ARC Resources Ltd T.ARX

ARX is simply to cheap!

[MyHoneyPot]

Last quarter ARX had roughly 603 million in FCF, or a $1 per share!

A lot of the capex is really investment in plant, which wll result in future production gains. 

They invested in Attachie with long order items
They invested in Sunrise with plant Expansion
They invested in Kakwa, and at year end had more than 25 DUCS ready for production gains
They bought back 15% of the company shares
They have zero bank debt, and only long term 2-3% debt left. 

Free funds flow for 2022 of $3.42 a share, means they are trading just a little over 4* Free Funds Flow.

My guess is that we will see Kakwa at about 190,000 - 195,000 boe/day next quarter, with the low gas prices ARX will make some significant dough with liquids, expecially condensate that is trading at a real premium. 

Hedging is the story and next time oil spike up $100 WTI, expect ARX to spike with it even more, now we have companies that have zero drawn on their bank lines, and don't have to listen to the banks any more. 

I was buying more on Friday, a great opportunity to buy more. 

IMHO

[SideshowBob1]

ARX has been re-rated - in the wrong direction. The market outperformance of 2022 of energy co's is in reversal mode with the collapse of NG prices. Key question: What will ARX's net income be this year? How much lower than 2022's 2.3B will it be?  And it will be lower. The market has given ARX a beat down for this.  Cheap energy is great for the economy, and cheap NG

[MyHoneyPot]

It like this ARX is 40% liquids, and any ramp up of Kakwa will only increase liquids production. ARX says it will invest it dollars where it gets it best returns. My take on it is this, if Kakwa starts producing 200,000 boe/day the value of ARX, the 9.1 billion maket cap, that ARX is worth today. Kakwa is worth 9.1 billion all on its own. Next quarter will be the tale of the tape, and if your

[Trapped]

Congratulations, you've just described virtually every E&P in the patch. This is not an ARX problem. If you're looking at it the right way, it's an opportunity, just like all pullbacks. Cheers and GLTA ARX bulls.

[SideshowBob1]

Is buying shares on Friday looking at it the right way Trapped? Care to compare positions? Or would you prefer to measure schlongs?

[Trapped]

Umm, thanks for the offer but I think I'll pass on Option B. It's nothing personal. And if you think Friday was bad, you obviously weren't around in March 2020. That's when I picked up many of my shares and I've never stopped adding. I've discussed my position here openly on many occasions. It's a long-term hold and I don't get spooked by seasonal SP

[Quintessential1]

If you were in early and low, ARX is an easy hold. Being modestly paid to wait works for me.  GLTA ARX BULLS

[angelnicky]

its going to drift much lower than what you got in for

[Quintessential1]

Are your parents siblings?

[SideshowBob1]

I've round tripped these shale plays -90% and back on multiple occasions. I've been 'around' since 2014. It's a tough game and takes a lot of stomach. But when you trim $0.5 billion off the market cap on $41 million of shares traded on the day, its always fishy. When the bids dry up, it gets ugly fast. Buying the fear has been profitable, until it isn't.  When

[barneyj44]

This time it's different. Poor hedges have unwound, debt is a lot lower and the bankers aren't calling the shots. Drilling has already slowed and companies are throttling back production. Cherenie mentioned that  a couple of weeks ago.

[Quintessential1]

There are a lot of factors that are affecting NG this time around.  Your mention of drill rigs slowing is one of them.  Couple that with the fact that shale gas plays in the US are not as productive as they were.  Drill rigs slowing and depletion rates increasing.  LNG exports increasing.  Coal to NG power conversions and diesel to NG shipping conversions.  NG use for

[angelnicky]

If NG continues to fall, I beleive mangement of gas companies will consider stop buying back stock and will cut div to conserve cash during the recession downturn Run is over

[Quintessential1]

I believe you can't spell believe.  It is ok I do typos too.    Seriously though,  why are you such a hump?  Do you get it from your mom?  LOL GLTA ARX BULLs

[SideshowBob1]

Agreed Arc's never been sitting prettier. Years ago $2 gas was the threshold for talks of shutting in production.  Investors are sick of price volatility, every collapse in commodity prices will solidify executives commitment to capital discipline - shareholder returns before growth.  Still baffling to see the combined Arc/7G entity at a market cap of 9B. In 2016, 7G market cap

[Sunsurfer12]

per earlier post a week or so ago..by myself and MHP also echoed it..people have to realize the NG portion of the business is heavily diversified away from spot AECO with relatively little AECO at floating rates..with gas on west coast USA at a heavy premium..sometimes outrageous premium and other agreement means ARC's NG side is well protected..with condy the icing..o Other midwest pure play

[GunnerG]

What are the $800M in lease obligations for?  Seems very high.

[MyHoneyPot]

Offices my guess, likely left over from Seven Generations. 

[GunnerG]

$800M?  Now I see how VII was run into the ground, even with Kakwa. Big mess for ARC mgmt to clean up with all the VII missteps..