Arcan Resources Ltd ARNBF

RE:RE:RE:RE:RE:Everything is honky dory

[nlr2]

No problem, just wish that they would have made the change earlier. That to me is the big postive, I don't think that Arcan could be ran any worse than under Gilmet. To go from having basically no debt and the proceeds of both debenture offerings to having 300 and some million in debt and less production is mind boggling. I admit that I have held Arcan from a much higher point and tried to defend them and make predictions, which always failed. The issue was that the well costs were too high and the well performance inadequate. I added at a dollar as I though that even with the problems there was fundemental value, then I added again just recently after the year end. Its clearly a play built on one thing, a takeover. They have two years to prepare for the first debenture so they need to prove that the waterflood works and that the wells are performing better to attract a suitor. Have they done this? I'd say yes. Ethel waterflood is at 1400 Boe/d and will be more with the addition of the new injectors and producers. Are the wells better? I'd say yes. The results from the winter program and Lightstream indicate that productivity has increased. If they exited Q1 at over 4000 BOE/D that indicates to me that an acquiror, with capital to spend, could easily increase production dramatically. Arcan unfortunately does not have this ability at the current time. If I were Arcan management I'd look to Anderson for an example of how to unwind a horrible debt posisiton. If they could keep the core North Ethel posistion and sell Deer Mountian, Morse unit and maybe Farm out some of Ethel they could do the same thing. But I'm an optimist and I have yet to be rewarded. Haha. What can you do I guess.