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Arrow Exploration says West Pepper Well on stream

Published: 09:40 13 Dec 2021 EST

Arrow Exploration Corp - Arrow Exploration says West Pepper Well on production
The West Pepper Well was brought into production at an estimated capital cost of about US$1.3 million

Arrow Exploration Corp (TSX-V:AXL, AIM:AXL, OTC:CSTPF) announced that the Dalehurst 06-26-52-23W5 (West Pepper) well located near Edson, Alberta has been brought on stream.

As of December 10, 2021, the company said the initial stabilized production rates were 6.2 million standard cubic feet (MMscf/d) of natural gas, or over 1,030 barrels of oil equivalent per day (boe/d), at 7,214 kilopascal (kPa) tubing pressure, 30,048 kPa casing pressure, and with no water production.

With the additional production from the West Pepper Well, the company said it estimates that its net corporate production is approximately 1,570 boe/d, almost tripling net corporate production prior to the tie-in of the West Pepper Well.

READ: Arrow Exploration starts trading on the London Stock Exchange's AIM market

The West Pepper Well was brought into production at an estimated capital cost of about US$1.3 million.

With this additional natural gas production, Arrow said it expects to benefit from currently robust natural gas prices in Canada.

It noted that January 2022 natural gas futures contracts at the AECO hub (the benchmark for natural gas prices in Canada) were C$3.87/GJ (gigajoule) as of December 12, 2021, being approximately 30% higher than the third quarter of 2021 average of C$2.97/GJ.

"Production initiation at the West Pepper Well represents a step change in our overall production profile. The well is expected to generate significant additional revenue and cash flow for the company going forward," said CEO Marshall Abbott in a statement.

Due to expected natural decline rates, the initial production rates may not be indicative of the long-term expected production from the West Pepper Well, the com[amy added.

Contact the author: patrick@proactiveinvestors.com

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