Tourmaline Concerns I have to share my deep concerns regarding the impact on TOU could have on ARC's market cap.
Tourmaline currently has a market cap of 14.4 billion while ARC resources only has a market cap of 8.7 billion.
Tourmalines current trading price is 45.78 dollars a share.
So my concern is the next earning release when people see the cashflow that ARC is throwing off, likely exceed the CF that we will see from Tou, that gap in market cap may evaporate and it will be the last opportunity for us as shareholders to get ARC at this attractive evaluation.
As previously mentioned today oil closed at 79.09 today, and last time i looked condensate was trading at 3.21 premium to WTI, so condensate is now trading at 82.40 U.S. or at least somewhere in that price range, at a .79 cent cent canadian dollar that makes condensate $104.31 when compared to a 4 dollars aeco gas price that make one boe of condensate equal to roughly 4.35 boe of gas production.
4.35 * 60,000 = 260,759 Gas equalivent boe at a price much higher then Q2 average price
260,759 - 60,0000 = 200,759 # of boe to add to arc production to make it compareable to TOU
So if ARC produces 350,000 boe in the 3rd quater that would be equivalent to TOU producing 550,000 boe of production with their current commodity mix.
I am worried when the market figures out ARC will CF more that TOU the gap might evaporate immediately.
That would mean closing the marketcap gap in the current 5.7 billion dollar difference in market cap evaluation, 5.7/8.7 = 65% upside to just have the same market cap as tou or 20 dollars a share to have the same relative market cap.
However I believe 1 boe of condensate is worth more than 4 boe of gas and we should trade at a premium to TOU.
I am worried my fears will become reality on or before November 4, 2021
IMHO
ARC should be trading north of 20 dollars.
IMHO