Management is not Pursuing Shareholders best InterestsARC management is robbing shareholders because of the false bill of goods that it is selling shareholders; however, the investment community is wise to it, and with 110-dollar condensate means everyone should wake up to it, including management. Since the inception of the deal, this marked the starting point where Terry himself who was blindly unaware as he compromised the value of the Kakwa assets with irresponsible communication regarding declines. ARX has used the VII generations merger to fund marginal quality unproven project like Attachie and Sunrise (Without Service Dates), unknow returns, while they sold off the transportation and put a cap in the most profitable play in the entire Montney, Kakwa.
ARX is currently engaged in a share buyback, if ARX were to increase the CF/FCF per share by 15% they would have to spend 1.5 billion to buy back 15% of the stock.
However, to achieve a 15% increase in CF, ARX could invest 200-225 million in Kakwa and restore its production to it premerger historical level. (On a half cycle basis) This would add 15% to CF and FCF and add at least 2 dollars a share in value without having to spend 1.5 billion in share buybacks.
200 million verses 1.5 billion that is the 1.3-billion-dollar question net to shareholders question.
This could be done quickly, and results could be recognized immediately.
So, the increase in FCF from the additional production at Kakwa would add more that 250 million dollars a year. 40 cents a share additional FCF, and with the 1.3 billion of cash do not spend on a share buyback they could essentially eliminate the debt or if they lost their minds, they could return it to shareholders in dividends. $2 dollars a share.
Management needs to start working in the best interest of the share holders the strategic direction and management is obviously rookie and we are dealing with rookie leadership.
IMHO