Acquisition Delima
TOU has demonstrated for use, how to make accretive acquisitions of half cycle projects while they are ramping up their production, and from this they provide shareholders a five-year plan, clearly define their objectives, and the goal of being the largest and best natural gas producer in Canada.
Clearly ARC has chosen a different path, with the liquids rich acquisition of Seven Generations, the plan to sanction Attachie, and really its movement into the liquids rich space, this is a new space for them.
The problem is that paying off 2% debt, does and has not helped the share price, Arc Management has made us victims of this strategy. With ARC’s share price is in the toilet, they have no currency other that cash and the balance sheet to do accretive acquisitions.
Management are Slashers and Not Aligned with Providing Share Holders Value.
The current management team is the group that slashed arc dividend by about 70%, they slashed Kakwa budget from 1.1 billion in 2020 to 525 million on 2021, They piled on full cycle capex at Dawson and Sunrise funding full cycle low economics dry gas, and now they want to sanction Attachie, it sounds like it is now a 700 million dollar money pit, a project that will not return a dime for more than 4 years and is laden with risk.
Arc management is putting the company in a dismal, position and destroying shareholder value. It is making ARC an unattractive investment opportunity, and can not provide a plan for the shareholders, that makes sense.
IMHO