Arrow Exploration (TSXV:AXL) — Investor Presentation

0:01 Good afternoon, ladies and gentlemen, and welcome to the ARROW EXPLORATION Investor Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Just please simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard, and, you'll receive an email when they're ready for your review. I'd also like to remind you that this

0:32 presentation is being recorded. Before we begin, we would like to submit the following poll, and I'm sure the company would be grateful, for your response. And I'd now like to hand over to Marshall Abbott, CEO from ARROW EXPLORATION. Good morning to you, sir. Thank you. Thank you for this opportunity, and thank you for your time. I'm gonna walk you through a very strong value proposition on one of the only producing onshore oil companies in Latin America that's listed on the exchange.

1:13 So just getting through the disclaimer. Here's a snapshot, of the company. So from an investment overview perspective, we have an opportunity rich asset base across two basins in Colombia, two of the more prolific oil producing basins in Colombia where oil production historically has been ongoing for about eighty years. Of course, we're committed to ESG best practices in investing in our communities. We have always taken that stance and operate to the highest standard. We have done that in every jurisdiction we've been busy in.

1:59 Our twenty twenty year end reserves of 7,000,000 BOE are very solid. I'll walk you through the reserve picture in a minute. We have an unrest perspective resource report at a field that we call Carrizales Norte of 1,300,000 barrels net to our share. Production today is actually closer to 580 BOE on our way to 3,000 barrels a day within eighteen months of our financing, which closed last week. We have a seasoned executive team and a board that is diverse, transparent, and independent. And I will take you through the compelling valuation metrics that exist in our company now. The key catalysts are a sixfold increase in production following planned drilling program over the next eighteen months.

2:47 That's focused on expanding production at a pool that we call Rio Cralveste. I will refer to that as RCE and then adding production from Carrizales Norte. We also have a very prolific Canadian asset that we're going to bring on stream, within the next few weeks. All of all of this then pivoting to a lower risk exploration program with significant well inventory on lands that we currently hold based on three d seismic. We completed our financing, £8,800,000, 12,000,000 US, by placing an admission to AIM. The use of proceeds is to support the investment program in Colombia and, on a very interesting asset we have in Canada.

3:38 Corporate snapshot to our market cap today is, just over 30,000,000. Our enterprise value, 21,000,000. We have 286,000,000 shares outstanding. We're north of 553 barrels a day, 7,000,000 barrels of two p reserves, 10,000,000 barrels of three p reserves. Our EV per flowing barrel is about $17,000 per flowing barrel, which is very cheap. EV per barrel in the ground reserves of $3.04 is very cheap. And currently, we're sitting on 12,300,000 of cash. So from a multiple catalyst standpoint, as I mentioned, we have a Canadian asset that we inherited that has two existing wells on it that are very prolific gas producers.

4:27 And gas prices in Canada are currently very robust, approaching $6 per thousand cubic feet. We call this the West Pepper well. I will talk a little more in detail towards the end of the presentation. Focusing on the Columbia asset, the first thing we're gonna do in q one twenty two is drill a development well at RCE 2. We'll follow that back to back with the well at RCE 3. We'll then flip flop over to Carrizales Norte as we will have expanded our drilling pad there and drill Carrizales Norte. And then as you can see, bouncing back and forth between RCE and Carrizales. And then towards the end of this year, early next year, we're gonna shoot a rather broad three d seismic survey.

5:17 A three d seismic is the key to increasing chances of success over 75%. So these are, providing opportunity for material growth and share price rerating. Our production profile shown thus, we're currently in excess of 550 barrels a day. The light blue shade is bringing on the Montney asset at about a thousand BOE. These are very strong gas wells. We've we're tying in what we call the West Pepper Well. Construction will only take about ten days starting within the next couple of days, and that will be on stream the first week of December. So we expect a very large jump in production and cash flow through the month of December and onward.

6:06 And then you can see stair stepping between the two assets of RCE and Carouselas Norte, taking into account 15 declines on that production. As well. We're forecasting only 360 barrels a day net out of those wells. We operate at a 50% working interest. These wells can be much more prolific upwards of a thousand to 2,000 barrels a day. So we'll be very conservative on our modeling and our forecast. As mentioned, 3,000 barrels a day within eighteen months of admission to AIM. We're had the the growth, pardon me, the growth engine primarily from Carrizales Norte and RCE and the additional production from our Montney well in Canada, pivoting to the three d seismic program in the Llanos Basin.

