Arcan Resources Ltd ARNBF

RE: Logic

[tire9]

RBC Dec/03/2011  Partial on the research. I think they may double some of these numbers.

In our eyes,

Arcan’s oil wells appear to be among the most prolific in Western Canada, with a WTI

supply cost of US$45/bbl. Production could double again by mid-2012.

• NAV Accretion. Predicated upon ongoing drilling success, Arcan’s 220 identified drilling

locations should afford the company with ample drilling inventory for the next 5-10 years.

With none of these locations contained within its reserve bookings, Arcan’s reserve base

has the potential to show annual growth of 25%+ per-share over the next several years.

• 90% Oil Weighting. With a 90% crude oil production weighting, Arcan’s cash flows are

highly sensitive to world oil prices. Inclusive of its hedges, a US$10/bbl increase in WTI

prices impacts our 2011 CFPS outlook by 10% and our NAV by 14% (
.32 per share).