Cash Generation Supreme..... This was a great quater and 300 million in FCF with the average condensate price of around (58 US) for the first quater.
Roughly 100,000 boe of condensate and oil for for every 1 dollar US increase in oil it likely means
(100,000 *91 day) / .82 = 11 million dollars a quater, so say another 10 million add to FCF to be conservative.
If oil trades at 65 dollars add roughly between 50-60 million dollars to a quater. Hedges will reduce that number a bit but you get the idea. (1.4 billion a year FCF)
What i am worried about is starting another capital project costing 600-800 million dollars while the shares are trading in my opinion at less than what they should be, will this not prolong ARX getting a fully valued share price, and will it take away the opportunity to use the shares as currency in any other acquisitions?
Last quater was a nice reduction in debt, next quater it will be even better. The is no rush for Attachie is there? especially when you have Kakwa that has historically produced 220,000 boe a day, with plant, optimized, proven, 10B in reserves, with no risk and proven economics starving for more capital.Kakwa is 1/2 cycle economics, Attachie requires full cycle investment.
I have hoping that waiting a bit will all the fog to clear, and allow management to see and understand the pathway to the best value creation path for the company.
IMHO