6:58 From an ESG perspective, we've always been friends of the environment. We have constant communication with the environmental regulator in Colombia. As an example, in our oil production in the Yanos Basin, we produce no solution gas. There is no gas entrained in the oil. That oil comes out, basically, as dead oil. It's very light. It comes out fast. And so our GHTs are held to a minimum because there is no gas to flare. We involve the community in everything from security to first aid to road maintenance. That's mandated by the energy regulator in Colombia. Stakeholder engagement, of course, is important to us with the environmental regulator, the government of Colombia, the the energy regulator in in country.

7:52 Our people, of course, are our best asset, certainly down in Colombia. We take care of our guys. We have an ongoing COVID testing program. We have vaccinated all our employees, and they are our strongest resource. We've never had an injury, accident, or or any kind of incident that that affected our people adversely. Then from a leadership and governance standpoint, we'll walk you through the leadership and the governance on the board, as I've mentioned, is diverse, independent, and transparent. Go ahead, Gage. I believe we're having some trouble hearing, Gage.

8:44 Yeah. Was gonna say, Gage, you're on you would appear to be on on mute on your iPhone on your headset, sir. We're not picking you up. If I could just ask you to hand over to to another Marshall, and I'll I'll sort the connection issue. Yeah. I'll I'll just carry on. Thank you, sir. So as mentioned, we have a a seasoned management team. Gage Joel is our executive chairman, thirty years of capital markets experience in the energy space, former head of energy investment banking at Moody at Research Capital, Mackie Research Capital. He's an MBA, a petroleum engineer, and a CFA. I'm Marshall Abbott. I'm pushing forty years of leadership building and accretively selling successful oil and gas companies in multiple jurisdictions worldwide.

9:37 I was trained at Texaco, and then moved to smaller companies, starting my own companies. I've started and sold eight companies profitably, some of them in excess of 200% rate of return. I've got an honors geology degree from University of Alberta. My family's been in the oil business since 1949. Joel McFarlane has been my partner for the last fifteen years, chief financial officer. He grew up in the oil and gas industry and is well respected by not only our regulator, but many of our shareholders and primary institutions. Bob Patrick is our operations manager in Colombia. He's a forty year guy. He's got the hand on the pulse of Colombian oil and gas. Phil Miller is our senior vice president of exploration.

10:28 Phil has been around. He's one of the 200 people worldwide that that really get it in international oil exploration outside of the the major companies. And Max Sattel has seventeen years of experience and is our investor relations corporate development individual. So a very solid management team, well heeled, experienced. And from a board perspective, there's myself engaged. We then have Maria who is domiciled in London, MBA, a fellow of the ACCA. She was in charge of the British Gas acquisition by Shell. She's well heeled in oil and gas operations. Grant Carney, another independent board member, has thirty five years of oil and gas experience. He ran a $1,200,000,000 equity fund based out of Denver. He's been a very solid cornerstone shareholder of mine for the last two deals that I've done. He's got an honors geology degree as well.

11:33 We have two individuals that represent Canacol's interest. Nonexecutive directors, Anthony Zaidy is the, general counsel of Canacol Energy, the largest independent gas producer onshore Columbia, and Ravi Sharma is the chief operating of of Canacol. Canacol owns 19.9% of our stock, and they are fabulous partners. We are actually a spin off of their oil assets that was done in 2018. So we have an excellent relationship with Canacol. They have, gravitas within the Colombian oil and gas industry and are well respected by all stakeholders. So this management team arrived, just as COVID was peaking.

12:23 We were brought on board in April 2020 to turn ARROW around. It it was in distress at that time.

12:32 We, of course, started working for free, and we took prompt action to secure the future of the company. We sold an asset called the Yanos 23 Block to a Carlyle interest for $12,000,000. We reduced staffing levels, canceled unfavorable contacts. We had about 12,000,000 in debt that we knocked down to zero expeditiously. These actions have created substantial value for shareholders, our share price increased from 2.5¢ to recently as high as 16¢. So it's been an enjoyable ride. We intend to take this value proposition much higher as we start to get active in the field and execute on our development plan.

