Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on ARC RESOURCES LTD. We currently have 23 research reports from 1 professional analysts.
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ARC RESOURCES LTD
ARC RESOURCES LTD
Reports 2Q16 Results, Strategic Cardium Acquisitions, and Revised Guidance
29 Jul 16
ARC reported second quarter results that modestly trailed consensus expectations, with production impacted by pipeline restrictions in the quarter, while cash flow came up short due to the lower volumes and cash taxes in the period. More importantly the Company entered into two strategic acquisitions in the Cardium at accretive metrics that further builds out its working interest in the region, while allowing for increased control over the pace of development. The Board of Directors has approved a $60 mm increase to the E&D capital program, and coupled with the aforementioned acquisition, results in a bump to average annual production guidance to 118,000-122,000 boe/d. Incorporating the acquisitions and new guidance results in positive moves to our forecast. In keeping our 2017e EV/DACF multiple intact, we have increased our target price to $27.00 per share and have maintained our Outperform ranking.
2Q16e Quarterly Preview
26 Jul 16
Some Recovery on Segmented Cash Flow Generation Over Q1 Though Still Down 56% Y/Y. In aggregate, the Intermediate, Mid, and Small Cap groups are expected to generate 2Q16e cash flow of $1,281 mm, $183 mm, and $53 mm, or $1.517 billion in total, that while depressed relative to the same period last year (~$2.647 billion combined), is up 17% sequentially from the prior quarter, largely on the strength of crude oil price recovery in the period. Severely weak natural gas pricing picture markedly reversed into summer, market likely to ignore financials for natural gas producers and look ahead to winter and formalization of sell-side 2018e estimates in coming months. Spot AECO natural gas prices recently crested C$2.60/mcf, and with a reasonable alignment of previously distressed NE BC Stn2 differentials, augmented by a withdrawal expected next week, view the market psyche as constructive and looking ahead, with the analogy that this market is shaping up to mirror 2012 still holding. That said, with crude oil poised to retest support levels, combined with strong stock price performance broadly observed YTD, we would characterize sentiment as slightly pessimistic in the near-term which could reduce or unwind momentum-based investment strategies that have worked thus far in 2016.
28 Jun 16
We recently had the pleasure of hosting the ARC management team to run through the Company's latest presentation. Management remains focused on maintaining the Company's balance sheet strength with targeted debt to cash flow in the range of 1.0x to 1.5x. The Company remains active in terms of its hedge book and continues to layer on hedges through to 2020 in conjunction with planned infrastructure build outs.
Intermediates, Mid Caps & Small Cap Commodity Price Update
23 Jun 16
With this publication we highlight forecast revisions associated with our commodity price update (Natural Gas Update; Crude Oil Update), reaffirming a view of commodity price recovery in 2017e. In the interim until then, 2016e Canadian oil price realizations are up ~11% in the synthetic and Edmonton Light streams, with heavy WCS crude up ~20% which is amplified by Canadian oilsands output curtailments. While 2016e Canadian natural gas prices are projected to be ~20% lower, we expect much of this effect to be mitigated by strong hedging positions this year, and remain focused on price recovery next year with very strong increases reflected in both the strip and our revised forecast. Overall, broad valuations are flat to slightly higher coming out of this exercise, with oil/ liquids levered entities observing the highest 2017e CFO uptick. We remain constructive on the space, though the market will need to look past a trough of potentially weak pricing this summer.
Reports Strong 1Q16 Results
29 Apr 16
ARC reported strong first quarter results that came in ahead of both our expectations and the consensus in a difficult period that saw a precipitous drop in commodity prices.The Company capped off the first quarter in a position of strength both financially and operationally, with a pristine balance sheet and the Company’s Montney assets exceeding expectations. Management has maintained its previously announced 2016e guidance, although given first quarter results we would not be surprised to see positive revisions to annual guidance as the year progresses. First quarter results remain supportive of our view on this name as one of our top ideas in the yield space, and thus we have maintained our Outperform ranking along with our $22.00 per share target price.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
Opuama production restarts
21 Feb 17
Eland has confirmed the successful restart of exports from OML 40 through the new shipping alternative that it has implemented. Sales from the export terminal are expected imminently, re-establishing cash generation for Eland. Cash at YE16 was US$11.1m which has since reduced to US$5.9m, mainly reflecting initial operating expenses for the shipping alternative. While it is early days, Eland has demonstrated its ability to restart exports and production from OML 40 following the shut-down of the Forcados terminal a year ago. Production to date is averaging around 7kbd and we expect that to ramp up as Opuama operational performance improves. At US$55/bbl Brent, we estimate Eland is generating a net cash margin of around US$25/bbl. We reiterate our Buy recommendation and 95p per share Target Price.
