Arcan Resources Ltd ARNBF

Next steps

[opg210]

I had a friend of mine, an excellent geologist, do some digging on Accumap or Geoscout, to see what might be next for Arcan. I think the key to their ultimate success in this area is how far south they can go on their lands, and still get similar results. All the HZs that they've drilled or are drilling are in the north end of the package, so they are proving that this new technology can unlock those reserves. The big test is 5-34 in T 67, and any wells drilled subsequently to the south. If those work, there is a lot of space in between that can be drilled up.
My friend did a bit of analysis on a well at 4-22-67-8, a Celtic well. It has something like 9m of net pay with a 3% porosity cutoff. The well has produced at low rates for quite a while, and looks like it has at least 4 million bbls OOIP, or perhaps higher. This is only a few miles south of 5-34, but does give a good indication that the zone is still relatively healthy there. The big question is whether multi-stage fracs will help a lot more oil or just a little in this area. If ARN could go HZ on one of these wells in this area and show some good results, that would be a fantastic day for ARN.
If results from 5-34 are good and stay that way for a while, then that means ARN has maybe 20-30 sections that can be drilled up with relative certainty. A good result should add a lot of value per share. Each step out to the south that works will prove up a lot more oil. Results from the current drilling program could certainly validate a higher share price, however good (and sustained) results 5 miles south of 5-34 would lead to a MUCH higher valuation. 
So for now, watch for good results on 5-34. After that, it will take drilling further south to find out if ARN is going to really get to the promised land.
By the way, anyone worried about the price action over the past week or so, please check DEE. the chart is almost identical, meaning the recent market action has nothing to do with ARN but rather with some party or parties dealing with junior oils in a similar manner.
Thoughts/critiques welcome; that is the point and benefit of these boards!
opg210