Q2 2026 Interim Results
Arrow Exploration Corp. reported a strong second quarter of 2026, with total oil and natural gas revenue increasing 116% to $34.2 million compared to the prior year's $15.9 million. Corporate production rose 30% to 4,902 boe/d, and Adjusted EBITDA saw a significant 300% increase to $25.1 million from $6.3 million in Q2 2025. The company ended the quarter with a cash position of $28.5 million and no debt, while also drilling successful exploration and development wells.
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CALGARY, August 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 and Canadian 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 June 30, 2026, which are available on SEDAR (www.sedar.com) and will also be available shortly on Arrow's website at www.arrowexploration.ca.
Q2 2026 Highlights:
- Recorded $34.2 million of total oil and natural gas revenue, net of royalties, representing a 116% increase when compared to the same period in 2025 (Q2 2025: $15.9 million).
- Average corporate production of 4,902 boe/d representing a 30% increase when compared to the same period in 2025 (Q2 2025: 3,768 boe/d).
- Adjusted EBITDA(1) of $25.1 million, a 300% increase when compared to the same period in 2025 (Q2 2025: $6.3 million).
- Realized corporate operating netbacks(1) of $63.42/boe.
- Cash position of $28.5 million at the end of Q2 2026 and no debt.
- Q2 2026 operating cashflows of $15.7 million.
- Drilled one successful exploration well and two additional development wells in the Icaco field (IC) and one horizontal development well in the Mateguafa Attic field in the Tapir block
- Net income of $10.4 million (Q2 2025: loss of 0.9 million)
(1)Non-IFRS measures - see "Non-IFRS Measures" section below
Post Period End Highlights:
- Drilled two development wells, and spudded a third, at the Icaco field
- Completed the acquisition of the Thorsby field in Alberta, Canada adding production, proved reserves and additional upside opportunities for development drilling (please refer to press release dated August 13, 2026 for more details).
- Recompleted two Carrizales Norte wells to increase production
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. Arrow will keep the market updated on progress with its license extension discussions in future releases.
Marshall Abbott, CEO of Arrow Exploration Corp., commented:
"The second quarter of 2026 has been very productive for Arrow, our best quarter yet. The discovery of the Icaco field has resulted in the beginning of a large development plan. The multi-formation discovery will result in additional reserves and drilling inventory for Arrow. We are excited by the Icaco discovery; it has become a major production platform with a material impact on the Company."
"Arrow significantly increased revenue and EBITDA while sustaining increased production, which, along with a robust balance sheet, supports the ongoing capital program. The focus for the remainder of 2026 will be to drill additional wells at the Icaco pad, 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 June 30, 2026 | Six months ended June 30, 2026 | Three months ended June 30, 2025 |
|---|---|---|---|
| Total natural gas and crude oil revenues, net of royalties | 34,219,743 | 57,718,059 | 15,868,938 |
| Funds flow from operations (1) | 18,904,806 | 30,462,029 | 3,994,525 |
| Funds flow from operations (1) per share - | |||
| Basic($) | 0.07 | 0.11 | 0.01 |
| Diluted ($) | 0.07 | 0.11 | 0.01 |
| Net income (loss) | 10,357,179 | 15,578,650 | (934,735) |
| Net income (loss) per share - | |||
| Basic ($) | 0.04 | 0.05 | (0.00) |
| Diluted ($) | 0.04 | 0.06 | (0.00) |
| Adjusted EBITDA (1) | 25,164,710 | 39,225,167 | 6,269,979 |
| Weighted average shares outstanding - | |||
| Basic | 285,864,348 | 285,864,348 | 285,864,348 |
| Diluted | 289,523,559 | 288,231,181 | 295,209,883 |
| Common shares end of period | 285,864,348 | 285,864,348 | 285,864,348 |
| Capital expenditures | 9,361,608 | 17,243,943 | 14,771,206 |
| Cash and cash equivalents | 28,495,045 | 28,495,045 | 13,212,417 |
| Current Assets | 49,536,264 | 49,536,264 | 20,213,917 |
| Current liabilities | 35,021,378 | 35,021,378 | 19,820,706 |
| Adjusted working capital (1) | 14,514,886 | 14,514,886 | 393,211 |
