ARC Resources Ltd T.ARX

Peters Report - ARX has Brain Dead Management

[MyHoneyPot]

Peters came out with a report yesterday, that highlights that ARX will have the largest hedging loss of any large sized company.

ARC hedging loss in 2022 will be 637 million dollars, or likely 1 dollar per share or 4X what the dividend is in the stock. The hedging loss in my opinion may be understated even at 637 million dollars because while the have a huge loss on commodity upside, the royalites are not tied to the hedge price and they continue to go up with commodity price. 

This is a brain dead management team, and they have destroyed the upside here. Compare to Peters 2022 forcast ARC will have twice the hedging loss as Tourmaline. 

IMHO

[PabloLafortune]

I don't pay that much attention to unrealized losses except as a guide for future realized losses. I'm going to guess though that the Q4 REALIZED hedge losses could be $8-10 per boe depending what WTI and the NG prices avg. Who knows 2022 but if current prices hold, perhaps $6 per boe realized losses? Which is 4-5x the hedge losses of at least 1 other...

[MyHoneyPot]

The way i look at it is like this, in the 4th quater of this year, ARC has about 45,000 boe of oil WTI sold at roughly 50 dollars U.S. If the price of oil stays above 80 dollars for the quater, they have lost 30 dollars U.S. a boe, on those liquids. 37.5% of the price is lost because of their hedging strategy.  That not all you have to add the royalities associed so add another $3.75 (12.5

[PabloLafortune]

Thank you myhoney for reminding us that royalties are due on actual commodity prices, not what you hedged at....never thought of it (most non oil people would not realize this on their own).

[MyHoneyPot]

It very much like the royalities TOU gave away, top line with no costs like production/royality/transportation, impact directly your bottom line netback per boe. Done with a stroke of a pen and destroys a lot of good work.  ARC management did the same thing, to half their condensate production and made it low value.  This is really ignorance, regarding what they are doing and the long

[Trapped]

Does this mean you'll finally be exiting the stock and (more importantly) this board? You have zero attention span and it's hard to determine if you're an ARX bull or bear from day to day. Please make up your mind :) -- I am not use to investing with dummies, i will focus all my attention on POU and ERF adn CVE. They have intelligent management. 

[Quintessential1]

"it's hard to determine if you're an ARX bull or bear" Could be both.  He was pumping when the price was nearing highs.  Now that NG is in a downturrn until the winter heating season kicks in he's dumping on it.  Swing trading. Anyone else see this Peter's Report?  Trying to push the price down and buy back before the next ER and divy announcement