Icaco 3, Icaco 4 horizontal & Icaco 5 horizontal successfully drilled and on production
Arrow Exploration, the high-growth operator with a portfolio of assets across key Colombian hydrocarbon basins, 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-3 Well
The Icaco 3 well (IC-3) was spud on July 2, 2026, and reached target depth on July 9, 2026. The IC-3 well was drilled, on time and under budget, to a total measured depth of 7,710 TMD feet (Total Measured Depth), or 7,622 TVD feet (True Vertical Depth) and encountered multiple hydrocarbon-bearing intervals.
Log analysis shows 18 feet of net pay in the Carbonera C7 formation ("C7"), 12 feet of net pay in the Gacheta formation and 20 feet of net pay in the Ubaque formation, for a total net pay of 50 feet TVD.
The well is currently producing from the Gacheta formation at a restricted rate, 19/128 choke and 38 Hz pump frequency, of approximately 250 BOPD gross (125 BOPD net). The oil quality is 25.3° API and there is a lower than 1% water cut.
Management considers the Gacheta production a very important feature in the Icaco discovery not only to prove reserves but also to determine the optimum way to develop the formation and maximize recovery from future wells. The results of the IC-3 production test will be reflected in reserves additions for Arrow at the next reserve report update.
Icaco-4 Horizontal Well
The Icaco 4 horizontal well (IC-HZ4) was spud on June 13, 2026, and reached target depth on June 25, 2026. The IC-HZ4 well was drilled, on time and under budget, to a total measured depth of 12,617 feet TMD or 7,297 feet TVD and encountered multiple hydrocarbon-bearing intervals.
Arrow put IC-HZ4, a short horizontal well, on production on July 2, 2026 in the Ubaque formation. The pay zone is a clean sandstone exhibiting an average porosity of 23% with high resistivities. An electric submersible pump ("ESP") has been inserted in the well after perforating. During the clean-up period the well reached a maximum rate of 799 BOPD gross (399 BOPD net) before settling into the current stable production rate of 150 BOPD gross (75 BOPD net).
Although logs are showing extended areas with high oil saturation along the horizontal section, management believes that during the completion operation ICD valves were placed too close to a water bearing zone, causing the water to overtake and reduce the oil production in the well. Management is looking at alternatives to maximize oil production efficiency in this well.
The IC-HZ4 well also encountered approximately 23 feet of net oil pay TVD in the C7 and 10 feet of net oil pay TVD in the Gacheta formation.
Icaco-5 Horizontal Well
The Icaco 5 horizontal well (IC-HZ5) was spud on July 16, 2026, and reached target depth on July 27, 2026. The IC-HZ5 well was drilled, on time and under budget, to a total measured depth of 11,914 feet TMD or 7,274 feet TVD and encountered multiple hydrocarbon-bearing intervals.
Arrow put IC-HZ5, short horizontal well, on production on August 3, 2026 in the Ubaque formation. The pay zone is a clean sandstone exhibiting an average porosity of 23% with high resistivities. An ESP has been inserted in the well after perforating. The well is still cleaning up and is producing at a current rate of 1,270 BOPD gross (635 BOPD net).
The IC-HZ5 well also encountered approximately 20 feet of net oil pay (true vertical depth) in the C7 formation.
Flow Test Results
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
Five additional cellars have been built at Icaco to continue the drilling program. IC-6 will be a vertical well with Carbonera C7, Gacheta and Ubaque targets.
Production
Including production from the IC-3, IC-HZ4 and IC-HZ5 wells, total gross corporate production is over 5,000 boe/d. Currently the CN-HZ12 well is offline whilst the workover work to restore production is underway. 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.
Cash Balance
As of August 1, 2026, the Company's estimated cash balance is US$27.5 million. The Company continues to have no debt.
Tapir Extension
Arrow and its partner in the Tapir block continue to be encouraged with the dialogue with the Colombian authorities regarding the extension of the Tapir block. 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. Colombia elected a new President, Abelardo De La Espriella, in June. The transition to the new President will take place in August. President De La Espriella has discussed Colombia needing more oil and gas development, and Arrow is looking forward to being a part of the President's vision.
Marshall Abbott, CEO of Arrow commented:
'The success of the Icaco-3 well indicates that the Gacheta formation is able to produce commercial rates. The Icaco-4 and Icaco-5 horizontal wells had very short horizontal sections to prove the Ubaque's ability to produce from a horizontal well. Future projects at Icaco are expected to include both horizontal and vertical development wells targeting the Ubaque, Gacheta and C7. These results underline the significant hydrocarbon density that exists in the Llanos basin and more exclusively in the Tapir Block.'
'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.'
Source: Arrow Exploration
