Q1 2026 Interim Results
Arrow Exploration Corp. reported a strong first quarter for 2026, with average corporate production increasing to 4,715 boe/d, up from 4,085 boe/d in Q1 2025. Total oil and natural gas revenue, net of royalties, rose to $23.5 million, a 21% increase year-over-year, while Adjusted EBITDA grew 22% to $14.1 million. The company maintained a healthy cash position of $14.2 million at the end of the quarter, supported by $13.6 million in operating cashflows. Drilling three additional development wells in the Mateguafa Attic field contributed to the positive results, and the company also announced a discovery at the Icaco-1 exploration well post-period.
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CALGARY, May 27, 2026 - Arrow Exploration Corp. (AIM: AXL; TSXV: AXL) ("Arrow" or the "Company"), the high-growth operator with a portfolio of assets across key Colombian hydrocarbon basins, is pleased to announce the filing of its Interim Condensed (unaudited) Consolidated Financial Statements and Management's Discussion and Analysis ("MD&A") for the three months ended March 31, 2026, which are available on SEDAR (www.sedar.com) and will also be available shortly on Arrow's website at www.arrowexploration.ca.
Q1 2026 Highlights:
- Average corporate production of 4,715 boe/d (Q1 2025: 4,085 boe/d).
- Recorded $23.5 million of total oil and natural gas revenue, net of royalties, representing a 21% increase when compared to the same period in 2025 (Q1 2025: $19.5 million).
- Adjusted EBITDA(1) of $14.1 million, a 22% increase when compared to the same period in 2025 (Q1 2025: $11.5 million).
- Realized corporate oil operating netbacks(1) of $41.05/bbl.
- Cash position of $14.2 million at the end of Q1 2026.
- Q1 2026 operating cashflows of $13.6 million.
- Drilled three additional development wells in the Mateguafa Attic (M) field in the Tapir block
- Net income of $5.2 million.
(1)Non-IFRS measures - see "Non-IFRS Measures" section below
Post Period End Highlights:
- Drilled the Icaco-1 (IC-1) exploration well, which has resulted in a discovery of three oil bearing sands
- Spud the Icaco-2 (IC-2) appraisal well which will help delineate the pool and determine initial volumes and areal extent of each individual oil producing zone
- Drilled one additional Mateguafa Attic well (M-HZ12)
Cash Balance:
On May 1, 2026, the Company's cash balance was US$24 million. Arrow increased its cash balance while continuing capital expenditures and drilling activity demonstrating strong operating leverage and self-funded growth capability. This balance reflects a significant improvement in netbacks, due to higher crude oil prices and increases in the Company's production, even with continued capital expenditures.
Tapir Extension
The Company continues constructive engagement with authorities regarding the Tapir block extension and believes it is well positioned to secure the extension based on satisfaction all of the relevant requirements. Arrowwill keep the market updated on progress with its license extension discussions in future releases.
Upcoming Drilling
The Company has spud the IC-2 well, which is expected to be put on production over the coming weeks. Thereafter, the Company expects to continue drilling additional development wells at its Icaco field and recompletions in several Mateguafa Attic wells during Q2 2026.
Marshall Abbott, CEO of Arrow Exploration Corp., commented:
"The first quarter of 2026 has been very busy for Arrow. We completed additional development wells in the Mateguafa Attic and planned for the drilling the Icaco-1 exploration well, which proved very successful post period end. We are excited by the Icaco discovery and believe it could become a major production platform with a material impact on the Company."
"The focus for the remainder of 2026 will be to drill additional wells at the Icaco pad, drilling development wells on the Alberta Llanos and Carrizales Norte pads and numerous well recompletions to improve productivity in our currently most prolific fields."
FINANCIAL AND OPERATING HIGHLIGHTS
| (in United States dollars, except as otherwise noted) | Three months ended March 31, 2026 | Three months ended March 31, 2025 |
|---|---|---|
| Total natural gas and crude oil revenues, net of royalties | 23,498,316 | 19,506,125 |
| Funds flow from operations (1) | 11,557,223 | 9,745,553 |
| Funds flow from operations (1) per share - | ||
| Basic($) | 0.04 | 0.03 |
| Diluted ($) | 0.04 | 0.03 |
| Net income | 5,221,470 | 2,663,764 |
| Net income per share - | ||
| Basic ($) | 0.02 | 0.01 |
| Diluted ($) | 0.02 | 0.01 |
| Adjusted EBITDA (1) | 14,060,456 | 11,531,548 |
| Weighted average shares outstanding - | ||
| Basic ($) | 285,864,348 | 285,864,348 |
| Diluted ($) | 288,231,960 | 294,094,348 |
| Common shares end of period | 285,864,348 | 285,864,348 |
| Capital expenditures | 7,882,335 | 11,379,180 |
| Cash and cash equivalents | 14,215,687 | 24,946,934 |
| Current Assets | 37,870,075 | 30,288,808 |
| Current liabilities | 32,608,044 | 19,252,474 |
| Adjusted working capital (1) | 5,262,031 | 11,036,334 |
| Long-term portion of restricted cash and deposits (2) | 249,840 | 129,849 |
| Total assets | 111,547,344 | 90,532,063 |
| Operating | ||
| Natural gas and crude oil production, before royalties | ||
| Natural gas (Mcf/d) | 1,078 | 1,851 |
| Natural gas liquids (bbl/d) | 5 | 6 |
| Crude oil (bbl/d) | 4,530 | 3,770 |
| Total (boe/d) | 4,715 | 4,085 |
| Operating netbacks ($/boe) (1) | ||
| Natural gas ($/Mcf) | ($0.73) | ($1.00) |
| Crude oil ($/bbl) | $42.82 | $42.29 |
| Total ($/boe) | $41.05 | $38.66 |
(1)Non-IFRS measures
Discussion of Operating Results
During Q1 2026, the Company's production increased due to additional volumes of oil crude production from the Mateguafa Attic field in the Tapir block, offset by decreased production in other fields due to natural declines. This has allowed the Company to continue its healthy level of operating results and EBITDA.