13:20 So here's a snapshot of Colombian oil and gas operations that involve ARROW exploration. The map on the right is the Colombian regional map showing the basins that we have assets in. We are gonna focus today on the Llanos Basin and the Middle Magdalena Basin. The Llanos Basin, we have a 100 square mile concession that we call Tapir, We're currently producing about a 140 barrels a day at Tapir. That is where we're going to be drilling RCE and Carrizales Norte. That's gonna take our production through 3,000 barrels a day in eighteen months. Also, part of number two in the Middle Magdalena Basin, we are a 100% working interest, currently producing about a 130 barrels a day.

14:06 We have applied to the regulator to expand that block to encompass an oil accumulation that we actually are producing from as we speak, and that is a bit of a free option. We're forecasting no production increase out of Osupardo, but I'll show you that in detail. We also have a heavy oil asset that we're a 10% working interest owner that's doing about a 190 barrels a day today. That's operated by a Chinese concern called Emerald Energy, a subsidiary of Sinochem. We don't control our destiny there. We are gonna relinquish that back to Emerald Energy. And then focusing on Canadian production, we have about 90 BOE of gas coming out of nonoperated production in Canada. And then our Canadian pepper gas well that should be on within the next few weeks, we're a 100% working interest.

14:57 And that's gonna be coming on at about a thousand BOE. So we have very near term production ads. We enjoy Brent pricing, less a small differential in in Colombia. Our oil is very light and sweet, and it's used as a diluent in the pipeline, taking it to two major refineries on the Caribbean Coast. And we get paid as soon as we deliver to the pipeline. We have good access to that infrastructure. It's very close to our production operations. Oil is a big chunk of Colombia's GDP, upwards of 30%. Colombia, as a country, peaked at a million barrels a day in 2012. Today, they're at about 750,000 barrels a day. And the government has mandated they wanna get back to a million barrels a day. They've incentivized industry accordingly. The royalty rates that we enjoy are between 812%, which is in the top decile of international fiscal regimes.

15:56 There has been, political unrest, in Colombia, primarily due to COVID angst and the introduction of a tax reform bill by the government. There were two weeks of of protests in most of the urban centers. Through those two weeks of protest, we continued to produce some cash flow without skipping a beat. Of course, that has entirely died down. The count country's back to business. They are upwards of seventy percent vaccinated. The tax reform bill was modified to be much more acceptable. So they do respond, and it is a very pro business environment to be working in from an oil and gas perspective. Here's our twenty twenty year end reserve outlook.

16:45 This is based on December 31 price deck. As you can see in the chart in upper left, those are very conservative pricing values. I'll show you an updated slide in a second showing updated Brent pricing. 7,000,000 barrels of two p reserves. A good chunk of that is the heavy oil asset that we're going to be disposing of. $34,000,000 of two p reserves at 10. And the next slide shows you our reserve picture removing the Ambu asset. So 3,000,000 barrels of two p reserves, 5,000,000 barrels of three p reserves, p v 10 at 26, $26,000,000.

17:31 The Brent pricing price deck in the upper left hand corner is much more realistic at $65. We've done our budgeted flat 65 Brent, and everything that we're doing is is very economic and accretive. In fact, this disposition to back to the the Chinese concern will result in higher corporate netbacks per BOE, and it is an accretive disposition to the company.

18:00 So from an overview of the Tapir block, I'll I'll walk you through with some maps in detail in a second, but there are excellent subsurface fundamentals that exist in the Llanos And Middle Magdalena Basins. There are multiple prospects that have been identified with additional follow-up wells based on success. We have high quality reservoir targets with excellent porosity and permeability. The oil comes out fast. Type wells in the neighborhood that we're active in can have initial production rates of between 1,302,000 barrels a day. On our way down to 10,000 feet on the drilling phase, we typically encounter three oil bearing zones per wellbore. Historically, the regulators allowed only one zone to be produced, but they're opening now the opportunity to complete multiple zones in an existing wellbore, which makes them much more economic, of course.

