Arrow Exploration Corp.: 2021 Annual Results, Filing of Audited Financial Statements, MD&A and Reserves Report

Calgary, Alberta--(Newsfile Corp. - April 26, 2022) - Arrow Exploration Corp. (AIM: AXL) (TSXV: AXL), the high-growth operator with a portfolio of assets across key Colombian hydrocarbon basins, is pleased to announce the filing of its Annual Audited Financial Statements and MD&A for the year and quarter-ended December 31, 2021 and the filing of its 2021 year-end reserve report, which are available on SEDAR (www.sedar.com). All dollar figures are in U.S. dollars, except as otherwise noted.

Arrow Exploration's Audited Financial Statements together with the notes related thereto, as well as Arrow's Management's Discussion and Analysis for the years ended December 31, 2021 and 2020, will be available shortly on Arrow's website at www.arrowexploration.ca.

FINANCIAL AND OPERATING HIGHLIGHTS

Financial and operating highlights for quarter include the following:

(1)Non-IFRS measures - see "Non-IFRS Measures" section within this MD&A
(2)Long term restricted cash not included in working capital

2021 YEAR-END RESERVES

Arrow has also filed, on SEDAR, the Company's Statement of Reserves Data and Other Oil and Gas Information, Report on Reserves Data by Independent Qualified Reserves Evaluator, and Report of Management and Directors on Oil and Gas Disclosure for the year ended December 31, 2021, as required by section 2.1 of National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities (together, the "Reserve Report").

To recap, the Company's Year-End 2021 Company Gross Reserves Highlights include:

• 3,048 Mboe of Proved Reserves ("1P Reserves");
• 7,421 Mboe of Proved plus Probable Reserves ("2P Reserves");
• 11,541 Mboe of Proved plus Probable plus Possible Reserves ("3P Reserves")1;
• 1P Reserves estimated net present value before income taxes of US$29.4 million calculated at a 10% discount rate;
• 2P Reserves estimated net present value before income taxes of US$84.1 million calculated at a 10% discount rate; and
• 3P Reserves estimated net present value before income taxes of US$134 million calculated at a 10% discount rate.

Arrow refers readers to the Company's press release of March 30, 2022 for additional details, as well as to the Reserve Report filed on SEDAR.

DISCUSSION OF OPERATING RESULTS

The Company's Q4 2021 average corporate production was 712 boe/d, an increase of 137 boe/d compared to Q3 2021 average corporate production of 575 boe/d, or 24%.

The increase in production quarter-over-quarter was largely attributable to the Canadian operation following the tie-in of the West Pepper well in Alberta, Canada which was brought into production in December 2021.

The Company's production on a year-to-date, sequential quarterly, and year-over-year quarterly basis is summarized below.

DISCUSSION OF FINANCIAL RESULTS

During Q4 2021 the Company continued to realize strong oil and gas prices, as summarized below.

Average Benchmark and Realized Prices

(1)Non-IFRS measures - see "Non-IFRS Measures" section within the MD&A

The Company also realized strong operating netbacks, as summarized below.

Operating Netbacks

(1)Non-IFRS measure

The Company experienced a decrease in operating netbacks during Q4 2021 as compared to Q3 2021, decreasing to $27.35/boe in Q4 2021 from $30.73/boe in Q3 2021. The decrease in operating netbacks is attributable to lower realized price for crude sales associated with the Company's share in its Ombu/Capella block in Q4 2021.

The Company incurred capital expenditures during Q4 2021 of $2 million mainly related to its West Pepper well. At the end of Q4 2021, the Company had a positive working capital position of $8 million, and a cash position of $10.9 million.

On October 25, 2021, the Company raised approximately £8.8 million (C$15 million), through a placing and subscription for new common shares with new investors, Canacol Energy Ltd., and executive management (together, the "Fundraising") and published an AIM Admission Document in connection with the admission of the enlarged share capital of the Company to trading on the AIM Market of the London Stock Exchange plc. The Fundraising consisted of the placement and subscription of 140,949,545 new common shares at an issue price of £0.0625 (C$0.106125) per new common share. The Company's executive management invested approximately C$1.41 million and Canacol participated in the subscription to hold 19.9% of the enlarged share capital. Investors received one warrant for every two new common shares, exercisable at C$0.15282 per new common share for 24 months from the AIM admission date (October 25, 2021). The net proceeds of the Fundraising, together with the Company's existing funds, are expected to be used to drill two wells at Rio Cravo Este, and will also be deployed in drilling the Carrizales Norte-1 exploration well.

On the 24th of November 2021, the Company also announced that it had raised C$395,375 on a non-brokered private placement basis through the issuance of 3,765,476 new common shares of no-par value ("Common Shares") on the same terms as the Fundraising. Investors received one warrant for every two Common Shares, exercisable for 24 months from the closing date.

For further Information, contact:

Arrow Exploration
Marshall Abbott, CEO +1 403 651 5995
Joe McFarlane, CFO +1 403 818 1033

Arden Partners
Ruari McGirr / Richard Johnson (Corporate) +44 (0)20 7614 5900
Seb Wykeham / Simon Johnson (Broking)

Auctus Advisors
Jonathan Wright (Corporate) +44 (0)7711 627449
Rupert Holdsworth Hunt (Broking)

Camarco (Financial PR)
James Crothers +44 (0)20 3781 8331
Rebecca Waterworth
Billy Clegg

About Arrow Exploration Corp.

Arrow Exploration Corp. (operating in Colombia via a branch of its 100% owned subsidiary Carrao Energy S.A.) is a publicly-traded company with a portfolio of premier Colombian oil assets that are under-exploited, 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. Arrow's 50% interest in the Tapir Block is contingent on the assignment by Ecopetrol SA 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 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 COVID-19, 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 the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.

This Announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 ("MAR"). Upon the publication of this Announcement, this inside information is now considered to be in the public domain.

NOT FOR RELEASE, DISTRIBUTION, PUBLICATION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/121653