RE: RE: Eric Nutball I think ARN gets bought out. Just my opinion. First year average per well would be much more then 100 bpd, it exits at roughly that but to get the true average you would take the cumulative production add it up then divide per days under production. In the life of a well you will get 250,000 barrels of oil before waterflood. So each well is economically sound. Since ARN doesn't care about investors the best source to use to illustrate this would be SCS latest op update, I think we have lower IP's but it would be generally true from company to company.
So the closest well example that I could find is SCS 1-5 well which from August 20- December 16 started at 650 declined to 240 and produced a total of 33,000 barrels which if it stopped pumping would give an average of 90 bpd for the whole calendar year. Clearly it didnt so the average would be far higher then 100, the average doesnt matter really as the well is enjoying a royalty holiday and will return the capital rapidly. Thats the big thing is the quick payout.
Once Arcan has the infastructure in place that they are currently installing our bloated costs will come down and they will be able to find some sort of internal equilibrium. I just have to say with the way this company is spending I think its got to be to build value as quick as possible before takeout. Good40 you always ask people to talk to you when they create a sustainable buisness model for Arcan and I think that is the plan. Rapid, unsustainable growth to boost reserves, infastructure and production as fast as possible. People can't come up with a plan cause there is no plan beyond a year tops. Another company like this is Pinecrest. Everyone loves them so they can raise money whenever and they spend it all on drilling and land. Why? Because they know they will be bought out and can always get more if need be because everyone loves the carbonates.
If it is announced that Crescent Point buys Wildstream tomorrow then that could perhaps change Arcan's plans going forward. Really its all guess work till we get the well results and guidance.