ARC Resources Ltd T.ARX

Management is not Pursuing Shareholders best Interests

[MyHoneyPot]

ARC management is robbing shareholders because of the false bill of goods that it is selling shareholders; however, the investment community is wise to it, and with 110-dollar condensate means everyone should wake up to it, including management. Since the inception of the deal, this marked the starting point where Terry himself who was blindly unaware as he compromised the value of the Kakwa assets with irresponsible communication regarding declines. ARX has used the VII generations merger to fund marginal quality unproven project like Attachie and Sunrise (Without Service Dates), unknow returns, while they sold off the transportation and put a cap in the most profitable play in the entire Montney, Kakwa.

ARX is currently engaged in a share buyback, if ARX were to increase the CF/FCF per share by 15% they would have to spend 1.5 billion to buy back 15% of the stock.
However, to achieve a 15% increase in CF, ARX could invest 200-225 million in Kakwa and restore its production to it premerger historical level. (On a half cycle basis) This would add 15% to CF and FCF and add at least 2 dollars a share in value without having to spend 1.5 billion in share buybacks.

200 million verses 1.5 billion that is the 1.3-billion-dollar question net to shareholders question.

This could be done quickly, and results could be recognized immediately.

So, the increase in FCF from the additional production at Kakwa would add more that 250 million dollars a year. 40 cents a share additional FCF, and with the 1.3 billion of cash do not spend on a share buyback they could essentially eliminate the debt or if they lost their minds, they could return it to shareholders in dividends. $2 dollars a share.

Management needs to start working in the best interest of the share holders the strategic direction and management is obviously rookie and we are dealing with rookie leadership.
 
IMHO

[pantono1]

This post has been removed in accordance with Community Policy

[spacegimp]

"ARX could invest 200-225 million in Kakwa and restore its production to it premerger historical level. (On a half cycle basis) This would add 15% to CF and FCF and add at least 2 dollars a share in value without having to spend 1.5 billion in share buybacks." i was sorta against this idea 6 months ago but considering current   high oil prices(and their transitory nature) and fast

[Cheadle12]

Makes one wonder if they're not just limping along in a path to get bought out by Shell for LNG Canada.. The Attachie FID timing (and plan for Attachie vs. no growth/Kakwa growth) kinda seems to imply something else may be at play here.. ~The Great Cheadle.

[MyHoneyPot]

I don't think so, Attachie comes with a lot of risk  (Treaty8) and would require a lot more than 700 million dollars ultimately, that just to get started, unoptimized. Kakwa has 4 gas plants and 1010 MMcf of processing (10X the processing of Attachie phase 1), 80,000 boe of condensate stabilization, super pads. There is likely a lot more than 2 billion of infastructure there.  When

[angelnicky]

if that is the real case then I am really disapointed in CEO/CFO Strategy.