EPS is kind of meaningless, its really Finance Magic....
There are two important numbers that you should look at, FFO and number of shares, those are really important. Number of shares because they have been doing buybacks.
Management has finally conceeded that Kakwa should produce at between 180,000 and 200,000 a day, and missed that mark in the 1st quarter. They are going to allocate more capital there.
If you look at TOU they has 618 million in FCF, and the was i read it Arc has 410 million.
ARC share float is now 680.9 million shares.
So ARX FCF generation is roughly 66.3 percent of what TOU is.
TOU has a market cap of 23.1 billion dollars * 66.3% = 15.31 billion =arc share/tou equiv = $22.48 share based on FCF so ARC is not over priced.
The hedges losses are what you should of expected, and first quarter the hedge losses for the Condensate were pretty well equal to what they were for Natural Gas, expect next quarter the price of Gas will be a lot higher, and the losses will be a lot higher.
Billions of dollars lost in Hedging over that last 2 years, and i know the answer these are all VII generations gas hedges as well. Whatever....
I think its ok, production could be stronger, all the cash is going to share buybacks.
It is good they are investing more in Kakwa as POU has updated thier presentation and it demonstrates they are getting ROI's of 10 on Kakwa wells.
ARC doesn't need to invest a ton more into Kakwa, it would be easy to add 20,000 boe a day there with little effort.
A little more Kakwa and Arc would be a much better company.
IMHO