Mr. Marshall Abbott reports

ARROW ANNOUNCES ALBERTA PROPERTY ACQUISITION

Arrow Exploration Corp. has made a property acquisition in Alberta, Canada.

Highlights:

• Acquisition of 100-per-cent working interest in 550-barrel-of-oil-equivalent-per-day oil-producing property in Thorsby, central Alberta, Canada;
• Highly cash generative asset having generated $2-million (Canadian) of operating income in last 12 months;
• $12.15-million (Canadian) (approximately $8.9-million (U.S.)) purchase price financed directly from on-hand cash reserves;
• Significant 1P reserve base of 4,973,000 boe, 2P of 7,537,000 boe and prospective opportunities across 9,501 net acres of land;
• Management plans to deploy development program across lower Cretaceous Sparky reservoir, having identified 22 low-cost, quick-payout drilling locations on the property;
• Current production is approximately 27 per cent oil and liquids; 1P and 2P volumes approximately 55 per cent oil and liquids.

Thorsby property acquisition

Arrow is pleased to announce it has acquired an oil-producing property in the Thorsby area of central Alberta, Canada. The acquisition is a 100-per-cent working interest purchased from a private company. The Thorsby asset has current production of 550 boepd, with low decline rates of 15 per cent and a third party reserve report estimating 4,973,000 boe of total proved reserves (1P) and 7,537,000 boe of total proved plus probable reserves (2P).

The acquisition price is $12.15-million (Canadian) (approximately $8.9-million (U.S.)) and is being financed from Arrow's cash reserves. In the past 12 months, the property has generated approximately $2-million (Canadian) of operating income. The third party reserve report, with an effective date of Dec. 31, 2025, has pretax net present value (discounted at 10 per cent) for the 1P and 2P reserves of $38-million (Canadian) ($27-million (U.S.)) and $71-million (Canadian) ($51-million (U.S.)), respectively. Arrow is assuming decommissioning liabilities of $8.7-million (Canadian) ($6.3-million (U.S.)).

Thorsby is 9,501 net acres of 100-per-cent working interest land approximately 200 kilometres north of Calgary. All lands and associated infrastructure have been acquired as part of the transaction. Alberta Energy Regulator applies 55 million stock tank barrels original oil in place with a 3-per-cent recovery to date. Arrow believes there is significant original oil in place with secondary recovery potential to arrest declines and boost recovery factor.

The lower Cretaceous Sparky reservoir is up to 25 metres in places with a 15-metre net pay average at a 9-per-cent cut-off. Management has identified 22 upside drilling locations on the property.

Marshall Abbott, chief executive officer of Arrow, commented: "The Thorsby acquisition represents a low-risk, exceptional return inventory suite of development drilling opportunities. The development focus is on the Cretaceous Sparky formation as a proven reservoir where management has years of geologic fluency. It gives the company a significant increase in reserves, a low-risk development program with 22 initial drilling locations, while the company remains debt-free and financially healthy.

"The two-mile lateral horizontal wells that Arrow plans to drill at Thorsby are expected to cost approximately $2.2-million (Canadian). Each well pad is planned to contain three wells. The Thorsby area has year-round access and is close to abundant infrastructure.

"The Sparky wells have high initial production (300 barrels of oil per day) rates with low declines and pay out very quickly. The Sparky reservoir has a history of reacting positively to secondary recovery, such as water flood.

"Management believes that the Thorsby acquisition complements the Colombian operations very well. Geologically, the play type and trapping mechanisms are very similar. That is three-way structure juxtaposed against a sealing barrier. This also represents very similar reserve capture and adds significant cash flow and IRRs [internal rates of return] that exceed 500 per cent on a well-by-well basis. Thorsby also represents additional drilling inventory that is complementary to Colombian inventory. This provides significant optionality in pursuing highest-value-add prospects.

"The dedicated Arrow team remains committed to pursuing additional high-return opportunities in both jurisdictions."

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) o f the London Stock Exchange and on 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 was formerly a member of the Canadian Society of Petroleum Geologists, holds a BSc in Geology from the University of Alberta, and has over 35 years of experience in the oil and gas industry.

The technical information has been prepared in accordance with the standards contained in the most recent publication of the Canadian Oil and Gas Evaluation Handbook (COGEH) and the reserves definitions contained in National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities.

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