ARC Resources Ltd T.ARX

Alternate Symbol(s): AETUF

Energy Oil & Gas E&P

ARC Resources Ltd. is a Canadian energy company. It is focused on the exploration, development, and production of unconventional natural gas, condensate, natural gas liquids (NGLs), and crude oil in western Canada. Its operations are focused in the Montney region in Alberta and northeast British Columbia. Its operations in Alberta are located near Grande Prairie and the region includes Kakwa and Ante Creek. Kakwa is a condensate-rich and high-deliverability natural gas play with top-tier development opportunities. Its operations in northeast British Columbia are located near Dawson Creek and the region includes Greater Dawson, Sunrise, Attachie, and Septimus and Sundown. The Greater Dawson operating area includes Dawson Phases I, II, III and IV and Parkland. The Attachie is a condensate-rich, natural gas play primed for large-scale development. Sunrise is a dry natural gas play with a low-cost structure, well deliverability and direct connectivity to liquefied natural gas Canada.

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ARC Resources Ltd > May 2024 Q1 ER

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Comment by Trappedon Apr 23, 2024 11:08am

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Post# 36003289

RE:RE:RE:RE:RE:RE:May 2024 Q1 ER

Great analysis, Quint. I was a bit confused by TD's projection that the company will likely increase the dividend by roughly the amount of shares repurchased last year. With buybacks reduced, there's more than likely enough capacity there to support a reasonably healthy increase without compromising optionality around Capex, debt management and even tuck-in acquisitions (if that's in the cards).

I guess we'll see how it goes. Cheers and GLTA ARX Bulls.

Quintessential1 wrote: I like the tone of an expected bump in their analysis but not necessarily the "modest" amount they are hinting at. I hope that, "(like in 2023)" is refering to at least the percentage the divy was raised 13 1/3% and not the dividend amount saved on repurchased shares as a guideline.

I realize that they have a substantial amount of longterm notes coming due in 2026 and some hefty cap-ex lifting to do but a 4% divy increase seems overly conservative especially if they are going to keep buybacks as low as they have been lately.

I also know they have stated that they want to get the oustanding share float to pre-merger levels but obvioulsy changes in government policies should influence changes in corporate policies and given the future 2/3s capital gains inclusion rate (not to mention the existing 2% buyback tax) I think buybacks(with the exception of executive incentive package coverage amounts) should be paused until cooler heads in Ottawa prevail (hopefully in 2025). Dividends may now be the best way to return value to shareholders until then.

GLTA ARX BULLS

Westcoastenergy wrote: Looks like analysts are also expecting a bump in the dividend. This was in the Globe & Mail this morning:
"TD Cowen analyst Aaron Bilkoski sees the opportunity for higher dividends in the energy sector,“Potential Dividend Bumps For Certain Operators: Among the conventional producers, we see ARC Resources (ARX-T) potentially modestly increasing the dividend with Q1 results by approximately the amount of shares repurchased last year (like in 2023)."