ARC Q3 2023 vs Q3 2021I decided to analyse ARC's Q3 2023 results vs Q3 2021. I didn't look at commodity prices because that is outside of the company's control pretty much. Here's what I found:
#1 production is up from 353,657 to 360,177 or 2% in 2 years. Kakwa increased from 186K to 199K, at the expense of Greater Dawson. Nonetheless, oil and condensate % declined a little which is consistent with most plays of this type: if production is not increased, the oil and condensate % will decrease. Same thing happening at Pioneer. Something to keep an eye on.
#2 operating expenses increased from 116.6M to 163.6M. Unexplained.
#3 G&A increased from 28.1M to 33.4M. shared based compensation increased from 12.4M to 34.3M. Interest decreased from 59.2M to 27.1M. A little decrease overall.
#4 Capex increased from 268.4M to 401.4M. The 2023 Attachie capex budget is $240M - the company has not disclosed how much they have actually spent YTD or in Q3 for that matter on Attachie. They have been spending ~$11 capex to maintain production at the current level.
#5 $160M taxes in 2023 YTD vs $47M in 2021. Becoming a substantial expense.
#6 2024 capex budget:
They are letting Kakwa slide to 175,000 boepd, Sunrise otoho is projected to increase to 59,000 (from 51,000) boepd. It will be quite a feat to control non Attachie capex to $1B or so while essentially maintaining oil and condensate bpd. There won't be any contribution from Attachie in 2024 even though they are spending $600MM there.
Overall ok not that great. Lots of question marks. Glad I did this.
Full disclosure: I own 1,000 shares of ARX and won't sell as I'm in a tax gain position but won't add either.