ARC Resources Ltd T.ARX

Where is myhoneypot

[Burgersandfries]

Very nice Q....myhoneypot is a little quiet!

[Trapped]

He's probably blowing a gasket realizing that management actually knows how to run the business. Guys like that are never happy.

[CashHungry]

He's slummy it on the ERF board

[Sunsurfer12]

Annoying as he is....wouldnt mind to get his take on the hedging... If im reading the detail fs right..which i may not be...appears the cumulative hedging liability has grown to over a staggering $1b...wasnt discussed in the mda but if im reading it right..thats no chump change thst will impact mostly 2022.. For the record am long arx and hope for the best but think this hedging in this

[CashHungry]

I look at it differently. I hope they lose a ton more on hedges.  The hedges are in place, there is nothing they can do about it and the higher gas climbs the bigger the loss on the hedges.  But for '22 only 435 mil  of their 1225 mil of nat gas production is hedged leaving the majority to be sold at market prices. Bigger hedge losses correlate with higher cashflow overall

[MyHoneyPot]

Industry leading hedging loss, put in place all at the low end of the cycle and pushed out 4 years, to 2024. Dismal and not a hedging strategy, an income average strategy, that in 2021 has caused them a 40% reduction in CF, and may be higher because of the associated royality costs.  This essentially makes ARC a poor investment, with compromised returns.  Exhibit 3, Page 8 says it all

[CashHungry]

The hedges suck, I get it.  But I don't think anyone reasonably predicted gas would spike the way it has.  The good news is the hedges drop off to 223 mil in '23 and 104 mil in '24, so less damaging moving forward.  Everyone knew the hedging losses would be huge before the report.  What we didn't know was the operational excellence, the big dividend bump, and

[clamlinguine]

Arc made 24% free cash flow this quarter with poor hedges. What will it be this quarter with higher gas and oil prices? 30%? What about next year or 2023 when hedging improves? 40%? The bigger the hedging "losses" the better afaik lmao. 

[MyHoneyPot]

No its like this 50-80 percent of free cash flow returned to shareholder, it is really a LIE. 40% of all CF is wasted on Hedges, and that number is likely higher as a result of royality costs associated with those hedege. This is a major issue. (40-45%) Shareholder would rather have the dividends then have management buy back shares on their behalf, ARX just pushed forward and these share

[CashHungry]

The majority of the O&G companies I am invested in have hedges just as bad as ARC.  But none of those companies have committed to return up to 80% of free cash flow and I think it is very unlikely they are lying - people get sued and even go to prison for lying about such things. Also, they are hedging 40% of their production, not spending 40% of their CF on hedges.  There is a huge

[Trapped]

You have zero credibility. Anyone who can't recognize this as a breakout Q that will change the complexion of this company is either an idiot or just plain wrong-headed. They generated, what, $200M more in free funds flow than any analyst expected. Bigger dividend increase than expected. More shares repurchased than expected and soon to be under the 700M level. Better than expected

[CashHungry]

Where do you get 40% from?  78 Mil relized hedging expense reduced FFO by about 10% and FFF by about 14% for the third quarter.

[topdown99]

Don't waste your time CashHungry , Debbie downer throws out randon guesstimates looking for someone to talk to . Q4 will be better than Q3 and Q1 2022 will be even better than Q4 . I may just get up early to watch the fun 

[Sunsurfer12]

except it looks like they are adding to their hedges...would not be complaining if it was a bank acquisition requirement and they let it die out, but dont keep the monster alive by feeding it

[Beakr123]

It's hard to type and cry at the same time. 

[MyHoneyPot]

I will give you my thoughts you asked for them. Risk Management 430 million in risk management loss, 1080 million to year to date, more than a billion and the year is not over. It is likely ARX risk management could cost the company 1.5 billion in 2021, or over $2 dollars a share.  The reality associated with this is that this strategy is in place until 2024, if commodity prices hold up

[Sunsurfer12]

Thanks Honeypot..was reading the hedging right.... I have to agree with you, i dont understnad the hedging strategy...you hedge when you have a large capital project where you need certain return or a loan payment that you cant miss and you want to protect the return or payment...but you never hedge operating returns..you let that part ride as hedging is not cheap.,,, to me, given the low debt