Sunrise + Attachie - NE BC - Treaty8 Treaty8 issues represent risk, and a road block to devlopment and the cost to remove this roadblock is currently unknown meaning that the economics of the projects are unknow.
1/2 Cycle Kakwa Development With oil at almost $112 U.S. means condensate is trading at $150 Canadian. Each boe of production at Kakawa with $8 dollar U.S. gas is 107 dollars Canadian.
With all the spare plant capacity at Kakwa new production brought on will have 10X returns regarding every dollar invested. The best returns of any energy company should be through the drill bit and those returns are enhanced by improved infastructure utilization, which will improve the entire economics of the play area.
Buybacks of Shares
5% buyback of Arx share would mean buying back 34 million shares for a price of 600 million dollars and this would have the same impact as adding 6,900 boe a day.
FCF share = 60 cents Funds from Operations share = 1.08 (Q1 Results 2022)
So after buying back 34 million shares FCF would improve by 20 million dollars in a quarter it would only take 7.5 years to pay back to pay the 600 million dollars back
If you invested 600 million in Kakwa and got a 10X ROI on a half cycle return basis you would get 6 billion back on your investment, and improve the facility utilizaiton at Kakwa. I don't think it would take 7.5 years either.
There is no comparision in regards to investing in Kakwa, and buying back shares especially at these commodity prices.
With the production mix at Kakwa currently you are getting $107 dollars canadian a boe for production.
Kakwa well examples In this example here are actual results for pay 5-16 east - 5 wells production for 158 days produced an average of 147,000 boe each
5 well *147,000 boe/day * $107 boe = $78.6 million dollars in just over 5 months, unhedged.
ARC in their shareholder broadcast said thay they were going to raise the production ceiling at Kakwa to 200,000 boe a day. ( A production increase of approximately 25,000 boe/day)
Adding production at Kakawa at the current prices you can expect to get 10X returns on every dollar invested.
I would only buy back shares for the dollars that are left over from ramping up 1/2 cycle production at Kakwa.
IMHO