Here is a link to the Peters Conference, Terry's statement regarding share value at mid cycle pricing, ARX considered the NAV of the shares to be $20 dollars, and this was represented as the compelling metric ARX management was using to justify the share buybacks. ( Time 6:40 )
Peters Conference Jan 18,2022 This share price on Jan 18, 2022 the day of this presentation, the share price was
$13.87. So the same arguement does not hold water for share buybacks today, the shares have traded over 19 dollars which fully values and mid cycle NAV, they are no longer trading at Jan 18, 2022 when the shares were trading at $13.87.
TOU is much smarter than ARX and understands this and that is why they are giving back Special Dividends, Arc is fully now fully valued from a mid cycle price perscpective, and buying back shares now you are putting shareholder capital at risk in this current high price commodity environment.
I would also say that share buybacks simply adds additional risk especially in ARX case,
- ARX have failed on adding any meaningful production growth
- NE BC assets are at greater risk with an uncertain regulatory enviroment that exists today
So it is my believe that ARX management are gambling with share holder returns and they know it. Also i would say there is no quick fix for NE BC, and a incremental amount of risk associated with those assets.
Arx management should stop the buyback, and invest in 1/2 cycle production grown, and meaningful dividends for the shareholders. By their own admission the ARX shares are fully valued in a mid cycle pricing enviroment, and with the inability to go forward with Attachie and Sunrise, you will have to determine for yourself, when those assets will be fully values, and in what commodity enviroment. A lot of risk and uncertainity.
IMHO