McLeod

Arcan’s McLeod core area offers medium-risk, natural gas targets largely focused in Cretaceous / Jurassic aged strata. The Company has drilled seven (5.6 net) natural gas wells with 90 percent success at McLeod.  five (4.1 net) of these wells are on production.

The Future

Arcan has a large inventory of prospects developed by its two geologists. These geologists have worked the McLeod area for over 15 years each and have drilled in excess of 300 wells. Arcan competes in the area by farming-in or acquiring lands only after it has developed drill-ready prospects. This approach allows Arcan to be selective about its land acquisition.

Arcan is also pursuing deeper, higher-impact targets in the area. Arcan restricted capital in this area for 2007 and the first half of 2008, to focus on oil development prospects, but is planning on increasing focus in this area over the balance of 2008 and into 2009.