ARC Resources Ltd T.ARX

Top Kakwa Spending is Down by 50 Percent

[Shaleguy]

Top, I have never said ARX doesn't have great assets and potential. But the fact is they have committed to spend 600 million at Kakwa which is the same budget that VII went forward with in Q1 of 2020, after cutting it from 1.1 billion due to Covid. This seems to be very timid to me. At 60 wells per year they are extending the recovery of the reserves by almost 50 percent and destroying the NPV of the company. With the unrelenting March towards de-carbonization, oil reserves in 15 years won't have much value. This is where the delayed reserves will fall. I could use a crude old oilfield expression to describe delaying oilfield production but it's no longer appropriate or allowed in today's world. Along this line of thought why do you think the Saudi oil minister say they'll drill every last drop. Because they know that oils day as king is on borrowed time. And finally Top I know you are a knowledgeable guy and won't disparage you. Arc has done assets with a balanced slate of products and should well. I am looking to add at some point. That said there weaknesses are the number of shares out. They have a share count near CNQ with a fraction of the production. And two they have a management team used to running a 140,000 boepd company built over 20 years that was a staid royalty trust for a long time. Bottomline they have a culture that is not nimble. The VIi transaction was driven by bankers. Sorry for the rant boys. I'll StFU for now.

[topdown99]

You two obviously want to wollow in self pity bathed in anger and I'm done with this BS . By 2040 , 48% of vehicles sold will be EV (according to analysts) which means 52% will still have an ICE power plant so your claim of oil assets having no value makes me laugh . The ESG crowd want to ignore anything that contradicts their lollypop dreams but reality says different .  It is apparent

[Shaleguy]

Top. Thanks for the reasonable closing. I respect your views. That's what a free society is all about. Respectful discourse But rest assured I am not at all angry.

[topdown99]

[/quote] That doesn't surprise me Shaleguy , I assume you have been "short" ARX for a while now . This market is diametrically opposed with SP dropping as the underlying commodity continues to appreciate . I congratulate you on being on the right side of this in the short term but time rolls on , the clock keeps ticking and debt continues to be paid off . Not very sexy but it works

[uncutgems]

there has to be something wrong at kakwa. what was the URGENCY to acquire this asset if all they plan to do is maintain production? MY own take is that ARX has promised FCF and lower debt to investors. Growing Kakwa and ATTA at the same time would put those promises in jeoparday. They got oil prices above $70 and did not take advantage. You all say you are happy with management. But the biggest

[Shaleguy]

Uncut you we'll be right However, the history of over 550 producing wells would suggest otherwise.

[uncutgems]

shaleguy I assume you are talking about kakwa? I don't believe they could grow kakwa, pay a high dividend, reduce debt, and make their huge investment in ATTA all at the same time. Perhaps you have another theory why they aren't growing kakwa at $70 plus WTI.

[Shaleguy]

Uncut. Firstly the debt burden isn't that onerous. At 2 percent it's only 46 million annually on 2.3 billion for example so if the all in debt is at 4 percent it's less than 100 million on over 4 billion of revenue. The dividend is around 180 million I think the real reason for caution is the 435 million actually lost in cash money in Q2 which if in place for another two quarters is

[uncutgems]

I agree with you that management hasn't made the case well enough for massive investment in Attachie. But this is an area (ne of atta) that tou seems to like a lot. Arx also took on some big capital leases that 7g had. arx discloses net debt including leases and excluding.