ARX is not feeling the Love!Last quarter ARX netbacks were twice on a boe basis as what Tourmaline's delivered. Tourmaline also paid a higher percentage in terms of royalities, and actually had less FCF then did ARX resources so what it the problem with the evaluation?
Maybe when the company is standing still to long, it's not very attractive, like a girl friend without a job is not someone you don't want to get involved with.
ARX put all their marbles in Attachie and Sunrise, and so far they are not allowed to play. Restricting the Capex at Kakwa is lost opportunity, and sends a message to the market that the company has ZERO growth, and zero growth prospects and they are uncertain about increasing production at Kakwa.
So management had squandered a lot of time and missed a lot of opportunity at Kakwa and hopefully they will get things going there in a meaningful way. Why don't they have that infastructure fully utilized, with optimize operating costs. (The market is likely wondering that)
With a good chunk of hedges coming off ARX will add 100 to 150 million in FCF each quarter, and being a lot more liquids rich than TOU, they are going to significatly out perform them in terms of FCF.
ARX is significantly mispriced and mismanaged company, likely with a lot of Treaty8 overhang.
This should be over 30 dollars, it boils down to incompetant management.
IMHO