Arcan Resources Ltd ARNBF

Coral Hill activity

[opg210]

I received a presentation through the grapevine for an equity issue by Coral Hills. They give some detailed maps of their Beaverhill Lake plays. They have amassed a ton of acreage in the Swan Hills area (78,000 acres on the platform and >100,000 acres in the area). Their lands include quite a few sections immediately to the north and south of Arcan's land block, and a bit on the SE portion of Arcan's block.
According to their presentation,they are chasing the Coral zone, which appears to be in the lower part of the Swan Hills platform. I don't know if that differs from Arcan's stuff, but if it does Arcan has those rights too. The wells CH has drilled so far have been absolute boomers (as i noted a while back), far exceeding Arcan's performance. 
They are raising $40 million at $5.85 a share. I have no idea what their price history is to date but I'm sure their previous equity offerings were for far less than that. Curiously, First Energy is the lead agent - no honour in that industry, unless their low ARN price targets are solely attributable to what they think of management. But then again if you believe in the value of the lands, you have to think a takeout is a likely prospect.
At any rate, good to see such an agressive new participant in the area. If drilling results for all these other parties continue, that will only add value to Arcan's land base. It seems obvious now that competitor success isn't adding anything to Arcan's share value, so ARN has to get their production act together before we see any good action. I'm still not as enthusiastic as I used to be, but if PGF, PWT, CH and Apache keep having success, then the likelihood of a takeover sooner rather than later still seems probable. I guess a sticking point might be when ARN decides to throw in the towel; they're on record as saying they want to build an intermediate size company so their ego might stand in the way of a takeover offer (these things are rarely hostile).
opg210