Arrow Exploration announces fundraising and publication of AIM admission document

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Arrow Exploration Corp.said it has conditionally raised approximately GBP8.8 million (C$15.0 million), through a placing and subscription for new common shares with new investors including Canacol Energy Ltd (TSX:CNE) and executive management as it prepares to list on the London Stock Exchange’s AIM market.


The Colombia-focused oil exploration company said net proceeds of the fundraising will help fund the drilling of two wells at Rio Cravo Este, starting by the end of 2021, and will be deployed in drilling the Carrizales Norte-1 exploration well. Funds will also be used to repay approximately US$3.15 million of Canacol’s promissory note with the company, it said.


Arrow Exploration said it is also publishing an AIM admission document ahead of its AIM listing on October 25 under the code AXL. It will maintain its listing on the TSX Venture Exchange.


READ: Arrow Exploration reports second-quarter financials showing positive cash position of $4.6 million as of June 30, 2021


The fundraising comprises a placing and subscription of 140,949,545 new common shares at an issue price of 6.25p per new common share.


Executive management invested approximately GBP0.83 million, while Canacol will hold 19.9% of the enlarged share capital at AIM admission.


The investors will receive one warrant for every two fundraising shares, exercisable at 9p per new common share for 24 months from AIM admission.


The fundraising price represents a discount of approximately 24.2% to the company’s closing share price on the TSX-V preceding the pricing of the fundraising and gives it a market capitalisation of GBP13.1 million.


Following admission to AIM, the company plans to raise up to an additional C$500,000 by way of a non-brokered private placement in Canada. The private placement is expected to be conducted at the same price as the fundraising and is expected to close in late October 2021 or early November. The net proceeds from the private placement will also be applied towards its work program.


“We are very pleased with the results of the fundraising, and we look forward to our AIM admission and to closing the additional private placement in the near-term,” chairman and CEO Marshall Abbott said in a statement.


“This fundraising, together with our current cash position which exceeds US$5 million, plus our cash-flow generative production in Colombia, means that Arrow will be well-positioned to execute on its work programme as well as the near-term tie-in of the 3-26 West Pepper gas well in Alberta, Canada as previously announced.”


Arrow Exploration operates in Colombia via a branch of its 100% owned subsidiary Carrao Energy S.A. The company has a portfolio of premier Colombian oil assets that are under-exploited, under-explored and offer high potential growth.


The company’s business plan is to expand oil production from some of Colombia’s most active basins, including the Llanos, Middle Magdalena Valley (MMV) and Putumayo Basin. The asset base is predominantly operated with high working interests, and the Brent-linked light oil pricing exposure combines with low royalties to yield attractive potential operating margins.


The company’s 50% interest in the Tapir Block is contingent on the assignment by Ecopetrol SA of such interest to Arrow.


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