ARC Resources Ltd T.ARX

Thank You MyHoneyPot

[MyHoneyPot]

I have had a lot of communication with ARC management regarding their Hedging, they are going to change their strategy. Even Trapped has jumped on the band wagon and is talking about the hedges rolling off. 

Confrence Call
listening to the conference call it appears that ARC has decided that it will review its risk mitigation strategy (Hedging) and go away from the current dismal strategy of destroying shareholder value with a very poorly executed hedging strategy.  Based on what I can see is that they have not layered on any additional money losing hedges to their current hedge book, so the shareholders are safe for the time being.

Example 2021
Swap 10479 boe $46.90 U.S
.
However, as an example of one bad hedge, in 2022 they hedged 10479 boe of oil at $46.90 that hedge by itself in an 80-dollar U.S. oil environment cost about 35 dollars a boe with royalties, and 134 million dollars U.S. in lost CF or about 165 million dollars Canadian. This on bad hedge cost the shareholders a full year of divided returns at 6.6 cents a quarter, and more than 2 quarters of dividends at 10 cents a share.
The company does not realize that they are no long a small dry gas producer, and when you get to this kind of scale, shareholder invest in energy stocks so they can participate in the upside of a commodity cycle. When there is no upside because of risk management why invest in the stock.

Ceiling 23767 $60.52

The ceiling they put on 23767 boe of oil at $60.52 is $7.21 U.S. higher than you are getting in 2021 and will add about 212 thousand dollars a day Canadian to the cash flow, and 77 million dollars to the yearly cash flow.

Hopefully the company has learnt its lesson, however shareholders will still be feeling the pain in 2023, and it 2024 will be the remnants of this flaw management strategy.

IMHO

[Cheadle12]

Yes, the dysmal VII management certainly left the Arc Mgmt in a tough spot with the terrible hedges the Seven Generations Team left them. Well, good riddance to VII, ARX mgmt is cleaning up their mess and now left with great assets, and hedges rolling off. Bravo Arc Mgmt, much better job than VII mgmt, hence why Marty & team were all packaged out and layed off.

[Robertboblaw]

Also, this is completely and utterly false. Arc's MGMT enetered into the current hedging mess WELL AFTER the VII takeover. Dont believe me, go and dig out the Q1 Arc press release and take a look at those hedges (or lack thereof). Also, dig out the Q4 2020 VII results release. see any oil/condy hedges for 2022 there?? Nope. These are baseless claims. GLTA

[MyHoneyPot]

Regarding the hedges, Your 100 correct Robertboblaw, you can go back and review VII Generations 4th Quater. I also went back and review ARC first quater, this entire mess was created by the current ARC management, and 2022 is a bit of a relief but 2023 is still ugly and 2024 was simply just giving the share holders money away. A product of failed thinking that they have not abandoned. 

[Beakr123]

Poor attempt to redeem yourself and save face. Your an embarrassment MHP get outta here.

[MyHoneyPot]

Finally Management is saying what i have  been saying all along.  Jump in the Lake! IMHO

[Quintessential1]

I am loving the pain that ARC's mangement is inflicting on me. For next quarter: Hit Me Baby One More Time!