ARC Resources Ltd T.ARX

Kakwa is Happening

[MyHoneyPot]

I was with a Friend on the weekend and we discuss some of the big happenings/projects in the patch and he mentioned two to me.

TOU - they are in the process of Eng the build of a 800 Mmcf gas plant, that all i will say and will not say where it is, but a lot of you may already know, however this is HUGE.

With this plant TOU looking is projecting that will add 800 Mmcf from one project, ARX needs to accelerate to maintain its ranking, as i expect there is a need for more Canadian Energy in the world. 

Scale is relevent and if you listen to Mike Rose all he talks about is scale, i don't see ARX doing much that would be of the same scale TOU is pursuing. 

However they are ramping up Kakwa, and i do know work in going on there, i have confirmed what shaleguy has reported, there is some scaling up going on there. Better late than never, but ARX is finally scaling up the Kakwa area.

When you look at ARX play areas there is a lot of postage stamp type plays, very small, and lumped together for reporting purposes, we need people with a bigger vision. 

The big that will plague ARX is lack of Management and Vision. Sry but that is just the way it is. They not business people, and they don't have a vision, expect for attachie and that is 7 years old and still not sanctioned, a pretty poor example if getting things done. 

IMHO

[GunnerG]

Amazing how management has taken what you have been talking about for the last year and started to follow up on it.  Is it them listening to you or are they just managing the company as they should?  Nice to see VII has been brought into the fold with great efficiencies with the exception of the poor hedges (out ot their control).  Apparently they had the vision to go after VII. I

[MyHoneyPot]

I am sorry, but i guess that you have to let the facts speak for themselves. Fact 1 A company with the largest hedging losses in the entire patch, is realy a good example of what not to do, and the fabrication by the posters that those hedges were all in place I no their wrong, show me facts, stop with the lip service.  Fact 2 Kakwa had a history of 240,000 boe/day of production, and it

[GunnerG]

You are going to love this post.  Forgot to mention on your comment about scale is relevent and ARC needs to steip it up.  Didn't management improve the scale immensely with the VII combination; albeit with some warts that you harp on as if it was current managements decisions. Fact 1  VII carry overs.  Given the massive increase in prices, how many companies are making

[Trapped]

Funny how facts work, isn't it? Someone with a mean-on for management (perhaps a wannabe CEO who got passed over for a job or three) can use them to perpetuate his unhealthy fixation.  Thanks Gunner for setting the record straight. Cheers and GLTA ARX longs.

[MyHoneyPot]

Gunner, most of that i will accepte as fair, just from memory i believe they production more than 220,000 boe/day one quarter, but they have significant plant capacity field buildout and upside.  The hedges, i don't really buy all these excuses, and have see other companies manage it a lot better.  I think they were hoping to fund their 7 year pet project attachie, however that is

[Volkomm]

I've brought up the Kakwa discussion with a few people I follow on twitter and many of their responses has been the acreage. Does Arc have enough land to keep production that high without drilling through their inventory in 5 years? Or whatever that number may be. I think we all agree that having all their plays at max capacity is what management should be driving towards. Hedges are what

[GunnerG]

Thank you for accepting it as fair.  Maybe you were thinking 204,000 boe/d instead of 240,000 before VII mgmt decided to pull back on production. IMO, no oil or gas company is going to make the mistake of ramping up production to only over produce and send prices falling.  We have been through that cycle for 4-5 years, with the greens wanting us to die no matter what happens. Make tons

[GunnerG]

MHP, you avoided my question about oil and gas companies hedging at today's prices. Lets hear your moves today if you had to make the choice of heding.  We can replay them in six months - a year's time. Include what % of production you would hedge as well.

[MyHoneyPot]

So this is kind of right off the top of my head Gunner, and i really think the hedging strategy most of the time is a responce to debt levels on the balance sheet. I would eliminate that concern, and just move debt to under a billion dollars. Providing lots of room, for lots of flexibility, and poised for opportunity. If prices don't meet you return objectives and your balance sheet is

[Quintessential1]

If mangement believes the shareprice in the current environment is going to head north of $20 and approach $25 this year is the cash not better spent on buying back as many shares as possible when the share price is dipping or lagging and then paying off debt with what is leftover as the NCIB only allows for so much share repurchasing at a given time? Divividends can be increased at the end of

[GunnerG]

From 2021 Annual Report: "We exited the year with a 0.8 times net debt to annualized funds from operations ratio, coming in below our targeted range of 1.0 to 1.5 times. We also achieved an investment-grade credit rating – a reflection of the underlying strength and profitability of our business." Quote from the April 2022 presentation: "With ARC’s debt targets achieved, returns

[Quintessential1]

Thanks.  Buybacks and divies it is then.  If they wanted to do a one time special dividend to possibly reward those of us that hung on when it was cut, that wouldn't bother me a bit but mostly I would like to see a nice increase and return to monthly dividends. I also still think buybacks are good and the more shares they buyback now the less dividends they have to pay out in

[Sunsurfer12]

Mostly agree with MHP...although my view is much simpler..you only hedge: 1) Capital - hedge cost base recovery..not profits or returns..agree quarterly rolloffs and not bought all at one time..lioke MHP thought of gradually building a 2 yr hedge quarter by quarter 2) Debt Servicing - agree that based on todays debt level no real requirement for any more hedging to protect debt servicing as its

[GunnerG]

MHP, you mentioned the 240,00 number on April 17, 2022 and I corrected your so called "fact" filled post with real facts.  You have a terrible memory.  Check out the "Fact 2" response.  You actually agreed in a follow up post, LOL.

[Quintessential1]

Natural Gas prices have over doubled in the last year and their is no sign of them going down or slowing down given demand.  The NG in the ground is money in the bank this year because of the European demand caused by the Ukraine war, Russian sanctions and low production in Europe. Only one of these events was foreseeable and it took all three to create this kind of demand leading to this