Post by
mrmomo on Nov 10, 2023 10:34am
Arc Vs StrathCona......Major disconnect?
Before i say anything, let me just state that I do like Arc & its mgmt and they been a fairly well managed company over the many years. StrathC on the other hand, is imo managed by unscupulous, questionable folks who will practically do ANYTHING, even if borderline legal or not to get ahead or get a slight advantage. So with that said, let me say the following.
And this comes down to HOW these companies are being valued right now. If we take Arc, a rather large producer of mostly NG, Condy & Ngl's and almost no really significant crude for their size. So basically a 60% weighted NG producer with less than 5% crude output. And with about ~350K boepd the market is putting a EV of ~16B on the company
StrathCona on the contrary, a fairly newcommer as a publicly traded entity, with a predcited output of about ~190K boepd consisting of a mix 60% heavy/med/light crude oil. Now currently with a MCap of $5B, with an aprox debtload of $2,5B for a total EV value of $7,5B.
Now based on those numbers, WHY is Arc getting a premium for being a heavily weighted NG producer, and StrathC getting massively discounted for being a heaviy weighted towards, what are VERY profitable levels for crude? Something doesn't add up here......It should actually be the opposite, but Arc is being valued at 2X the value that Strath is......and that DOES NOT make any sense .............UNLESS some serious stock manipulation is at fault here OR SCR's numbers are totally off than what they were predicted......
Even if that were the case though.......it still doesnt explain Arc's valuations!
If this is solely a simple case of the markets being inefficient or being completely wrong "once in a blue moon" then i would assume they will promptly correct themselves one way or another by reducing that discrepancy between these two companies by either bringing down Arc's value or correctin it by massively increasing Scr's !!!
Just more of my 2 cents.......
GLTA