ARC Resources Ltd T.ARX

Kawka General Comments

[Shaleguy]

Firstly uncut. James opex is not atrocious. By the end VIi had got it down to around 4 4.50 which is exceptional given the complex facilities needed to process the high liquids content stream which includes field separation and pumping condensate, condy stabilization in addition to all the normal equipment needed for a typical gas operation. Good oil operations run in the six to eight dollar range, and heavy oil up to twenty plus. On a negative note they took on way too much to service. That said if they sold off the Alliance service it was dumb as NYMEX is again in the money by a ways if you have access to the market. On a positive note Arc kept Lynn Chrumka, the Seven senior VPof Geology and Exploitaion. BTW is good. So MHP Kakwa is in good hands

[Shaleguy]

Darn thumbs. Makes not James

[uncutgems]

they decided to shrink production and focus on cost reduction. it's not that hard to lower costs when your stated goal is to lower costs and let production decline or scale way way back. the trick, and 7g is not the only company quilty of this, is can you create shareholder value by growing your resource? it's not that easy is it? arx has curiously decided that the best path to value

[Shaleguy]

Growing q aside from the first month after completion does not affect opex. In fact oilfield costs are typically 80 percent fixed so holding q flat or growing actually lowers opex once you have infrastructure in place. As far as completions are concerned testing and flowback before tie in is capitalized. I think this where they made most of the efficiencies. Thank David Holt for this. Under his

[uncutgems]

when you drill less wells, it frees up your staff to focus on other things like cutting costs. I can't believe what a train wreck 7g was by the way you describe things. maybe arx is still tryin to sort it out? tou made a statement you might find curious. They have stopped GROWING rapidly, stopped buying new assets, and they will now use up the freed up energy and human resource to concentrate

[Shaleguy]

Uncut. Field operators are permanent contractors or staff and they operate wells and facilities. You don't need to add an operator for every new well. Drilling and completions guys are on site for a specific operation. These are capital costs.. Agree with comment as why they have not ramped up. VII stopped growing becuase they going deeper in debt in a low price environment. The last gas plant

[uncutgems]

ok. I hear you. I still maintain that just like in life, costs come down when you have the time and energy to focus on them. it's hard to believe that 7g just completely decided low operating costs were something they did not need to aspire to until 2020. can you explain why 7g transport costs were budgeted over $7.50 /boe in 2020 and arx's were under $3? And Arx's codensate xport

[MyHoneyPot]

I am not an operations guy but i think it like this, they had more than twice the liquids volumes, and gas is cheap to produce.  IMHO

[MyHoneyPot]

It seems to me to quite straight forward, obvious, common sense, that with a 50% price increase since ARC acquired Kakwa, with a 2% objective in reducing declines, to me doesn't that sound like a rounding error to you in this price enviroment? Condensate is trading for 100 dollars canadian a BOE, and with line 3 opening up the market can use more with the expanded capacity.  So for

[altagold]

MY MONEYPOT,   YOUR  ARC SUMMARY IS  FACT, NUMBERS DON'T LIE,  THATS WHY ARC IS  ON IT S WAY TO OVER  $20 SHARE PLUS