CALGARY, ALBERTA--(Marketwire - Dec. 4, 2012) - Arcan Resources Ltd. ("Arcan") (TSX VENTURE:ARN) announces that it has entered into farm-out agreements with PetroBakken Energy Ltd. ("PetroBakken") whereby PetroBakken will earn up to 21.5 (11.25 net) sections of land by drilling five commitment wells and two option wells. Arcan has also been made aware that PetroBakken has acquired a total of 16,605,900 common shares of Arcan through market purchases, which represents approximately 17% of the total issued and outstanding common shares of Arcan on a non-diluted basis.
Management views the interest shown by PetroBakken in purchasing Arcan shares, together with the farm-outs and other transactions relating to the Beaverhill Lake light oil resource play announced in PetroBakken's news release issued on December 3, 2012, as providing further evidence of the significant light oil development potential in the Beaverhill Lake zone in the Swan Hills area. Arcan does not plan to make any changes to its current operation or growth plans as a result of PetroBakken's announcement.
Arcan's activities are focused on developing the large light oil resource in the Swan Hills area. Over the last 18 months Arcan has transformed more than 60 square miles of undeveloped land into a large development inventory of drill-ready locations within a proven oil reservoir. This development is now supported by an infrastructure corridor consisting of roads, pipelines, and facilities. Arcan's investment in key infrastructure has resulted in reduced development capital requirements on a recently drilled well, declining operating costs and significant response from an enhanced oil recovery program in the early stages of the field production.
In line with its strategic direction, Arcan plans to manage capital within its existing cash flow stream for the first half of 2013 and to further reduce operating costs as the benefits of completed infrastructure investments are realized. Management continues to look strategically at all of Arcan's assets, and will consider all opportunities for development and acceleration as they arise. One avenue, farm-out agreements, provide for capital-efficient development on areas of Arcan's land base that would not otherwise have been developed in the near term.
Arcan holds a multi-year inventory of low-risk drilling opportunities targeting light sweet oil plays. The Corporation is planning further drilling focused on higher impact production results and continued application of the waterflood process on core properties. Arcan will continue to implement changes that provide for a stable financial base, maximize shareholder value and provide secure growth per share.
Arcan Resources Ltd. is an Alberta, Canada corporation that is principally engaged in the exploration, development and acquisition of petroleum and natural gas located in Canada's Western Sedimentary Basin.
Forward-Looking Information and Statements
This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words ''continue'', ''will'', ''project'', ''plans'', "provide" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this press release contains forward-looking information and statements pertaining to, among other things, the following: Arcan's plans to bring its capital spending more in line with its cash flow; Arcan's plans to further reduce operating costs; Arcan's expectations regarding the benefits to be realized from infrastructure investments and the completion of the same; Arcan's plans to consider all opportunities for development and acceleration; Arcan's plans for further drilling activities; and Arcan's plans to implement changes that will provide for a stable financial base, the maximization of shareholder value and provide secure growth per share.
The forward-looking information and statements contained in this press release reflect several material factors and expectations and assumptions of Arcan including, without limitation: that Arcan will continue to conduct its operations in a manner consistent with past operations; the accuracy of current horizontal production data, historical well production and waterflood results; the general continuance of current or, where applicable, assumed industry conditions; continuity of reservoir conditions across Arcan's Swan Hills land base; the continued availability of cash flow and/or debt and equity sources to fund Arcan's capital and operating requirements as needed; Arcan's 2013 capital budget and strategic business plans; the continuance of existing and, in certain circumstances, proposed tax and royalty regimes; the accuracy of the estimates of Arcan's reserve volumes; and certain commodity price and other cost assumptions.
Arcan believes the material factors, expectations and assumptions reflected in the forward-looking information and statements are reasonable at this time but no assurance can be given that these factors, expectations and assumptions will prove to be correct. The forward-looking information and statements included in this press release are not guarantees of future performance and should not be unduly relied upon. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements including, without limitation: for reasons currently unanticipated, Arcan's production rates may not increase in the manner currently expected; the application and modification of horizontal, multi-stage fracture technologies including the application of additional fracture stimulation stages may not have the impact currently anticipated by Arcan; Arcan's capital spending and operational plans for 2012 and 2013 as well as its plans to reduce operating expenses may not be completed in the timelines anticipated or in the manner anticipated and the execution of such plans and reductions may not have the results currently anticipated by Arcan; the current drilling locations identified by Arcan may prove to be unsuitable or unavailable and drilling on the locations identified may not occur; increased costs and expenses; should any one of a number of issues arise, Arcan may find it necessary to alter its current business strategy and/or capital expenditure program; and certain other risks detailed from time to time in Arcan's public disclosure documents including, without limitation, those risks identified in this press release, and in Arcan's annual information form for the year ended December 31, 2011, copies of which are available on Arcan's SEDAR profile at www.sedar.com.
The forward-looking information and statements contained in this press release speak only as of the date of this press release, and Arcan does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws.