WTI (July) $60.94 -90c, Brent (July) $64.15 -75c, Diff -$3.21 +15c
USNG (July) $3.52 -4c, UKNG (July)* 82.02p -5.58p, TTF (July) €35.385 -€1.43
*Denotes expiry of June contact

Oil price

The oil price is drifting ahead of the Opec meetings over the weekend, expecting a release of another 411/- b/d. Apart from that balanced books at the month end and Brent July expiry tonight. 

Arrow Exploration Corp

Arrow has announced 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, 2025, which are available on SEDAR (www.sedar.com) and will also  be available shortly on Arrow’s website at www.arrowexploration.ca, and to provide an update on operational activity.

Q1 2025 Highlights:

• Recorded $19.5 million of total oil and natural gas revenue, net of royalties, representing a 36% increase when compared to the same period in 2024 (Q1 2024: $14.4 million).
• Adjusted EBITDA(1) of $11.5 million, a 15% increase when compared to Q1 2024 (Q1 2024: $10 million).
• Average corporate production of 4,085 boe/d (Q1 2024: 2,730 boe/d).
• Realized corporate oil operating netbacks(1) of $38.66/bbl. 
• Cash position of $24.9 million at the end of Q1 2025.
• Generated operating cashflows of $14.4 million (Q1 2024: $8.6 million).
• Drilled two additional development wells (AB 2 and AB 3) in the Alberta Llanos field in the Tapir block.
• Net income of $2.7 million.
• Completed shooting 90 km2 of new seismic data on the southeast section of the Tapir Block to identify and confirm existing prospects.

(1) Non-IFRS measures – see “Non-IFRS Measures” section within the MD&A

Post Period End Highlights:

• Spud the first horizontal well, AB HZ4, in the Alberta Llanos field in the Tapir block.
• CN HZ 10 and CN 11 brought on production.
• Entered into a $20 million prepayment agreement with an integrated energy company.

Upcoming Drilling

The rig has spud the AB HZ 4 well, the first horizontal well in the Alberta Llanos field, which is expected to be on production in June. Thereafter, the Company expects to drill another horizontal well on the Alberta Llanos pad.

Arrow has also secured a second rig that will mobilize to the Rio Cravo Este (RCE) field to drill up to four development wells in RCE and will then mobilize to the Carrizales Norte pad for further development drilling. The first RCE well is expected to spud in early June.

Total budgeted capital expenditures planned for 2025 is approximately $50 million, net to Arrow, of which $11.4 million was spent in Q1 2025. The capital program is expected to result in production for 2025 being significantly higher than current levels.

Prepayment Agreement

The Company has entered into a two-year crude prepayment agreement with an integrated energy major to market its oil production in Colombia.  In exchange for the exclusive right to market the Company’s oil production, the agreement provides access of up to US$20 million in prepaid crude sales in year one with the limit reducing to US$15 million in prepaid sales in year two at attractive interest rates.

As at May 1, the Company’s cash balances were $24 million. 

Marshall Abbott, CEO of Arrow Exploration Corp., commented:
“The first quarter of 2025 has been exciting for Arrow. The two wells, AB 2 and AB 3 at Alberta Llanos, have highlighted the potential for horizontal development in the Ubaque as well as follow up zones in the C7 and Guadalupe.”

“During the dry summer months in the Llanos basin, the Company has developed a new road system from the Carrizales Norte pad to the Capullo pad, the Mateguafa Oeste pad and the Mateguafa Attic pad.  These pads will be utilized in the Company’s planned drilling program for the remainder of 2025. The Company has secured a second rig which is expected to spud the first of four wells at RCE in early June.”

“The Company completed a 90 km2 3D seismic program in the southeast section of the Tapir block.  The seismic has been processed and is now being analyzed to help develop prospects for the 2026 drilling program.”