| Long-term portion of restricted cash | 274,377 | 274,377 | 154,849 |
| Total assets | 126,194,668 | 126,194,668 | 92,729,950 |
| Operating | |||
| Natural gas and crude oil production, before royalties | |||
| Natural gas (Mcf/d) | 574 | 824 | 1,587 |
| Natural gas liquids (bbl/d) | 5 | 5 | 10 |
| Crude oil (bbl/d) | 4,801 | 4,666 | 3,493 |
| Total (boe/d) | 4,902 | 4,808 | 3,767 |
| Operating netbacks ($/boe) (1) | |||
| Natural gas ($/Mcf) | ($1.71) | ($1.07) | ($1.45) |
| Crude oil ($/bbl) | $64.90 | $54.17 | $30.08 |
| Total ($/boe) | $63.42 | $52.44 | $27.36 |
(1)Non-IFRS measures
Discussion of Operating Results
During Q2 2026, the Company's production continued to increase due to additional volumes of oil crude production from the Mateguafa Attic and the new Icaco 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 | YTD 2026 | Q2 2026 | Q1 2026 | YTD 2025 | Q4 2025 | Q3 2025 | Q2 2025 |
|---|---|---|---|---|---|---|---|
| Oso Pardo | 101 | 104 | 98 | 114 | 95 | 103 | 131 |
| Rio Cravo Este (Tapir) | 817 | 753 | 881 | 1,043 | 996 | 1,065 | 996 |
| Carrizales Norte (Tapir) | 1,338 | 1,253 | 1,424 | 1,991 | 1,702 | 1,879 | 2,070 |
| Alberta Llanos (Tapir) | 284 | 275 | 294 | 474 | 446 | 943 | 296 |
| Mateguafa (Tapir) | 2,031 | 2,228 | 1,833 | 127 | 500 | - | - |
| Icaco (Tapir) | 95 | 188 | - | - | - | - | - |
| Total Colombia | 4,666 | 4,801 | 4,530 | 3,749 | 3,739 | 3,990 | 3,493 |
| Fir, Alberta | 79 | 90 | 67 | 100 | 107 | 29 | 100 |
| Pepper, Alberta | 64 | 11 | 118 | 162 | 129 | 47 | 170 |
| KEHO, Alberta | - | - | - | 1 | - | - | 5 |
| TOTAL (Boe/d) | 4,809 | 4,902 | 4,715 | 4,012 | 3,975 | 4,065 | 3,768 |
The Company's average production for the three months ended June 30, 2026 was 4,902 boe/d, which consisted of crude oil production in Colombia of 4,801, natural gas production of 574 Mcf/d, and minor amounts of natural gas liquids. The Company's Q2 2026 production was 30% higher than its Q2 2025 production and 4% higher than Q1 2026, due to the Mateguafa Attic and Icaco fields additional volumes, offset by declines in other fields.
Discussion of Financial Results
The Company realized prices of $89.65 and $76.95 per boe during the three months ended June 30, 2026 (2025: $53.33) due to overall increase in crude oil and natural gas prices during the first half of 2026, offset by decreases in natural gas prices.
Three months ended June 30
| 2026 | 2025 | Change | |
|---|---|---|---|
| Benchmark Prices | |||
| AECO (C$/Mcf) | $1.55 | $1.72 | (10%) |
| Brent ($/bbl) | $96.87 | $69.80 | 39% |
| West Texas Intermediate ($/bbl) | $92.85 | $63.70 | 46% |
| Realized Prices | |||
| Natural gas, net of transportation ($/Mcf) | $1.24 | $1.27 | (2%) |
| Natural gas liquids ($/bbl) | $47.85 | $51.76 | (8%) |
| Crude oil, net of transportation ($/bbl) | $91.34 | $56.87 | 61% |
| Corporate average, net of transport ($/boe) (1) | $89.65 | $53.33 | 68% |
(1)Non-IFRS measure
Operating Netbacks
The Company also continued to realize good oil operating netbacks, as summarized below:
Three months ended June 30
| 2026 | 2025 | |
|---|---|---|
| Natural Gas ($/Mcf) | ||
| Revenue, net of transportation expense | $1.24 | $1.27 |
| Royalties | ($0.27) | ($0.10) |
| Operating expenses | ($2.68) | ($2.61) |
| Natural Gas operating netback (1) | ($1.71) | ($1.45) |
| Crude oil ($/bbl) | ||
| Revenue, net of transportation expense | $91.34 | $56.87 |
| Royalties | ($11.39) | ($6.63) |
| Operating expenses | ($15.05) | ($20.17) |
| Crude Oil operating netback (1) | $64.90 | $30.08 |
| Corporate ($/boe) | ||
| Revenue, net of transportation expense | $89.65 | $53.33 |
| Royalties | ($11.18) | ($6.18) |
| Operating expenses | ($15.05) | ($19.79) |
| Corporate Operating netback (1) | $63.42 | $27.36 |
(1)Non-IFRS measure
The operating netbacks of the Company for the three and six months ended June 30, 2026 have improved due to the overall increase in crude oil prices, as well as increased production. The Company continues to develop alternatives to trucking water for disposal in order to improve operating costs. During Q2 2026, the Company incurred $7.6 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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