223 | 9,745,553 |
| Funds flow from operations (1) per share - | | | |
| Basic($) | | 0.04 | 0.03 |
| Diluted ($) | | 0.04 | 0.03 |
| Net income | | 5,221,470 | 2,663,764 |
| Net income per share - | | | |
| Basic ($) | | 0.02 | 0.01 |
| Diluted ($) | | 0.02 | 0.01 |
| Adjusted EBITDA (1) | | 14,060,456 | 11,531,548 |
| Weighted average shares outstanding - | | | |
| Basic ($) | | 285,864,348 | 285,864,348 |
| Diluted ($) | | 288,231,960 | 294,094,348 |
| Common shares end of period | | 285,864,348 | 285,864,348 |
| Capital expenditures | | 7,882,335 | 11,379,180 |
| Cash and cash equivalents | | 14,215,687 | 24,946,934 |
| Current Assets | | 37,870,075 | 30,288,808 |
| Current liabilities | | 32,608,044 | 19,252,474 |
| Adjusted working capital (1) | | 5,262,031 | 11,036,334 |
| Long-term portion of restricted cash and deposits (2) | | 249,840 | 129,849 |
| Total assets | | 111,547,344 | 90,532,063 |
| | | |
| Operating | | | |
| | | |
| Natural gas and crude oil production, before royalties | | | |
| Natural gas (Mcf/d) | | 1,078 | 1,851 |
| Natural gas liquids (bbl/d) | | 5 | 6 |
| Crude oil (bbl/d) | | 4,530 | 3,770 |
| Total (boe/d) | | 4,715 | 4,085 |
| | | |
| Operating netbacks ($/boe) (1) | | | |
| Natural gas ($/Mcf) | | ($0.73) | ($1.00) |
| Crude oil ($/bbl) | | $42.82 | $42.29 |
| Total ($/boe) | | $41.05 | $38.66 |
| (1)Non-IFRS measures |
DISCUSSION OF OPERATING RESULTS
During Q1 2026, the Company's production increased due to additional volumes of oil crude production from the Mateguafa Attic field in the Tapir block, offset by decreased production in other fields due to natural declines. This has allowed the Company to continue its healthy level of operating results and EBITDA.
Average Production by Property
| Average Production Boe/d | Q1 2026 | FY 2025 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 |
| Oso Pardo | 98 | 114 | 95 | 103 | 131 | 126 |
| Rio Cravo Este (Tapir) | 881 | 1,043 | 996 | 1,065 | 996 | 1,118 |
| Carrizales Norte (Tapir) | 1,424 | 1,991 | 1,702 | 1,879 | 2,070 | 2,321 |
| Alberta Llanos (Tapir) | 294 | 474 | 446 | 943 | 296 | 205 |
| Mateguafa (Tapir) | 1,833 | 127 | 500 | - | - | - |
| Total Colombia | 4,530 | 3,749 | 3,739 | 3,990 | 3,493 | 3,770 |
| Fir, Alberta | 67 | 100 | 107 | 85 | 100 | 105 |
| Pepper, Alberta | 118 | 162 | 129 | 139 | 170 | 210 |
| KEHO, Alberta | - | 1 | - | - | 5 | - |
| TOTAL (Boe/d) | 4,715 | 4,012 | 3,975 | 4,214 | 3,768 | 4,085 |
The Company's average production for the three months ended March 31, 2026 was 4,715 boe/d which consisted of crude oil production in Colombia of 4,530 bbl/d, natural gas production of 1,078 Mcf/d, and minor amounts of natural gas liquids. The Company's Q1 2026 production was 15% higher than its Q1 2025 production and 19% higher than Q4 2025 due to the Mateguafa Attic additional volumes.
DISCUSSION OF FINANCIAL RESULTS
During Q1 2026, the Company realized prices of $63.77 per boe (2025: $60.48), due to overall increases in oil and natural gas prices during 2026 and increased production of lighter oil which is sold at a higher realized price than heavy oil.