18:57 And we have multiple opportunities with our existing three d seismic coverage. I'll walk you through that in in a moment. And, we have potential for four to five development wells at each of RCE and Carrizales Norte. And then as we proceed through the development low risk drilling phase, we will pivot to our low risk exploration phase where we have numerous leads currently identified on two d seismic data that we will focus in with a high resolution three d seismic survey. And when you have three d in the Yanos Basin on these tectonic structures up against faults, your chance of success goes to upwards of 75 to 90%, so three d seismic is the key.

19:48 Here's a snapshot of block holdings in the Yonkers Basin. You can see our block at the center of this map. We have a 100 square mile concession in the heart of oil and gas production in the Yanos Basin. Canadian companies in this basin collectively produce about 250,000 barrels a day. There is a strong Canadian presence. As you can see the lineation of some of these ownership blocks is these trends to the North Northeast, these are tracking fault trends that exist on these blocks. So there is oil production out of these single fault trends. Our block, as you can see, is at right angles to that prevailing trend and we actually intersect six fault blocks, one of which we are focusing on for production And as we get our three d seismic survey shot, we're going to have much better resolution on these other five faults that exist on our block.

20:44 The photographs show the terrain that we're active in. These are large agricultural areas, cattle ranching, palm oil plantations, so very easy access year round. And we also have production facilities in place on our Llanos Tapir block. So we can drill these wells inside of two weeks, production test them for another two weeks, and they're on stream immediately, on the Tapir block. So here's a a cartoon map of our block outlined in red. You can see kind of bottom left our RCE one well currently producing about 300 barrels a day. It has three p reserves of 4,000,000 barrels. And then just to the left of that, the purple blob is Carouselas Norte. I'll show you that in much more detail in a second.

21:35 But, the point of this slide is to show you that we are surrounded by oil oil production that today is produced cumulatively about 38,000,000 barrels. We like drilling for oil where oil already exists. One of the more noteworthy fields is the Carrizales Field just south of our block boundary. It's produced close to 9,000,000 barrels today to peaked at 7,500 barrels a day, and we are an extension of that pool just to the north. I'll show you that map in more detail. The blue blobs that you see are leads that we have identified with two d seismic data and where we're going to focus our three d seismic shoot as we progress through to the fourth quarter of twenty twenty two.

22:26 So in developing the Tapir block, you can see our forecast production on the right taking into account 15% declines and showing that, we're forecasting only 360 barrels a day per well, which is a very conservative forecast that we've utilized for budgeting purposes. On the map on the bottom left, you can see the thin gray lines are two d seismic grid that traverse our entire block. And the the blue lead blue pardon me. The blue leads that we see are where we're gonna focus that three d. And as an example, that blog down to the bottom left is called the Akako lead. We think that could contain upwards of 11,000,000 barrels. So that's certainly going to be a very early focus of our three d seismic shoot.

23:12 The upper photograph is our existing pad at RCE. We can fit three more wells on that pad. We do have modular production facilities there as indicated in the photograph at the bottom. Those production facilities can handle upwards of 10,000 barrels of total fluid per day, and they are quite expandable as we proceed through our production growth phase. The wells cost about $2,500,000 net. They pay out in six to eight months. They're very economic wells, especially in light of the current Brent pricing environment. This is a three d map of two of the more prolific zones that we encounter on the way down to 10,000 feet at our RCE block.

23:58 The black line that you see trending to the North Northeast is a a very major fault, and we have these compressional structures that are juxtaposed against that fault. The initial well, RCE one, came on at 700 barrels a day. The wells that we're going to drill in the near term come in much higher with much thicker reservoir. They're very low risk wells, upwards of 90% chance of success on both of these zones, the C 7 A, which is a very prolific producer throughout the basin as is the top of the Gatcheta.

24:29 So, very low risk, basically, wells that we are drilling from our production pad at RCE. We have a 50% working interest. We are the operator. And the Carrizales Norte prospect, we're very excited about. You can see the production increases that we have indicated with 15% declines. Again, really only budgeting for 360 barrels a day net coming out of these pools. The thin black line trending to the Northwest is our block boundary. The thick black line is the fault that we are pursuing. The Carrizales Field Complex to the south, as I mentioned, has produced just under 9,000,000 barrels peaking at 7,500 barrels a day. The discovery well, which is only 1.5 kilometers away from our block boundary, came on at 2,500 barrels a day. So this is a very prolific trend.

