ARC Resources Ltd T.ARX

Q1 compare ARC verses TOU Projection

[MyHoneyPot]

              Gas                     Oil+Condy                      NGLs       Prod/boe          Gas           oil/condy        NGLs

TOU   1917648       34869  (10725  +  24144)       57,102       411579         77.68%            8.45%       13.87%  
ARX   1255000       88500                                     52000       350,000         59.87%           25.28%       14.85%


If oil/condy 90 canadian, gas = 3 dollars, NGL = 18 boe            

Neglect operational costs, marketing, hedging all that other stuff they loose money at. 

ARX will generate 27% more cash flow than TOU based on Q1 production numbers. 

If oil/condy 80 canadian it will be  23% more cash flow.

If oil/condy 70 canadian it will be 18 % more cash flow.

If oil/condy 60 canadian it will be 12.8% more cash flow. 

So the shares of ARC should be trading significantly higher, even with the recent acquisitons that TOU made Arc will be trading at a significantly higher cash flow, because of it light oil weighting. 

Tou market cap = 9.83 billion
Arx market cap = 7.16 billion   (20%++ more CF - 37% lower market cap)

Debt levels will change these numbers a bit, but debt should be adjusted by CF premium. 

IMHO

[MyHoneyPot]

Debt adjusted,               Arx could carry 23% more debt than TOU and have the same Debt to Cashflow ratio.  37% To have an equalivent Market Cap TOU Additionally the share price could appreciate 37% to have the same Market Cap as TOU If you add the increase the value to ARC based because of higher Cash flow. (23%) 9.93 *1.23 = 12.2139 billion

[clamlinguine]

Thanks for this analysis. This is why I moved back to Arc as my biggest holding. The market sure loves Mike Rose I guess. Arc management really p$%^ed me off , right or wrong, when they rewarded themselves with tons of options when the price was near rock bottom.