ARC Resources Ltd T.ARX

Arc is a Light Oil Company - Condensate 89 dollars

[MyHoneyPot]

With todays oil price $73.50 U.S.

1. Over 60% of ARC Cash Flow comes from condensate, and light oil.
2. Roughly 32% from gas based on $3.27 mmcf.
3. Most of the Remainder from Natural gas Liquids $7.3 percent

This mean 68% of ARC revenue is from Liquids verses 32% from Natural Gas.

So in ARC's porfolio the highest Net Back play by a country mile, that represents Canada's #1 Condensate Play Kakwa. 

So with 40,000 boe of 1/2 cycle production unused, and Condensate trading at roughly 89 dollars canadian, ARC mangement is restricting production in an effort to pursue 2% declines at a play with the best condensate economics in all of Canada.

ARC is no longer a gas company it is a light oil company and get twice as much revenue from Light Oil as it does from Gas.  

                
    % Resource
Base by Commody                                             Rev/Boe                                     Percentage CF

60% Natural Gas                                   60%     * 19.62   =    $11.77                               32%
21% Condensate                                   21%     * 89.04   =    $18.70                               51%
4%   Oil                                                   4%      * 86.40   =      $3.45                               9.4%
15% NGL                                              15%      *  18.0    =      $2.70                               7.3%
                                                                                          
                                                                                                $36.62 per boe revenue Canadian
 
Exchange = 80.20


IMHO