25:27 CNC Energia drilled this field up in the, 2010 time frame and ultimately sold the asset for $500,000,000. So we're very excited with this prospect. Again, we have three zones on the way down to 10,000 feet. We are higher and thicker than what was encountered in the Carrizales field. So we're very excited to get on, build the the drilling pad, get these wells drilled.

25:57 So here is our Santa Isabel block where we are a 100 working interest. We're currently producing about a 130 barrels a day. This is in the Middle Magdalena Basin. In the upper left, you can see the yellow triangle that is our existing block where we have three producing wells. And the green blob you see is an oil accumulation that we believe exists on our block and extends on to now relinquished block. We have applied to the energy regulator, ANH, in Bogota to extend our block to encompass that oil accumulation. We're We're forecasting no additional production out of here. It's a bit of a free option, and we're going to pursue that block extension opportunity now aggressively as we can demonstrate financial capability and capacity.

26:50 Again, we have production facilities in place, and we can add production very quickly. These wells are much shallower down to 3,000 feet, much cheaper to drill, and payout in one to two months. So it's a very prolific area. The the big field to the south, the Accordion Arrow Field, is producing about 16,000 barrels a day and is Gran Tierra's flagship production base. Gran Tierra is a Canadian domiciled company that's been active in Columbia for the last fifteen years. We have an exclusive three d seismic survey over our block and where we think the pool extension is going to take place and we commissioned an independent study by Gaffney Klein to come up with what their estimate would be on the development phase of the Santa Isabel Block.

27:40 The map to the bottom left shows where we think we could drill upwards of 20 development wells up against these fault trends that are displayed by the thick black lines. The yellow hashered, oblong blob, to the southwest of of our pool is where we are currently producing three wells. And those three wells to date have produced about 650,000 barrels in a cumulative basis, which is far more than we would expect, which indicates to us that this oil accumulation

28:10 is much bigger. And in fact, we have an oil column that has not tested water yet that is a 150 feet thick. So there's upwards of 20 development wells we could drill at Santa Isabel, and having production peak at about 4,000 barrels a day and this is an independent study done by a very well respected consultancy. Again, this is a free option. We're not forecasting any production growth out of here until we secure the block extension that I've mentioned a couple of times. This slide highlights our Canadian Montney asset. The Montney is a formation within the the Triassic age. The yellow squares are our mineral rights holding in Alberta, Canada.

29:02 So we have approximately 36 square miles of mineral rights on this Montney play, which is the most sought after oil and gas play currently in Western Canada. There were two wells drilled on this play by a predecessor company that we took over. These wells tested very significant rates. The West Pepper six to 26 well produced at seven and a half million cubic feet a day at almost 2,000 pounds per square inch pressure. The East Pepper well was a shorter horizontal that is capable of about three and a

29:37 half million cubic feet a day. The thin red lines are the pipeline infrastructure that we're going to deliver into. We're currently about to embark on production of that 600 meter pipeline tie in that's costing us about 1,400,000. It's gonna pay out very quickly when we bring that well on at five and a half million cubic feet a day or upwards of a thousand barrels a day. So that is where our near term production growth is going to take place. At those kind of rates, we'll be cash flowing in a $500,000 a month of of cash flow moving forward. The East Pepper well, we are also going to be tying in very economic at today's gas prices in Western Canada that are pushing $6 a thousand cubic feet. So there is a need for gas. There's much demand for gas in Alberta and British Columbia, and we were exporting the the most amount of gas in The United States that we ever have. So it is a a very valuable asset for us.

30:38 The royalty rates that we enjoy on this production approximately 12% so our net backs are very strong and we have a competent person's report shows gas initially in place of about 1.8 Tcf. It is a very valuable asset for us.

30:58 Turning these two wells on provides optionality for us. We can then seek industry appetite to see if there is a farm in that could be done. These are very expensive wells at $8,000,000. As well, we we would entertain offers in monetizing this asset. But bringing that production on provides proven developed producing reserves that attracts attention. The the production hit history should be very strong so this is a very solid economic move. Any cash that we enjoy coming out of this asset either through farm in or

31:37 outright sale we would then dedicate that cash to our Colombian operations where we have our focus.