“In the first quarter of 2025, the Company put in place additional water disposal infrastructure in the form of the conversion of AB 2 into a water disposal well and the workover of RCE 1 and CN 4.  We are also working towards the conversion of CN 5 into a water disposal well.  AB 2 should be in operation in late Q2 and CN 5 in Q3.  The wells at Carrizales Norte and Alberta Llanos have begun to produce more water than previously modeled, resulting in curtailment of production.  The new water infrastructure is expected to create excess disposal capacity to allow for increases in pump speed on currently curtailed production and for the next development stage of 2025 budgeted projects.”

“Arrow is pleased to announce that it has entered into a prepayment financing agreement with an integrated energy major. The two-year agreement provides Arrow with access to up to US$20 million in prepaid crude sales, with the limit reducing to US$15 million after the first year. This facility provides Arrow with significant financial flexibility, allowing Arrow to pursue growth opportunities from acquisitions to expanded capital programs. In conjunction with the financing, the integrated energy major, through its Colombian subsidiaries, will become the exclusive marketer for all of Arrow’s oil production.”

“Both Brent and AECO prices have been impacted by the volatility experienced in early 2025 but the Company still has very healthy netbacks from its Colombian oil production.  Arrow’s 2025 capital budget is expected to be paid for by available cash and cash flow from operations. Our focus for the remainder of 2025 will be to grow production, continue development at the Carrizales Norte, Rio Cravo Este and Alberta Llanos fields and explore low risk new prospects in the Tapir block.” 

Arrow continues to build the business with successful drilling leading to production of 4,085 boe/d (2,730) and Q1 results ahead of expectations and horizontal wells still being outstandingly good. This led to cash of some $24.9m at the quarter end helped by operating cash flows of $14.4m (8.6m).

Looking forward the company completed a significant seismic programme on the Tapir Block which is being analysed ahead of next years drilling programme. For this year the drilling programme has continued into the 2nd half fully funded by revenues up 36% increase in revenue and a water disposal programme more than enough to cover 2025 projects.

Elsewhere the company has been attending to housekeeping, firstly by developing a new road system from the Carrizales Norte pad to the Capullo pad, the Mateguafa Oeste pad and the Mateguafa Attic pad and which are ready for the drilling programme foe the rest of this year. Finally, as promised Arrow has secured a second rig which is earmarked for the first of the four wells at RCE in early June.

Finally the company has signed a prepayment financing agreement with an energy major which provides up to $20m in prepaid crude sales in year one, $15m in year two. This gives Arrow significant financial flexibility, it can make acquisitions, increase its capital programmes and gives the partner exclusive marketing rights. 

Arrow is in a very strong position, increasing production builds the cash pile, strengthens the balance sheet and funds an ever increasing drilling and seismic programme which in turn grows the business. Like a number of companies it is suffering from markets not appreciating such success but it is sure to do so in due course, Arrow remains a core member of the Bucket List and is massively cheap as well as being very well managed.

PetroTal Corp

PetroTal Corp. (“PetroTal” or the “Company”) (TSX: TAL, AIM: PTAL and OTCQX: PTALF) is pleased to announce the renewal of its normal course issuer bid (the “NCIB”), following approval by the Toronto Stock Exchange (“TSX”). All amounts are in US dollars unless stated otherwise.

PetroTal expects that the NCIB will continue to provide an additional tool to enhance total long-term shareholder returns. The Company believes that, at times, the prevailing share price does not reflect the underlying value of its common shares (“Common Shares”) and the repurchase of Common Shares for cancellation represents an attractive opportunity to improve PetroTal’s per share metrics and thereby increase the value of the Common Shares.

The NCIB allows PetroTal to purchase up to 45,776,656 Common Shares, representing approximately 5% of its 914,988,946 issued and outstanding Common Shares as at May 26, 2025, over a 12-month period commencing on June 3, 2025 and ending no later than June 2, 2026. Under the NCIB, purchases of Common Shares may be made through the facilities of the TSX, alternative trading systems in Canada, if eligible, and AIM, a market operated by the London Stock Exchange in accordance with applicable regulatory requirements. Purchases under the NCIB will be made through open market transactions at market price, as well as by other means as may be permitted under applicable securities laws. The actual number of Common Shares that may be purchased under the NCIB and the timing of any such purchases will be determined by management of the Company. Any Common Shares purchased under the NCIB will either be cancelled or, where appropriate, temporarily held in treasury to satisfy employee share awards.

