Arcan Resources Ltd ARNBF

RE: RE: Take over

[rockman998]

Interesting combination, however, as I previously stated ARN debt eliminates them from the profile CPG is looking for. However, PBN and CPG merger? When CPG had production of 60,000 barrels per day a couple of years ago their cap was 225M shares. Since then they have issued 125m shares to raise approx. $5B for acquisitions which have netted them 50,000 barrels per day of production. I think this has involved approximately 10-12 takeovers. The price works out to $80k -$100k per flowing barrel which once CPG own the assets the value jumps to $140k per flowing barrel. PBN is presently trading for $72k per flowing barrel. So it might have been simpler to buy PBN. CPG will tell you that their acquisitions complimented their existing land packages and was not soley based on price. CPG's Bakken lands are better quality than PBN with better access, and CPG management is much better. The merger of the two is still interesting because it would instantly move CPG to 150k barrels per day. It would be a merger of one of the best middle cap canadian oil companies with one of the worst run mid cap oil companies.

ARN needs to do an equity issue. They need a min $ 50m to kick the debt can down the road but $ 100m would really get them on the path to recovery. A week ago I would have said an equity issue was impossible for this company but the farm in seems to have given them some legs. If they could some how get the share price to the $2 range and issue 50m shares they would be in good shape. However those terms in this market are unlikely. 50m shares at $1.25 is more likely in the new year.