RE:From Joe Your understanding is not entirely correct. In Canada we have over $75 million in pools and losses. The Canadian pools do not reduce Colombia taxes.
Arrow is taxable this year in Colombia. At the beginning of the year we did have losses and pools of approximately $10 million and we are spending over $30 million in Colombia which will also create tax shield.
The RCE and CN wells have excellent payout periods. The RCE-2 well paid out in 37 days. This, and the current price of Brent does create a Colombian tax liability for Arrow.
The tax regime in Colombia was changed in Sept 2022. Oil companies now pay extra taxes on income when the ten year average Brent prices are above $65 (5%), above $75 (10%) and above 82% (15%). This is on top of the corporate tax rate of 35%.
With the tax shield that we create by drilling wells and other field activities we forecast that Arrow will pay approximately 18-20% tax on income in 2023 and 2024.
Including low royalties (8%~12% for our fields) and very low operating costs of $4-$5/bbl at Tapir, we believe Colombia is one of the best jurisdictions to produce oil in North and South America.
Hope that helps.
Thanks
Joe