Under the TSX rules, the total number of Common Shares PetroTal is permitted to purchase on the TSX is subject to a daily purchase limit of 163,942 Common Shares (representing 25% of the average daily trading volume of 655,771 Common Shares on the TSX calculated for the six months ended April 30, 2025); provided that PetroTal may make one block purchase per calendar week that exceeds such limits.

In connection with the NCIB, the Company renewed a buyback agreement with Stifel Nicolaus Europe Limited (“Stifel”), who will continue to conduct the NCIB on PetroTal’s behalf and entered into an automatic purchase plan (the “ASPP”) with Stifel. The ASPP allows for the purchase of Common Shares under the NCIB at times when PetroTal would ordinarily not be permitted to purchase Common Shares due to regulatory restrictions and self-imposed blackout periods. Stifel intends to instruct Stifel Nicolaus Canada Inc. as its agent to conduct purchases of Common Shares on the TSX. Under the ASPP, before entering into a blackout period, PetroTal may, but is not required to, instruct Stifel to make purchases under the NCIB within specified parameters. Such purchases would be at the discretion of Stifel based on parameters provided by the Company prior to the blackout period in accordance with the terms of the ASPP and in compliance with the rules and regulations of the TSX, AIM and applicable securities laws. Any purchase of Common Shares on the TSX or alternate trading systems in Canada will continue to be completed by Stifel Nicolaus Canada Inc. acting as agent for Stifel. The ASPP has been pre-cleared by the TSX. All purchases made pursuant to the terms of the ASPP will be included in computing the number of Common Shares purchased under the NCIB. Outside any blackout period, Common Shares may be purchased under the NCIB based on the discretion of the Company’s management in compliance with applicable exchange rules and securities laws.

The Company was permitted to repurchase up to 14,600,000 Common Shares under its current NCIB that commenced on May 23, 2024 and ended on May 22, 2025. As at May 20, 2025, the Company had repurchased an aggregate 5,361,533 Common Shares under the expiring NCIB on the open market at a volume weighted average price per Common Share of approximately USD$0.4669 per share.

No need for much comment here, PetroTal are adding to their shareholder distribution programme with a share buy back which adds around 2% to total return in my view.

Petro Matad

Petro Matad has provided the following operational update.

Key Company Updates

• The invoices for Block XX Heron 1 production from October 2024 to end April 2025 have been processed by PetroChina and are ready for payment. Prior to making payment, PetroChina has asked Petro Matad to get confirmation from the authorities that there will be no customs, VAT or tax charges levied resulting from the Oil Sales Agreement. That engagement is underway and if the response is slow in coming, Petro Matad and PetroChina are discussing payment of the majority of the amount due with a percentage withheld pending confirmation.
• Pumping at Heron 1 is now in operation to lift oil to surface with the well delivering c. 160 barrels of oil per day (bopd) with very low water cut below 6 %.
• Evaluating the merits of converting Heron 2 into an injection well to provide reservoir pressure support to Heron 1 to enhance productivity and recovery.
• Tenders for connection of Heron 1 to the local electricity grid to offset diesel usage are under evaluation.
• Gazelle 1 well test planning is ongoing with potential to put the well on production immediately if the test is successful.
• Gobi Bear 1 geochemistry study has confirmed the presence of migrated oil in the reservoir section.
• Block VII Environmental Baseline Study completed, 2025 budget approved and technical evaluation ongoing and attractive exploration targets identified.
• Discussions with potential partners on Block XX are ongoing.

