Earnings CallThey reitereated during the call that they will return between 50 to 80% of FCF to shareholders and the base dividend is the chief mechanism for returns. Their commitment right now is to grow distributions at the corporate level by about 5% per year which will result in a considerably larger increase per share as the company buys back shares. This is based on a mid cycle oil price of $55. The elephant in the room, that was not addressed, is what they will do if high oil prices persist.
I appreciate their caution in not assuming perenially high oil prices and also happy that the company can thrive at $55 WTI and still cover their base dividend down to $40. However, now that debt targets have been reached it is now necessary for Arc to explain what they are going to do with the hunders of millions of dollars of FCF that they will likely have once the current NCIB is fully used up (likely in H1) and the current modest dividend is paid. I find it disappointing and perplexing that they could not provide a little more color.