Dividend Slasher at the HelmAECO spot gas $3.36 (I boe of condensate = 6 boe of gas)
Yes that is right, condensate is over 90 dollars a boe with make production look like this.
Condensate Equal
Condensate*Oil 88,500 boe
Gas 1,200 MMcf 200,000 boe 33,333 boe
So all the gas production of ARC sums up to less than 37% of the revenue that the company is getting from condensate. So, sitting on 40,000 boe of 1/2 cycle economics Condensate in the most prolific and number one condensate producing play in the Country, sounds brilliant. Management is so smart, that is the only way this board wants to see it.
So, when you have 40,000 boe sitting in the wings, and you spend 600 million to bring on less than 30,000 boe two years from now, your right it is not longer full cycle economics.
3X Full Cycle Costs It is 300% * full cycle economics because you have 2 years of lost opportunity, you have 600 million sunk capital costs, you have 750 million in plant that is rusting away, and a loss of two years at 40,000 boe a day at the #1 condensate production play in the country.
30% of CF as a Dividend ARC has a history of paying 30% of it Cash Flow as a dividend, now there is no certainty of what you are going to get. Management is not concerned about Paying share holders and is this not the management team that slashed your dividend.
Dividend Slasher at the Helm In Feb 2020 ARC appointed his new Rookie CFO, and his first act of office was to slash the dividend to 6 cents a quarter. Who can be confident that he view dividends as importantly as share holders do. Is not ARC suppose to be a dividend stock. Don’t hold out to much hope for the dividend slasher to restore you dividend, or even work at paying you a higher dividend. He has no history of paying share holders dividends, he is a dividend slasher.
https://seekingalpha.com/news/3551549-arc-resources-cuts-2020-capex-40-percent-slashes-dividend IMHO