Arcan will continue to shift to a program of sustainable growth, supported by a strengthened balance sheet and focused cost reductions. Arcan continues to take a measured approach to capital investment focused on capital efficiencies where higher capital spending during the winter months is followed by a curtailment of capital during times when access is only possible at an increased cost. Arcan estimates that using a more measured approach to capital spending will allow for wells to be drilled, completed, and tied-in at a cost of $4.5 million to $5.0 million. The 2013 drilling program will focus on high graded locations throughout Arcan's land base with the balance of the capital program targeting production constraints and the expansion of the waterflood process. To secure the capital program and cash flow Arcan is hedged at 2,000 barrels per day for all of 2013 and 2014 at approximately $100.00 and $93.00 West Texas Intermediate, respectively.
Arcan will continue its efforts to control committed capital and the pace of its development. This is expected to ensure that the Corporation can continue financially sustainable growth and efficient deployment of capital. The changing capital market environment is driving Arcan to make operational adjustments as well. The recently announced farm-outs to PetroBakken Energy Ltd. provide for capital-efficient development on areas stretching across Arcan's land base that would not otherwise have been developed in the near term. Arcan will continue to implement changes that provide for a stable financial base, maximize shareholder value and provide secure growth per share as Arcan transitions to a more efficient oil producer positioned for long term success. Holding a large multi-year light oil development inventory, Arcan's management continues to look strategically at all of Arcan's assets and will consider all opportunities for development and acceleration as they arise.
Arcan recently launched its new website at www.arcanres.com. The website has been redesigned and features improved functionality to enhance the quality of the Corporation's disclosure. The new website contains standard disclosure materials, including information explaining the waterflood secondary recovery technique, news releases, financial documents and presentations, as well as supplemental information for the benefit of the investment community. Information is expected to be added shortly to include a new corporate presentation and a question and answer document that addresses some of the questions that Arcan's management frequently receive.
About Arcan Resources Ltd.
Arcan Resources Ltd. is an Alberta, Canada corporation that is engaged in the production, development, exploration and acquisition of petroleum and natural gas located in Canada's Western Sedimentary Basin.
Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet ("Mcf") of natural gas to one barrel ("bbl") of oil is based on an energy equivalency conversion primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalent of six to one, utilizing a boe conversion ratio of 6 Mcf : 1 bbl would be misleading as an indication of value.
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