Hamburg

The Hamburg “GG” Slave Point 42º API sweet oil pool was discovered by Arcan in February 2006 at a depth of approximately 2,500 metres. seven wells have now been drilled in the pool: Arcan owns 50 percent in six wells and 100 percent in the seventh well drilled into the reef complex. The wells have been pipeline connected to market infrastructure. Arcan believes that these Slave Point oil wells have resulted in a significant oil discovery. Hamburg is generally only accessible in the winter.

Arcan applied and received approval for an enchanced recovery scheme from the EUB and commenced water injection in October 2007.  Arcan took control of operating the battery, implemented a water-flood scheme and drilled two (1.0 net) producing wells during the Q4, 2007 and Q1, 2008.

The Future

The biggest factor, is that Arcan is awaiting GPP approval to remove the current 100 (50 net) boe per day production restrictions off of 4 (2.5 net) productive wells.  Only 2 (1.0 net) wells have GPP at this point.

Arcan plans on drilling development / injector wells into the "GG" pool to continue to develop this pool to its maximum potential.

Arcan has three new Slave Point natural gas prospects that it could drill in the 2008/2009 winter drilling season based on availablitity of funds.  These wells would complement any development drilling in the “GG” pool, and would be described as high impact exploration. Arcan is also reviewing possible development of Bluesky natural gas discovered in the area.

Arcan plans to continue to explore for new Slave Point reefs in the Hamburg area. Management has over 20 years of experience drilling Slave Point targets in this area, achieving a 65 percent historical success ratio.