Acquisitions Catalyst Once this merger is digested, ARC is going to use Tourmalines' play book.
1) Increased share price offers value in cash + share deals, so there is a vested interest by the institutional community to commit support capital into the story.
2) Access to investment grade debt affords newARC the opportunity to consolidate poor balance sheet companies with great assets.
3) Define three core areas and exploit them fully, while divesting non-core areas for cash and optionality. *divest Pembina production/assets
That being considered...
a) Crew Energy would tuck in nicely, it checks all the boxes. Debt coming due March 14 2024, paying on $300MM at 6.5%. Assets in one of ARCs key areas Upper West Montney , plus 30,000+ acres in Attachie. Enterprise Value a little high for under 30kbpd, but it's a great fit and divest the Lloyd assets.
b) Velvet Energy - There was a bunch of talk about Spartan Delta taking these guys out or buying a big stake with the Russian Oligarch backed fund; however, I think part of the reason why this went quiet is that CPP has a big stake in Velvet, and they would prefer to get rolled up into newARC instead of Spartan. Same play book as Seven Gen. Consolidating Velvet checks a lot of boxes.
c) Hammerhead Resources - This is a bigger stretch, but still checks a lot of boxes.
Food for thought, but I think ARC is going to use the momentum of a slam dunk merger to get competitive as the consolidation wave heats up further.
My opinions only.