Operational Update

Block XX

Oil sales

Invoices for payment for production from the October 2024 start-up of Heron 1 to the end of April 2025 have been processed for payment. Prior to making payment, PetroChina has asked Petro Matad to get confirmation from the authorities that there will be no customs, VAT or tax charges levied resulting from the Oil Sales Agreement. The engagement with the authorities is underway. The Company’s tax experts have been of the view throughout the negotiations of the agreement that no such charges are applicable under law and by precedent but if confirmation from the authorities is slow in coming, Petro Matad and PetroChina are discussing payment of the majority of the amount due with a percentage withheld pending confirmation.

Heron 1

After several months of production from Heron 1 on natural flow, the reservoir pressure has declined in line with the trend seen in Block XIX production wells and the originally installed beam pump to lift oil to surface is now in operation. The pumped production rate of the well is averaging circa 160 bopd with low water cut below 6%. Based on the results of successful reservoir pressure support programmes applied in Block XIX, we are reviewing the merits of converting the Heron 2 well into a water injector. Pressure support can enhance daily production and overall recovery.

The project to tie-in the Heron 1 wellsite to the nearby and recently upgraded electricity grid, to offset diesel use for power generation and so reduce operating costs, has reached the tender evaluation stage. If the commercial bids are attractive, we anticipate completing the connection during the summer months.

Potential to add more production in 2025

The planning for a well test on the Gazelle 1 oil discovery is ongoing. With a successful test, production via the nearby Heron 1 facilities would follow while the necessary certification work is completed to allow a full development of the accumulation. Meanwhile, a geochemistry study on cuttings samples from the Gobi Bear 1 well has concluded that migrated oil is present in the reservoir section. Whilst not a conclusive indicator of moveable oil in the well, this is a positive result and the petrophysical evaluation of the Gobi Bear 1 logs is being revisited to determine the zones with the best potential for oil pay and the optimal intervals for well testing. Success in a test at Gobi Bear 1 could add significant reserves in Block XX and the well could also be put on production through the Heron 1 facilities in short order.

Sequential well intervention activities on Heron 2, Gazelle 1 and Gobi Bear 1 offer a highly cost-effective way to further evaluate these wells. All three are cased to bottom and suspended so the cost to re-enter and perform well tests is low given that a small workover rig can execute the programme.

Block VII

An Environmental Baseline Study for the newly signed Block VII has been completed and this and additional documentation have been sent to the relevant ministries for approval after which the formal Exploration Licence will be issued. The 2025 work programme and budget comprising studies and fieldwork have also been approved by the Mongolian regulator, the Mineral Resources and Petroleum Authority of Mongolia (MRPAM).

In parallel with these legal requirements, Petro Matad has been working on the existing data. Examination of the data available on the well drilled by the previous operator confirms that it did not reach its target depth before it was abandoned. Drilling conditions appear to have been benign, as they generally are in southern Mongolia, and the abandonment seems to have been the result of equipment related and financial issues. The existing 2D seismic data is under review with indications of a large structure in the northeastern part of the block and this will be the subject of further work.

Mike Buck, CEO of Petro Matad, said:
“We are pleased to have agreed the amounts payable for Heron-1 production. We are working hard with PetroChina and the Mongolian authorities to get the first payment made and we look forward to a smooth monthly payment process thereafter. Meanwhile, our production operations continue and, as anticipated, after a period on natural flow, Heron 1 is now behaving more like the offset wells in the basin and artificial lift is now in operation. Although the pumped rate is lower than the rate on natural flow, we are pleased that the well is continuing to deliver and is doing so at a very low water cut.

We continue preparations for some low-cost well work for 2025 to support and potentially enhance production and Block VII appears to have some exciting potential. Our efforts to bring in partners are continuing in parallel.”

For Petro Matad it never rains but it pours, the invoice has not yet been paid by PetroChina, maybe the cheque is in the post…

With the Heron flowrates somewhat short of expectations the market has hit the shares very hard this morning, probably overdone but little scope to disappoint as we have found out. I’m sure that the evergreen Mike Buck will sort it out, I don’t know how he does it, really not.

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog