ARC Resources Ltd T.ARX

Kakwa Acquisition - shelving 50% of your asset base

[MyHoneyPot]

Kakwa Acquisition
 
Here is the Rosey Picture management has painted for the investment community regarding Kakwa.
 
Kakwa represents more than 50 percent of the company now, and had the largest reserves base, extra plant, and extra capacity. It has available to ARC meaningful ½ cycle near terms production increase that would add meaningful cashflow, but this is what we will do.  
We will restrict capital to what is our best performing, best return, and most significant CF generating asset base being Kakwa, while we pursue a 2% decline objective, in the best commodity environment that has been existence for more than 3 years. A brilliant strategy! Really intelligent?
 
More than 50% of ARC’s asset base is governed by this junior high operational mentality approach. This is in the fact of hard facts that hey just brought on 7 out of 10 of the best Montney wells in the entire basin.
 
Terry’s the President is operational, with zero strategic thinking, zero salesman ship, and zero business strategy, or vision, is all operational and he only likes his own like projects that he has built, no matter how long they take, how much opportunity is missed, and how much risk he introduces to the company.  Attachie is a perfect high risk example of this.
 
Projects like their Greater Dawson, produce insignificant cash which really could be considered a rounding error when company has Kakwa type cash flows and opportunities at their fingertips.  
 
It blows my mind that a President that invested more than half his company to buy an asset could in one breath tell us how great it is to produce well pads unrestricted because Kakwa has the capacity to do so, and in the next sentence complain about declines, are not production practices and declines related?
 
Until management gets on board with Kakwa being the best asset in their asset base how will investors and is this not what they gave away more than 50% of the company for. Management needs to take a management 101 course and they need to hire some strategic thinkers in management and stop pursuing their 2% strategy.
 
Pay share holder 2% dividends, Pay off 2% debt, and Pursue 2% declines at Kakwa.

IMHO

[Quintessential1]

How about a little patience.  Maxing out plant capacity only makes sense if it comes with signifcantly reduced costs and by significant I mean  more than future commidity prices would provide. Sure commidity prices are at 3 year highs but they are projected to go at least 25% higher.  If you don't receive a 25% cost savings then why bother? Sometimes a plant running at 75

[MyHoneyPot]

Thats is really poor and dismal thinking and a poor operational perspective, they are missing opportunity and robbing shareholder of CF and share value. They can refine operations and take the cash at the same time and get PAID for it. Wakeup man. More opperational thinking, rather than having a management team that is strategic in nature and can create share holder value. Oil is over 71 dollars

[Quintessential1]

So you want to sell all of the inventory on a 25% increaesed costs basis when oil futures are being projected at $100 per barrel and NG at over $4 this winter? I'll take the 25% increase in profits with no added expense and the added reserves that Attachie brings for the win This is the reason why we hired this management team and not you. Hey maybe we could strip out all the copper wiring