ARC Resources Ltd T.ARX

TD Note

[retiredcf]

Canadian Natural acquires Storm, clearly constructive on natural gas: While the acquisition only accounts for 1% of CNQ's EV, it adds ~8% to its Canadian natural gas production base. We believe the deal reflects management's constructive outlook for natural gas and Western Canadian LNG.

[Farmer12]

Storm Q4 production will be very roughly 5k BOE/day oil and 27k gas (6/1). This transaction was for $960 million and 960 million /32000 bpde = ~$30,000 per barrel production. If you apply that metric to Arc, at 350000 boe/day you get a value of about $10.5 billion compared to current market evaluation of about $8.78 billion, or a comparative discount of about 20%. At a similar evaluation, Arc

[clamlinguine]

Arc is 40 % liquids compared to Storms 19% so to say Arc is 20 % undervalued by the sale metrics is probably conservative.

[Quintessential1]

I don't ridicule anyone for taking a stab at a valuation of the company and consequently the share price.  I applaud it. By production metrics ARX is way undervalued however,  until the hedging losses fall off and the balance sheet starts to reflect that production in actual profit especially EPS (let's face it that's the metric the algos track) we won't see significant

[MyHoneyPot]

It sound to be like you are saying two things that are directly opposed to each other in the same sentence.  Increase dividends while incurring massive hedging losses, will not happen, you have very real limits on increasing dividends with industry leading hedging losses. Hedging losses are real regardless of how much ARC shareholders want to ignore them.  Full Cycle Projects, Sunrise

[Quintessential1]

The buy backs will keep the shorts at bay as the hedges come off in future ERs . Short all you want.  You can't hurt the future production revenues and when the longs short squeeze you in the future we will add your money to ours. 

[angelnicky]

should there be a management change, this stock price will jump upward