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ARC Resources Ltd T.ARX

Alternate Symbol(s):  AETUF

ARC Resources Ltd. is a Canadian energy company. It is focused on the exploration, development, and production of unconventional natural gas, condensate, natural gas liquids (NGLs), and crude oil in western Canada. Its operations are focused in the Montney region in Alberta and northeast British Columbia. Its operations in Alberta are located near Grande Prairie and the region includes Kakwa and Ante Creek. Kakwa is a condensate-rich and high-deliverability natural gas play with top-tier development opportunities. Its operations in northeast British Columbia are located near Dawson Creek and the region includes Greater Dawson, Sunrise, Attachie, and Septimus and Sundown. The Greater Dawson operating area includes Dawson Phases I, II, III and IV and Parkland. The Attachie is a condensate-rich, natural gas play primed for large-scale development. Sunrise is a dry natural gas play with a low-cost structure, well deliverability and direct connectivity to liquefied natural gas Canada.


TSX:ARX - Post by User

Post by Shaleguyon Dec 15, 2021 1:07pm
280 Views
Post# 34233464

Are there Headwinds

Are there HeadwindsAt current strip pricing, checkout MarketWatch which shows realtime futures, we see natgas at around 3.70, and oil at 69. Assuming nothing changes, Arc will see cashflow north of $3.2 billion less $1.1 of capex leaving FCF of $2 1 billion or about $4.70 per share. Using a 5 times multiple the share price gives $23 dollars per share less 22 hedges. Here are some of the headwinds I see: 1. Interest rates heading up slowing consumer demand; 2. IEA comments that oil market in balance now and in surplus in 2022, 3. Inflation generally and in the patch. labour up and more importantly services like pumping going up. In downtowns the oil companies have the hammer. The service guys always get their money back 4. And here's the big one. Warm winter in major population regions. Doesn't matter how cold it is in Calgary, it's New York that counts. If storage removals lag in January with a warm spring lookout. Check out any US weather forecast for your selves. Don't take my word for it 5. Omicron is a huge wildcard. Even if it's less potent, we could see most international air traffic halted. I think Farmer 12 said he's seen 6 down turns, who can predict what will happen in 2022. Three things, it stays the same, things really take off or we have a softening of all O and G stocks. I'm old and cautious so I think we could see this thing softening a bit more . Here's some food for thought as I know I piss a lot of you off a lot. It took me a very long time to learn this True intelligence can be measured by seeing the validity of opposing arguments. F Scott Fitzgerald. And to reiterate again I'm only offering my experience sincerely for you to consider in your investments. It's your money.
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