66% of revenue from liquids - Sunrise small potatoesThat right 66% of ARC revenue is coming from NGL's, Condensate and oil. Where does ARC spend it capex budget for 2021 on dry gas, brillant in my mind?
Terry and Bibby are trying to head fake shareholders into thinking the 80 million spend on dry gas will equate to reall share holder returns.
Even if they sell the gas at 4 dollars, 24 dollars a boe, and netback 10 dollars boe, how long will it take to pay back the 80 million capex investment?
80,000,000 at 10 dollars boe netback gas, it will take 3.5 years before share holders get one dime back. My honest opinion is it would be more like 5 year, with FD costs, and even longer with a 3 dollar gas price.
So management is pissing away shareholder money on Full Cycle dry gas projects, because sunrise on it own was barely economical stand alone.
At 40,000 boe of dry gas and gas represents 33% of ARC revenue and total gas produciton last quater was 20% of arc natual gas production. (6 percent of arc revenue)
So 100% of ARC 2021 capex will double the capacity at sunrise and give it the plant, (Not the resource) to produce 80,000 boe of dry gas.
While management turns it back on capital for liquids resources that are producing 66% of their revenue.
This will have a small impact on Cashflow, and they better hope for really high gas prices, at 3 dollar gas it could take forever to pay back.
IMHO