ARC Resources Ltd T.ARX

Dry Gas Pursuit of ARX management

[MyHoneyPot]

Kakwa 80% of ARX's Liquids
80% of Arx liquids production in Kakwa, 85% of their condensate lite oil is produced in Kakwa.
Management objects are to grow dry gas production and leave liquids production flat. That I what their action will accomplish.

Management Strategy Sell Low, shut in Produciton

Selling the floor on Kakwa at $50 dollar oil means the oil production is cost effective enough that at $50 dollars they can sustain operations, in the December presentation they suggest they can do this at less than $40-dollar WTI.

Capping the ceiling on Kakwa with a 2% decline objective, when we know we have more than 40,000 boe of ½ cycle liquids rich production capacity, suggest to the shareholders that management is pursuing the bottom of the barrel. Management efforts are all about saving $1 a boe base on 2% of the $50 dollar hedge. 

Risk Reward - They need a Finance Person

Save $1 and lose $35 dollars
Management objective all along, is to save a 1-dollar U.S. and forfeit 35 dollars U.S. to the upside. A penny wise, 35 dollars upside a fool. Filling in the half cycle production would go a long way to mitigating the worst risk management in the entire industry.

Operations People Need a Christmas Miracle to Compensation for Management

While the operation teams works their tails off to get the decline reductions (2%), management we a stroke of a pen wipes out all their good work now and for years to come. Credit Bibby handy work for this accomplishment. He will never make back his hedging losses. 

ARX Management is Misaligne with the World

While the rest of the world is pursuing Liquids Rich Gas plays, ARC management want to pursue dry gas like sunrise, and put a cap on its liquid’s rich growth of the company. That is exactly what their actions have done. 

Their actions speak for themselves. 

IMHO

[integrity11]

MHP I am very curious  to know the size of your short position in ARX if you are ok with sharing. Although I am disappointed with ARXs recent performance I actually still believe we will see a very nice share price increase over the next 5 months.

[MyHoneyPot]

Its amazing they keep the CFO, they need a new risk management team.  Last quarter this is what it looked like..(Millions) Revenue from commodity sales       1,582.6 Loss on risk management contracts (524.5)  Total revenue, interest and other income and loss on risk management contracts                       &

[GunnerG]

integrity, we are trying to make MHP of no consequence of the BB.  IGNORE MHP Your question in response to his posts only gives him what he wants, attention.  He only repeats himself 4-10 times a day looking for anyone to respond, and you did.