RE:RE:Tourmaline Concerns The market has mispriced ARC,
The opportunity is so compelling that I needed to suck it up, letting the market forces direct management to do the right thing. When the business circumstances become obvious to everyone, common sense will prevail, and management will be required to do what is best for the share holders.
I think TOU is a great stock and fairly evaluated in terms of price, but ARC is worth so much more, and liquids rich plays like Kakwa are a diamond in the ruff. I hope that ARC does reach a $70 dollar target, because that will make ARC a $40 dollar stock.
Last quarter TOU average price per boe with all their liquids included (Condensate and NGL’s) was $24.67 a boe, on 410,000 boe (10.1 million/day). Well today ARC is producing 75,000 boe getting roughly $104 dollars a boe (7.8 million/day). ARC cash flows roughly 78% of TOU CF from simply condensate.
This does not account for ARC’s other 275,000 boe a day of production. It will become clear to the Market on Nov 4, 2021 third quarter earnings.
ARC’s main play area contains it best reserves, and 87% of the corporations’ liquids reserves and with the plant and resource capacity to deliver more condensate. This reality will steam roller will convince management into doing the right things for shareholders.
I like the Riddell’s and I like the creativity of TOU management, they are smart, Topaz was a smart idea how to work the markets, they know how to present numbers, and they have oil and gas in their veins, but ARC has the right dirt, and this is one of the most compelling plays in all of North America, In a Oil and Gas basin that needs vast amounts of condensate.
Either you believe it like I do, or you let name Sayers tell you different. I believe it, I am familiar with the play, and a lot of capital has been invested into this play to make it scalable. Now ARC shareholder gets to reap the benefits of these efforts, multiple years of work, learning, infrastructure buildout and investment. This is planet alignment, the right time is now, and Kakwa is the right resource.
The rest of ARC plays are good, well managed, but nothing I would consider spectacular, Kakwa is the reason I am here. ARC management has always aspired to make the company more liquids rich with Attachie, that aspiration is now realized with Kakwa. Management should embrace Kakwa, understand the engineering issues and problems associated with a 58% liquids rich play area, taking those learning to Attachie.
Kakwa has plant and resource to double the production with half cycle costs, there could be a day when Kakwa by itself produces as much as TOU does today
IMHO