| Three months ended March 31 |
| 2026 | 2025 | Change |
| Benchmark Prices |
|
|
|
| AECO (C$/Mcf) | $1.90 | $2.19 | (13%) |
| Brent ($/bbl) | $80.95 | $71.47 | 13% |
| West Texas Intermediate ($/bbl) | $72.15 | $71.40 | 1% |
| Realized Prices |
|
|
|
| Natural gas, net of transportation ($/Mcf) | $1.74 | $1.51 | 15% |
| Natural gas liquids ($/bbl) | $111.74 | $62.02 | 80% |
| Crude oil, net of transportation ($/bbl) | $65.89 | $64.70 | 2% |
| Corporate average, net of transport ($/boe) | $63.77 | $60.48 | 5% |
| (1)Non-IFRS measure |
OPERATING NETBACKS
The Company also continued to realize good oil operating netbacks, as summarized below:
| Three months ended
March 31 |
| 2026 | 2025 |
| Natural Gas ($/Mcf) |
|
|
| Revenue, net of transportation expense | $1.74 | $1.51 |
| Royalties | ($0.10) | ($0.06) |
| Operating expenses | ($2.36) | ($2.45) |
| Natural gas operating netback(1) | ($0.73) | ($1.00) |
| Crude oil ($/bbl) |
|
|
| Revenue, net of transportation expense | $65.89 | $64.70 |
| Royalties | ($8.20) | ($7.76) |
| Operating expenses | ($14.87) | ($14.65) |
| Crude oil operating netback(1) | $42.82 | $42.29 |
| Corporate ($/boe) |
|
|
| Revenue, net of transportation expense | $63.77 | $60.48 |
| Royalties | ($7.90) | ($7.19) |
| Operating expenses | ($14.83) | ($14.63) |
| Corporate operating netback(1) | $41.05 | $38.66 |
| (1)Non-IFRS measure | | |
The operating netbacks of the Company for the three months ended March 31, 2026 have improved due to the overall improvement in crude oil. The Company continues to develop alternatives to trucking water for disposal in order to improve operating costs. During Q1 2026, the Company incurred $7.8 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 2026, funded by cash on hand and cashflow.
About Arrow Exploration Corp.
Arrow Exploration Corp. (operating in Colombia via a branches of its 100% owned subsidiary Arrow Exploration Switzerland GmbH) is a publicly traded company with a portfolio of premier Colombian oil assets that are underexploited, under-explored 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 Basin. 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. Pursuant to certain private agreements entered between Arrow and its partner, Arrow is entitled to receive 50% of the production from the Tapir block and has the right to request approval to Ecopetrol S.A. for the assignment of 50% of all rights, interests and obligations under the Tapir Association Contract. Arrow is listed on the AIM market of the London Stock Exchange and on TSX Venture Exchange under the symbol "AXL".
Forward-looking Statements
This news release contains certain statements or disclosures relating to Arrow that are based on the expectations of its management as well as assumptions made by and information currently available to Arrow which may constitute forward-looking statements or information ("forward-looking statements") under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that Arrow anticipates or expects may, could or will occur in the future (in whole or in part) should be considered forward-looking statements. In some cases, forward-looking statements can be identified by the use of the words "continue", "expect", "opportunity", "plan", "potential" and "will" and similar expressions. The forward-looking statements contained in this news release reflect several material factors and expectations and assumptions of Arrow, including without limitation, Arrow's evaluation of the impacts of global pandemics, the potential of Arrow's Colombian and/or Canadian assets (or any of them individually), the prices of oil and/or natural gas, and Arrow's business plan to expand oil and gas production and achieve attractive potential operating margins. Arrow believes the expectations and assumptions reflected in the forward-looking statements are reasonable at this time, but no assurance can be given that these factors, expectations, and assumptions will prove to be correct.
The forward-looking statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The forward-looking statements contained in this news release are made as of the date hereof and the Company undertakes no obligations to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Glossary
Bbl/d or bop/d: Barrels per day
$/Bbl: Dollars per barrel
Mcf/d: Thousand cubic feet of gas per day
Mmcf/d: Million cubic feet of gas per day
$/Mcf: Dollars per thousand cubic feet of gas
Mboe: Thousands of barrels of oil equivalent
Boe/d: Barrels of oil equivalent per day
$/Boe: Dollars per barrel of oil equivalent
MMbbls: Million of barrels
BOE's may be misleading particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bblis based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
This Announcement contains inside information for the purposes of the UK version of the market abuse regulation (EU No. 596/2014) as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").
Non‐IFRS Measures
The Company uses non-IFRS measures to evaluate its performance which are measures not defined in IFRS. Working capital, funds flow from operations, realized prices, operating netback, adjusted EBITDA, and net debt as presented do not have any standardized meaning prescribed by IFRS and therefore may not be comparable with the calculation of similar measures for other entities. The Company considers these measures as key measures to demonstrate its ability to generate the cash flow necessary to fund future growth through capital investment, and to repay its debt, as the case may be. These measures should not be considered as an alternative to, or more meaningful than net income (loss) or cash provided by operating activities or net loss and comprehensive loss as determined in accordance with IFRS as an indicator of the Company's performance. The Company's determination of these measures may not be comparable to that reported by other companies.
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