Arcan Resources Ltd ARNBF

Up 9% so far on low volume

[hardeehar]

For whatever reason people are holding on to their Arcan shares.

The stock is showing strong upside elasticity here.  It looks like it won't take much buying for it to move up significantly from these 50 cent levels.

One scenario to eliminate Arcan's debentures overhang (that I recall a previous poster had postulated) is selling DM2 and possibly some other associated smaller properties in a package deal.  From speaking with mgmt at their AGM I found out that DM2 still has 2-3 high-impact wells left to be drilled before reaching full development.  They also said that revised well completion techniques have been showing significant IP production gains and slower declines over previous methods.  Their water-flood program is also fully developed and showing continuous improvement over time.

Add it all up and your looking at a growing, long-life, light-sweet crude asset with all the required infrastructure in place to support secondary recovery.      

With the added bonus of those 2-3 high-impact wells still left to be drilled at DM2 I believe  Arcan is setting DM2 up to be a prime acquisition for the likes of either Crescent Point or Petrobakken.  

At the AGM Arcan reiterated their expectation that DM2 will top out at a minimum of 2000 bbls/d when fully developed under waterflood.  What would that be worth to a potential buyer?  Given the $$millions$$ already spent on infrasture I suspect DM2 would fetch top-dollar - especially now with oil prices over $100 and not showing much sign of letting up.

IMO the sale of DM2 would give Arcan all the money they need to cover their debenture obligations, which in turn would light a fire under the SP.

Its all pointing to a sale of DM2 IMHO, and this would be a perfect time for Arcan to execute it, and a perfect time to be loading up on stock for a potential double bagger from these levels.

JMHO & GLTA