Average Production by Property
| Average Production Boe/d | Q1 2026 | FY 2025 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 |
|---|---|---|---|---|---|---|
| Oso Pardo | 98 | 114 | 95 | 103 | 131 | 126 |
| Rio Cravo Este (Tapir) | 881 | 1,043 | 996 | 1,065 | 996 | 1,118 |
| Carrizales Norte (Tapir) | 1,424 | 1,991 | 1,702 | 1,879 | 2,070 | 2,321 |
| Alberta Llanos (Tapir) | 294 | 474 | 446 | 943 | 296 | 205 |
| Mateguafa (Tapir) | 1,833 | 127 | 500 | - | - | - |
| Total Colombia | 4,530 | 3,749 | 3,739 | 3,990 | 3,493 | 3,770 |
| Fir, Alberta | 67 | 100 | 107 | 85 | 100 | 105 |
| Pepper, Alberta | 118 | 162 | 129 | 139 | 170 | 210 |
| KEHO, Alberta | - | 1 | - | - | 5 | - |
| TOTAL (Boe/d) | 4,715 | 4,012 | 3,975 | 4,214 | 3,768 | 4,085 |
The Company's average production for the three months ended March 31, 2026 was 4,715 boe/d which consisted of crude oil production in Colombia of 4,530 bbl/d, natural gas production of 1,078 Mcf/d, and minor amounts of natural gas liquids. The Company's Q1 2026 production was 15% higher than its Q1 2025 production and 19% higher than Q4 2025 due to the Mateguafa Attic additional volumes.
Discussion of Financial Results
During Q1 2026, the Company realized prices of $63.77 per boe (2025: $60.48), due to overall increases in oil and natural gas prices during 2026 and increased production of lighter oil which is sold at a higher realized price than heavy oil.
Three months ended March 31
| 2026 | 2025 | Change | |
|---|---|---|---|
| Benchmark Prices | |||
| AECO (C$/Mcf) | $1.90 | $2.19 | (13%) |
| Brent ($/bbl) | $80.95 | $71.47 | 13% |
| West Texas Intermediate ($/bbl) | $72.15 | $71.40 | 1% |
| Realized Prices | |||
| Natural gas, net of transportation ($/Mcf) | $1.74 | $1.51 | 15% |
| Natural gas liquids ($/bbl) | $111.74 | $62.02 | 80% |
| Crude oil, net of transportation ($/bbl) | $65.89 | $64.70 | 2% |
| Corporate average, net of transport ($/boe) | $63.77 | $60.48 | 5% |
(1)Non-IFRS measure
Operating Netbacks
The Company also continued to realize good oil operating netbacks, as summarized below:
Three months ended March 31
| 2026 | 2025 | |
|---|---|---|
| Natural Gas ($/Mcf) | ||
| Revenue, net of transportation expense | $1.74 | $1.51 |
| Royalties | ($0.10) | ($0.06) |
| Operating expenses | ($2.36) | ($2.45) |
| Natural gas operating netback (1) | ($0.73) | ($1.00) |
| Crude oil ($/bbl) | ||
| Revenue, net of transportation expense | $65.89 | $64.70 |
| Royalties | ($8.20) | ($7.76) |
| Operating expenses | ($14.87) | ($14.65) |
| Crude oil operating netback (1) | $42.82 | $42.29 |
| Corporate ($/boe) | ||
| Revenue, net of transportation expense | $63.77 | $60.48 |
| Royalties | ($7.90) | ($7.19) |
| Operating expenses | ($14.83) | ($14.63) |
| Corporate operating netback (1) | $41.05 | $38.66 |
(1)Non-IFRS measure
The operating netbacks of the Company for the three months ended March 31, 2026 have improved due to the overall improvement in crude oil. The Company continues to develop alternatives to trucking water for disposal in order to improve operating costs. During Q1 2026, the Company incurred $7.8 million of capital expenditure, primarily in connection with the drilling of additional development wells in the Tapir block. This tempo is expected to continue during the remainder of 2026, funded by cash on hand and cashflow.
About Arrow Exploration Corp.
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