Arcan Resources Ltd ARNBF

RE:RE:RE:RE:potential investor; insight requested

[mombasa1]

Here are a couple more points to add to your analysis nlr2.  Arcan's debt is unsustainable long term. They will have to address it sooner than later, so IMO the sale of DM2 is not an option.  THAT will be the key to unlocking Arcan's share price IMHO.  The stock will move over $1 on news of the DM2 sale alone, and it definitely appears to be headed that way now.

I also believe Arcan will be able to replicate the drilling results from last winter's program.  The Swan Hills fairway has proven to be predictable, repeatable and scalable, so I have little doubt Arcan has refined their drilling & completions programs over the years (with possible help from LTS) in improving well flow rates.

Once Arcan sells DM2 and pays off the 1st series DB's and 1/3 of the bank debt, that will take a BIG load off the company and the stock.  With waterflood expansion and response continuing to improve at Ethel, Arcan should easily be able to grow production back over 3,000 bbls/d and beyond while staying within spending limits.

If things go according to plan Arcan will be perfectly positioned by the end of this year having:

1. 90+% pipelines & infrastucture in place.
2. Declining costs - especially the BIG savings in interest charges from carrying a lot less debt.
3. A growing production environment - FINALLY!  This has not happened in 3 years.
4. The benefit of waterflood in providing a stable, sustainable production base to grow from.

Under the above scenario the sky is the limit IMO.