ARC Resources Ltd T.ARX

Anyone think Arc will buyout there poor hedges

[barneyj44]

that we ended up with the purchase of  VII Generations.  
-- Pioneer Natural Resources Co., the biggest oil producer in the Permian Basin, closed out almost all its hedges for this year, indicating a bullish outlook for crude prices. The move will cost $328 million spread over the course of 2022, Pioneer said in a filing Wednesday, but leaves the company well positioned to bank any uplift in oil prices. The company also said it bought back $250 million of its own shares during the fourth quarter.

[Beakr123]

That's a bold move and statement. Anyone here know what the cost of ARX doing that might be? 

[Shaleguy]

Don't know the cost but it would be the mark to market when and if they did. If prices stay high it would be short term pain in the front quarter, for future upticks in free cash flow. At some point it becomes less risky, maybe the time is now In hedging timing is everything as we have seen.

[Sunsurfer12]

Disagree..the hedges are already marked to market every quarter...the only thing a hedge buyback would do is adjust for any difference from last qs market value and then remove balance sheet liability for the balance of the buyout...little if any p&l impact i believe..

[Shaleguy]

Correct, and the losses will show each quarter until all done But by unwinding now you look better in the future . Quick hands up who thinks the market is rationale? Having higher earnings over the next three quarters will look better. You would only close out the hedges if you felt prices were going to rise. In effect you are reversing the swap. So if prices rise from the time you close out you

[Tothemoon2]

As a holder of PXD I support this move.