Real Play Areas with Scales and Size in the right LocationsScale and development, that is what Kakwa is all about. Kakwa is a single play area with 4 massive gas plants, 3 owned, one contracted gas plant that could easily produce 250,000 boe a day. Clearly the economics exist at Kakwa, as the company hedge production at $46.90 U.S. from the #1 liquids rich Condensate play area in Canada. With oil north of 75 dollars U.S. the returns from Kakwa are nothing short of outstanding.
So, if you believe management is telling up the truth that they are pursuing the best returns for every dollar invested, then we should be confident that every dollar will be invested in Kakwa, because.
- Kakwa is Half cycle and is built so we have the timing benefit the plant is built
- Kakwa represents ARC’s best netback per boe (Before hedging losses)
- Kakwa is the least risk (It has the greatest proven resource)
- Kakwa is absent of Treaty8 issues (The Indigenous people are onside)
- Kakwa has a 2 billion in sunk investment (Manage is a responsible steward of plant/infrastructure, getting best returns, and full utilization.)
- Meaningful Dividend, last quarter we spent 3X the dividend returned to shareholders of a risk management catastrophe.
We need to understand how management is going to get optimal returns for shareholders, so far we have seen a lot of money spent of Risk Management with no Returns, Attachie with no Returns, Sunrise with unknow returns and timelines.
I would say that ARC management is failing on the business side to present ARX as a compelling investment opportunity.
Every attempt of is management to manage RISK and has the shareholders dearly with less than desirable results. We need business leadership at ARC, and decision making done based on running an energy business, we need to stop these rookie mistakes.
IMHO