Dawson compared to KakwaI am using this stip pricing, here is where i took the numbers from.
Strip Pricing August 12 Condensate Gas Liquids
87 dollars condensate 2.93 AECO Gas, 21 dollar
(17.53 boe)
Condy/Oil Nat Gas NGL’s Total Boe/Q2 CF BOE 2021 Play Capex
11,533 71,250 8,439 91,219 26.67 240 million
Dawson 60319 72,933 39,633 172,855 42.58 525 million
Kakwa So these are the numbers for Q2 for Dawson, every boe of production at Dawson on a annual bases gets $2,631 dollars of capex and those BOE’s generate 26.67 dollars in Cash Flow.
So these are the numbers for Q2 for Kakwa , every boe of production at Kakwa on an annual bases gets $3,037 dollars of capex and those BOE’s generate 42.58 dollars in Cash Flow.
So generate 100 million dollars in cash flow, at Dawson it would cost 27 million dollars based on this years budget of 240 million, the same 100 million could be generated at Kakwa for 19 million dollars.
Dawson 100million/ (26.67 *365) = 10272 boe/day or (27,025,632) dollars
Kakwa 100million/(42.58*365) = 6,434 boe/day or (19,540,976) dollars
So the full year returns at Kakwa are 38% higher than the returns at Dawson, which is suppose to be one of ARC to projects. Pursuing 2% declines objects and turning your back on 38% upside in returns is what ARC resources is doing.
IMHO