31:48 From a valuation perspective, we are very cheap, very unrecognized. We have been on the AMEXchange for about a week. On the chart on the left, you can see we're valued at $17,000 per flowing barrel where the average is upwards of 54,000. And from a enterprise value per barrel in the ground perspective, again, we're very cheap. And we expect to get the word out especially with our near term production ads we will see these valuation metrics increase on the company's behalf in a net perspective.

32:25 We have analyst coverage from Octus Advisors in The UK. Stefan Foucad has been around. He's got at 30¢ a share. Daniel Slater at Arden Partners who are a nomad has us at 12¢ a share. He's focused only on PDP volumes at the moment, but certainly recognizes where the upside is going to come from as we proceed through the drilling phase. So we're well supported by a couple of underwriters in London.

32:55 And from, taking steps to value creation both historically and in future, we have, basically brought this company off of the brink. We have reconstituted the board and the management team. We have reduced g and a from $7,000,000 down to $3,000,000. We initially had 90 employees. Now we have 24. We have resumed production at RCE and intend to be drilling at RCE and at Carrizales Norte. We dispose of an asset to the Carlyle Group for $12,000,000 in the 23 block. We have solidified our balance sheet currently sitting on just under $13,000,000 of cash.

33:42 We've resumed production at. We have also brought production on at RCE, and we have been successful in financing and listing on the AIM. We're going to drill four to five wells each at RCE and Carrizales Norte and ultimately establish a pivot into low risk exploration drilling on assets we hold. We're looking to maximize the value of our Canadian assets while at the same time, pardon me, we are attempting to extend our block at Oslo Pardo, which is a bit of a free option.

34:28 So it's been quite a turnaround. We are really going to be the AIM exchanges focus on Colombia. All of this underpinned by a commitment to e to ESG best practices. We're excited with this opportunity. This is very low hanging fruit, very low risk at excellent oil and gas price prices onshore Columbia. So that is our story. We would certainly entertain any questions. That's great. Thank you very much indeed, Marshall, for updating investors this afternoon. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. But just while this company take a few moments to review those questions submitted already, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor meet company dashboard, and we'll email you when that's ready for your review. I'd also like to remind you that your feedback is important to the company.

35:28 And after this meeting has ended, we'll redirect you for the opportunity to provide your feedback in order the company can better understand your expectations. Marshall Gage, I think you're back with us. Can you hear us okay, sir? I can Perfect. Thank you, Gage. Good to have you back. So we had a number of questions submitted by investors ahead of the event. And I wanted, if I may, to start off the Q and A with those. The first question reads as follows. What experience does the Board and management have operating assets in Colombia? When new management took over in April 2020, what attracted you to this opportunity? Well, Colombia is a very prolific oil and gas jurisdiction. It's known for its pro business background.

36:16 We've got significant history on management and board operating in Columbia for the past fifteen years successfully, I might add. Canacol is a significant owner, and we represent a spin off of their oil assets when they pivoted to natural gas production. And their oil assets are highly valued in the right neighborhood with the right address, very low risk. And, it's light crude that comes out quickly with with with no associated solution gas, which, again, keeps us on side with respect to our operating practices and ESG. Next question. Next question reads as follows. What was the rationale for the dual listing?

37:03 Well, that's a very good question. So we were listed on the Canadian exchange, the TSXV. There was really no historical support. The primary reason we listed on the AIM exchange is UK investors have a much more forward looking perspective in in foreign jurisdictions, whereas, the TSXV right now really has pivoted away from oil and gas centric investing. And, it is very difficult raising equity in the Canadian markets for oil and gas players at the moment. There's really been no equity deals done within the energy space within the last twenty four months in Canada. So we we opted to go to a much more forward looking exchange in the AMEXchange, and we have succeeded in this financing where, it would have been impossible on the Canadian exchange. But now there's additional focus being being paid to the company, and, we're looking at deploying that cash effectively, economically, and expeditiously.

38:10 That's great. Thank you very much indeed, Marshall. Just turning around to to m and a, really. How much potential is there for m and a was one of the questions that was submitted? A very good question. So there are numerous operators in Colombia, some of which are distressed with balance sheets. Some of them are rather big companies, and they're looking to decant assets to get their balance sheets on side. We are very active in engaging, the oil and gas community onshore Columbia in Bogota. So we're well connected in that respect. We wouldn't hesitate to pick up additional production and and, drilling prospects, over the next twenty four months. We'll be very active on the m and a phase.

