Arcan Resources Ltd ARNBF

Arcan stock is

[hardeehar]

..at a 50% loss since that strategic restructuring announcement.  

What a punch in the gut this is..and just when the stock was showing some life.  
It looks like Arcan won't be satisfied until they squeeze every last bit of life out of the company.

What a complete FUBAR!

[skeksis]

I bought some more today.  Didn't get any at the all time low (hard to do with ARNBF), but reduced my cost average a bit.  I don't understand who would sell at 22 cents.   The way I figure it, the common was valued at 50 cents prior to the announcement.  If the transaction fails, we are back where we started and there are still two years before the first debenture

[jd43xl]

If the transaction fails, the debt holders could call it in, and common shareholders would get nothing. You have no idea what you are buying.

[skeksis]

I think you do not understand what unsecured debt is.

[teevee]

Agreed. That is why I believe debenture holders will take their $.825 and run, or are simply selling into the market now rather than risk the deal not going through. The bs here on valuations supporting 100% coverage of debentures is laughable. Shareholders will be onside, other than perhaps CPG and LTS. IF CPG and LTS kill this deal, then I expect the share price to lanquish ever lower, and the

[jd43xl]

Unsecured debt ranks above the common shares, Einstein.

[skeksis]

I know, and your reply is a non-sequitur.  You just speculated that the debt holders would call the debt if this transaction does not go through.  The debenture holders have some recourse in the event Arcan does not make interest payments on time or fails to pay them their principal in cash or shares at maturity.  However, they do not have the ability to foreclose on the company any

[teevee]

I prefer to simplify the situation: Clearly, servicing bank debt and debentures does not leave sufficient free cash flow available to grow production. ARN has been treading water for a few years now, and in two years, ARN doesn't have the ability to pay out the debentures.  I believe market value is $60/flowing barrel tops. If ARN sold the property, the bank gets paid, and the debenture

[skeksis]

I agree with most of your points except market value being $60k per flowing barrel. That sounds like what you would expect from a gas-weighed transaction.  Arcan is a light oil company with high operating netbacks (especially at current spot prices).  Spartan energy just bought production with similar or worse netbacks for north of $100k per flowing barrel.  All of CPG's recent

[jd43xl]

And yet they spend all of their cash flow just to maintain production? You don't have a clue how to value an oil producer.

[mombasa1]

Jd43xl wrote: ..On second thought Who cares what jd43xl wrote. Loser