Arcan Resources Ltd ARNBF

Mobility

[tire9]

All weather road thru the Ethel pool and pipelines to the new (proposed)  20,000 bbl/day battery at S16-T67-R8 will increase profits as the field is being developed.

In August Arcan received approval for water injection in the Ethel area. Wells are currently being converted to water injectors and water handling facilities are currently being constructed in order to commence water injection. The company has also received regulatory approval for the initial phase of the Ethel pipeline system that will allow production in the Ethel oil pool to be transported to the Arcan Deer Mountain Unit #2 oil facility. This pipeline infrastructure is expected to be completed in order to reduce operating expenses in the next phase of the Ethel pool development. In addition to the pipeline, the Corporation is nearing completion of a high grade road system that will connect the Deer Mountain Unit #2 through the Ethel property into its Morse River Unit #1. This infrastructure development will enable resources and services to move more efficiently throughout the asset base and reduce operating expenses.