2023 Year to Out Perform - Many Improvements
100-125 million in drilling done (Kakwa)
Kakwa started out 2023 with somewhere are 25 wells (DUCS) already completed. This has the impact of essentially adding 100-125 million to Kakwa Capex in 2023. Kakwa produced 188,183 in Q4 a very good number, so Terry says Kakwa will increase production in 2023.
Production for Q4 2022 was 359,730 so they are off to a great start in 2023, and last quarter their debt. Long term debt is down 715 million from the beginning of 2022. About 73 million shares which is another 43 million dollars.
So the debt side of the equation is way down for arc in 2023 with long term debt dropping 715 million from 2022, the dividend payout is reduced by 43 million dollars in 2022 alone, about 60 million dollars because of share buybacks, and they have proactively spent money on Attachie, Sunrise, Kakwa in 2023 so their capex number should have a fair amount of room in them.
Now the hedges, last year ARX lost 572 million on oil hedges, this year it will a lot less likely less than 100 million.
Gas hedges last year ARX lost 695 million dollars, this year it will be a lot less.
ARX on average lost 320 million in FCF a quarter on hedges in 2022, in Q1 2023 it will be quite a different story.
So 2023 is going to shape up like this
Higher Production + Less Hedging Losses (320 Million Qtr) + High Kakwa Prod + Less Dividend Payout + Less interest Payments
ARX is in much better shape in 2023 then they ever have in the company histroy.
IMHO