RE:RE:ARC Resources 18-063-03W6/00 KAKWA TRmontney (10-OCT -20)I am looking forward to seeing the massive hedging looses our part time CFO has incurred.
Following that i will want to see how much of the future upside the CFO has hedged away because he is projecting and impacting CF as CFO?, i feel he is conflicted in his posiiton and role.
Independant of management blunders they have drilled 7 or the top wells in the Montney as of late and have an amazing resouce in Kakwa, the problem is they don't have a clue how to manage, or create value there.
They are spewing off gobbs of CF, and at 70 dollar oil which is my projection for next week, even after paying down the debt, and even after getting attachie funded, they should have tons of spare cash to fund more wells at Kakwa which is their most economical and best return play on the books.
I think eventually the CPP plan members might realize their mistake on put some pressure on managment why invest in a long shot long term project like attachie, 2 years away, 600 million to sanction, when they are sitting on a pot of gold at Kakwa? full cycle econimicst 2.5 years into the future, when the best play is sitting in your palm that can be had immediatly with 1/2 cycle economics, on the cheap.
I just don't believe management will have to come around, and the stock should hit 14 dollars and at that point i will be done and gon.
My feeling is that it is so undervalued even with this poor management it will hit my 14 dollar target.
The other thing is this, it is generation gobs of FCF now, and they can borrow money at 2%, which is free, while i oppose debt replayment, i think the only project i would put more money int right now it Kakwa and Ante creek. The reset could sit idle as far as i am concerned.
A positive sign might be if the CFO decides to make his job full time, and he focuses on the finances of an almost 10 billion dollar company,novel ideal?
So i am here to write letter to the CPP fund and see if management will really do what they say, invest in the best immediate return, put money where they get the best returns, and pay shareholder healthy dividends, not .24 cents a year.
IMHO