Sitting on their HandsWhile ARX has been sitting on their hands will full funding in place for Attachie and Sunrise, nothing has been resolved in regards to Treaty8 negociations, and they don't have timing or the known costs associated with a agreement with the BC first nations.
So no production increases, and they have Starved Kakwa to the point it is barely meeting it production objectives.
Internal Focus
So essentially ARX has been staffing up the management team, and adding a lot of cost to the organization that the market did not like. Tons of share based compensation. Part of their reason for a miss.
So what they are telling us is tha ARX will be finally moving two more Rigs to Kakwa, and ramping up Kakwa to between 180,000-200,0000 boe. It sounds like Terry wants a stable 190,000 boe of production.
What is really frustrating is this, directly adjacent to ARX kakwa is Paramount portion of that play. Except Paramounts portion is more sour.
Paramount describes Karr as world class, with superior economics, and some wells have ROI of 10X. It would be nice to know what the ROI's are in ARX's Kakwa, but management fails to provide anything that they could be measured by, or that would require them to be transparent to the investment community.
Shaleguy, how big an impact do you think these two rigs will have?
Every boe at karr is roughly 35% condensate, and is trading about $140 canadian now, so $50 dollars for evey boe from Kakwa is condensate. Your looking at greater than $100 dollars a boe at Kakwa.
I think management tells us that are making the best investment decision for every dollar they invest, we don't want to hear it anymore we want to see numbers that reflect that.
IMHO