38:56 In fact, we're looking at a particular deal that was presented to us just this week. So there is multiple opportunities for m and a activity in Columbia. And from an m and a perspective at the same time, we would always entertain mergers and acquisitions of the company if it made sense for our shareholder base. Thanks very much indeed, Marshall. Next question reads as follow, will you pay a dividend? So in the growth phase of this company, we have a vision of getting this company upwards of 10,000 barrels a day. When we achieve the 10,000 barrel a day mark, we would certainly look at at issuing a dividend. As it stands now, we're gonna be using all of our cash proceeds to exploit the low risk opportunities that I presented to you today. So in the near term, no. In the medium term, yes.

39:51 That's great. Thank you very much indeed. Turning to the next question. How are hydrocarbons priced onshore, Colombia? Again, a good question. So we enjoy reference pricing off of Brent. And Brent, as we know, is is very strong in in and around the $80 range per barrel. The pricing that we received at the field is called the Vasconia differential, which is a $2 to $5 differential off grid pricing. Historically, it's hovered more around $2 where it is today. So very strong pricing onshore Columbia using the Brent Vasconia reference. That's great. Thank you very much indeed.

40:36 Will you eventually divest entirely from onshore Canada? Yeah. We would if if the right deal came along, we would certainly divest on the Canadian asset. As I mentioned, the Montney plays the most sought after, and it is almost impossible to put a land base together like we have with 36 square miles of mineral rights in the Montney. As I mentioned, those wells are expensive. They're long reach horizontals that require multistage fracs, but the gas comes up very quickly, and ultimately, there would be liquids recovery as well. So it's attracting attention. It will attract more attention as we put these wells on production. But, yes, we would look at deploying the cash received either from cash flow or an outright sale or farm out, back into our Colombian prospects.

41:26 That's great. Thank you very much. We got three more. I I would I would add I would add as well that it's almost like a free option because a predecessor company drilled these two wells. They tested them, and they were standing idle and not tied in. So this is an expenditure of about 16,000,000 to $18,000,000 that we're taking advantage of by investing $1,400,000 for the West Pepper well and about 1,500,000 for the East Pepper well. So we're getting the benefit of those assets that was never realized in the company beforehand. That's great. Thank you, Cagran. Sorry to cut across. Next question, we've got three more of these pre submitted questions and then perhaps we can look at some of the live questions. What are you what is your overarching strategic objective for the company for the next twelve to twenty four months?

42:19 Production ads are our focus. Cash flow fact pardon me. The cash flow forecast, as I mentioned, is is very conservative at 360 barrels a day net. These wells come on much stronger than that. So our focus is to get to the 3,000 barrel a day threshold as quickly as possible without being overly aggressive. But the economics of drilling these wells are very robust in the current pricing environment. Our net backs on this crude exceed $55 per barrel after operating costs and g and a. So that 3,000 barrel a day threshold is is very important to us. On the AIM exchange, we would likely be the only foreign offshore pardon me, onshore operator in South America that is actually producing the cash flowing.

43:09 So we're very excited with the the prospectiveness that we've got in front of us. Thank you very much indeed, Marshall. And I guess finally, what could your near term production growth profile look like? It's a a very solid ascent adding, production on a monthly basis. So as mentioned, these wells take about two weeks to drill, another two weeks to production test and get on stream. So production adds into our existing facility are very straightforward, at 360 barrels a day per well, and we'll get to 3,000 barrels a day in eighteen months. Great. Thank you very much indeed. Well Well, takes care of the pre submitted questions. So thank you to those investors that took the time to submit those.

43:56 Max, I don't know whether if I could hand back to you to have a look through the live Q and A and if I could ask you to read out the questions and I guess where appropriate give those responses and then I'll pick up from you at the end. Sure. I'm happy to do that. So there was a question from Michael with respect to cash in relation to market cap. So to quote, you said you have GBP 12,000,000 British pounds in cash producing assets and market cap of just 14,000,000. What am I missing? And so I guess, Michael, in response to that, yes, right now after the financing, we have approximately 9,100,000 in cash and the market cap just using our basic shares is around GBP 14,500,000. So we're trading just slightly above the cash amount, if you will.

