Kakwa ProductionI think ramping up Kakwa will be easy and low risk. It means we may see ARX with a production increase quarter over quarter god forbid.
More production at Kakwa means higher returns, however if the wells pay out quicker, this also means higher royalities, this is really a good thing, and it is good for the province of Alberta.
The ROI of each well will get higher, and if look at Kakwa/Karr in POU presentaiton they are projecting 10X ROI's on some wells, which equate very well to ARX's Kakwa with an average 2021 7.2X ROI on wells.
One Year Later
- It been a year and ARX has managed to keep production flat, no gains.
- No Sunrise Gas Project
- No Attachie project, just an Attachie spend
- No first nations agreement
- Hedges still look lousy
They have bought back a significant number of shares, but investors are getting tired of watching paint dry.
More production from Kakwa will improve Arx's returns, and will stimulate more interest in ARX, because eveyone know that Kakwa is the premier montney liquids play in existence. It can not quickly or easily be replicated because of the huge infastructure footprint of the play area.
We now have some production gains to look forward to, and don't have to listen to management promoting play that are unsanctioned, and do not have first nations agreements.
IMHO