Stifel Nicolaus Presentation After listening to Ed Gilmet give his presentation I can see now why the SP has collapsed.
The points he made that stood out for me are:
* He warned that we could see a downward revision in 2012 avg production numbers should oil prices stay in the $75-$80 range.
* Currently that high rate well they drilled in Virginia Hills is producing at 400 bbls/d. Arcan has placed their VH lands up for sale - with bids due in later this month. Ed said land in that area are selling anywhere from $1 - $5 million per section, and that all proceeds from the sale will be used to pay down their debt.
* Crescent Point is still interested but under the present economic climate is not in any hurry to buy Arcan.
* Their priorities for second half of 2012 is paying down debt by disposing of non-core properties (Hamburg, Virginia Hills) including Stimsol, cut operating and G&A costs, and only spend within available cash flow. He expects op-costs will drop to $12/boe and G&A to $5/boe by year end.
* Only one drilling rig will be utilized for the remainder of the year. 5 high-profile wells have been drilled and are waiting completion tbd in July and August, which should enable Arcan to keep production levels above 6000 bbls/d for Q3 and Q4.
* 15 additional high-profile wells have been mapped, of which only 8 have been budgeted for drilling for the 2nd half of this year. Ed alluded that the amount of driling activity will depend on available cash-flow (ie. oil prices) which could ultimately result in a downward revision in production numbers for the year.
So things maybe are not as rosy as people would like to believe.