Lightstream Resources Ltd. LSTMF

RE:Arcan Is Way Over-Valued Compared To LTS

[nlr2]

Ya these are fair points for sure. If LTS used Arcan's most recent production figure of 4500 boe/d then what would the metrics be? Also they would be getting a deal on a reserve and NAV basis. So I think they could, if they wanted, dress the deal up to look like they got value. 

The point of the deal is not to acquire production at a reasonable price but instead to lock up LTS' future growth area. Wright already did it with the Result and Berens transactions to get into the Cardium. The metrics he paid for those were out of control, way worse than what Arcan would be. 

Arcan is a broken company but the assets have fundemental value and 2/3rds of the debt is convertible so its a bit different than just having straight bank debt. I guess I hold it for the same reason LTS shareholders hold their shares, there are better companies out there, like CPG, but there is value in place that could be realized for a large gain.... or a crippingling slide into bankruptcy. It looks like Lightstream has turned the corner so if they did buy ARN I'd be more than happy to hold the shares.

Thanks for the responses, they have all been interesting and well thought out.