44:46 So we are undervalued based on obviously our assets that Marshall discussed, cash flow and importantly in relation to our peers. Of course, we've just gone public on the aim as Marshall said just over a week ago, we were listed on the TSX for some time. And we hope to materially change, you know, that that valuation paradigm as we execute in the in the field. So, hopefully, that answers the question. There was another question that came in from from David. You know, what what probability would you put on getting the Osoparto extension? So, Marshall, I hate to put you on the spot, but if we were to handicap the probability of that happening in in the next, you know, let's say twelve months, what what do we think that is, or is there a better way to answer that question?

45:34 Well, our our focus will certainly be on aggressively aggressively pursuing the block extension. We've had an application in front of the energy regulator now for some time. The the fact that we can show financial capacity really strengthens our case in going to the NH and getting that block extended. There is certainly precedent for it within the basin, within all the basins of Columbia. We're very confident inside of the next twelve months, we'll we'll secure that block extension and initiate drilling on the Osso Porto block. There's another question, Marshall, David. David says, Looking at read through from other transactions, what value would you aspire for your Canadian assets once those two wells are brought on production?

46:27 So in aggregate, those two wells will be producing through twenty twenty two close to 1,000 barrels a day after declines have set in. Production metrics on Montney acquisitions in Canada are upwards of $25,000 per flowing BOE. So that that adds quite an exciting valuation to our assets taking into account that these wells are upwards of $8,000,000 to drill. So 10 to $20,000,000 would be, I think, a very attractive transaction for us on the Montney asset. If this thing was fully developed to its potential with a 40 well drilling program, you'd be looking at a TCF of gas reserves.

47:26 Next question, That's great. There was yeah. There was another question with respect to, what do management own in terms of shares and the, the cumulative ownership is between the management team on the call. Of course, we've got other management shareholders that are not on the call, but the top executives that are on this call own approximately 6.5% of the shares outstanding. That's great. Thank you very much indeed, Max. And I think you've taken care of all the questions that have come through. If any more questions do come through, obviously, we'll make these available to you for your review afterwards. Marshall, I know it's early in the morning with you. I know that feedback is important to you as well. We'll shortly redirect investors to give you their thoughts and expectations. But perhaps before doing so, I could just ask you for a few closing comments to wrap up with.

48:17 Just before you go ahead, Marshall. The other thing I would add to Max's answer is management bought those shares at the same price as the placing in on the AIM placing. So while we own 6% of the six and a quarter percent of the shares, we did so at the same price that investors in The UK did. So sorry. Go ahead, Marshall. And that was a $1,400,000 investment. So we've got a very solid foundation now from the production base from landholding base on Shore Columbia. We're very excited to take this company to the next phase.

49:03 The drilling phase, we're tying in production very quickly here within the next month. That's gonna provide some traction on the share price. When we do get that well tied in, we're going to be doing much more aggressive marketing on on promoting the stock. We'll be in London probably for a week to ten days to meet with all existing and new shareholders and future shareholders. So we'll be very active in promoting the stock and getting traction on that share price to a much more realistic valuation. The prospects that we're going to pursue in the near term are very low risk and adding production conservatively at 360 barrels a day met when these wells can produce upwards of 2,000 barrels a day. So we're very excited with that platform and then as we proceed through our development drilling program, we're going to start focusing on exploration assets.

49:59 We feel that we've got 10,000 barrels a day of potential on our existing land holdings onshore Columbia. So it's a very exciting growth phase for us and, the AIM exchange as I've mentioned is very forward looking. We look forward to being, treated, very positively on the AIM exchange. So it's an exciting growth engine for us. We're committed. We are parallel to all our investors, and we look forward to reporting good news in the very near future. Thank you for your time today. This is a very exciting platform for us to be involved in. That's great, Marshall. Thank you very much and to to gauge Joe and to Max for your time and for updating investors this afternoon. Can I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations?

50:51 This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of ARROW EXPLORATION, we'd like to thank you for attending today's presentation. That now concludes today's session, and good afternoon, and good morning to you to you guys in The US.