Arrow Exploration has acquired a 100% working interest in an oil property in Alberta’s Thorsby area from an undisclosed seller for approximately USD 8.9 million, the company announced on Thursday.
The Thorsby asset covers 9,501 net acres about 200 kilometres north of Calgary, and is estimated to hold almost 5 million boe of 1P reserves and 7.5 million boe of 2P reserves. It is currently producing 550 boepd, of which approximately 27% is oil and liquids, at a decline rate of about 15%. Arrow said it expects secondary recovery to help arrest production declines and increase the recovery factor.
“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 [and] a low-risk development programme with 22 initial drilling locations,” said Arrow CEO Marshall Abbott.
Arrow is funding the acquisition from its cash reserves. Over the past 12 months, the property generated approximately USD 1.4 million in operating income, understood as revenue minus royalties, operating costs and workovers.
Arrow Exploration is an oil and gas producer with assets in Colombia’s Llanos Basin, Middle Magdalena Valley and the Putumayo Basin. In Canada, the company operates assets in western and central Alberta, where it explores, develops and produces oil and natural gas.