20 Feb 17
Hayward Tyler Group* (HAYT): Trading update and financial position (CORP) | Petra Diamonds (PDL): Interim results (BUY) | Gemfields* (GEM): Interim results (CORP) | Premaitha Health* (NIPT): Middle East momentum (CORP) | Sound Energy (SOU): Acquisition update and TE-8 well spud (HOLD) | Proactis* (PHD): Interim trading on track (CORP) | 7digital* (7DIG): Automotive contract win (CORP)
Small Cap Breakfast
24 Feb 17
GBGI—Schedule One update from integrated provider of international benefits insurance. Raising £32m at 150p. Admission expected tomorrow. Anglo African Oil & Gas— Admission expected early March. Acquiring stake in producing near offshore field in the Republic of the Congo. Guinness Oil & Gas Exploration—Publication of prospectus. Seeking to raise £50m and invest in 15 exploration companies at launch, with plans to grow the portfolio to 30 positions during its lifetime. Issue closing 23 Feb.
E&P projects ramp-up and disposals to support 2017
20 Feb 17
After the publication of the annual results, we have updated our model and highlight the key points. Q4 16 key highlights As a reminder, the company reported results of $1.8bn, $0.5bn below expectations for Q4 16. One-offs were $763m for the quarter mainly driven by the integrated gas division related to the weakening Australian dollar and the deferred tax position in Malaysia. By division: 1) Integrated gas’s clean earnings came in at $907m, down 27% yoy. The decrease is driven by the step-up in depreciation resulting from the BG acquisition and the increase associated with the start-up of Gorgon. Other items related to the BG Group consolidation impacted the division. The impact of higher oil prices was more than offset by the decline in LNG prices. Q4 16 production was 908kbpd, up from 633kbpd a year ago thanks to the integration of BG. For the full year, the integrated gas division reported $3.7bn of clean earnings, -27% compared to the previous year. 2) The upstream division showed a small profit of $54m, compared to a loss of $1bn a year earlier. Higher oil prices and increased volumes thanks to the BG integration supported the results driven by an improved operational performance. For the full year, the upstream division reported a loss of $2.7bn compared to a loss of $2.25bn in 2015. 3) Downstream’s earnings came in 12% lower yoy to $1.34bn, impacted by lower trading and refining margin and higher taxation. The results are split between oil products ($823m, down 39% yoy) and chemicals ($516m, up 184%). In oil products, refining trading came in at $77m, down from $771m a year ago. Marketing came in at $746m compared to $631m a year ago on lower operating expenses. Chemicals came in higher on stronger industry conditions driven by the tight supply in Asia and an improved operating performance. For the full year, the results came in at $7.2bn, down 26% yoy. Cash flow position Cash flow from operating activities for Q4 16 was $9.2bn, capex $6.9bn, the dividend $2.3bn, and disposals of $2.7bn which helped to reduce debt to $73bn. Gearing at the end of 2016 was 28%. The dividend was $0.47. The company is close to selling assets for $5bn, which is good news as the group still has to sell $20bn to remain on track with its deleveraging. Capex totalled $26.9bn for the full year 2016, lower than expected and it plans to reduce this in 2017 to $25bn, in the low end of the 2017-20 range of $25-$30bn. The CEO highlighted: “Production and LNG volumes included delivery from new projects, with the ramp-up continuing in 2017 and 2018. Meanwhile the company operates at an underlying cost level that is $10bn lower than Shell’s and BG’s combined only 24 months ago. Shell is gaining momentum on divestments, with some $15bn completed in 2016, announced, or in progress, and we are on track to complete our overall $30bn divestment programme as planned. Strategy is starting to pay off and in 2017 we will be investing around $25bn in high quality, resilient projects. I’m confident 2017 will be another year of progress for Shell to become a world-class investment”