March 23, 2019

ARC Resources Ltd (ARX)

 

 

ARC Resources Ltd. (ARX) is one of Canada’s large oil and gas companies.  The company was founded in 1996 and has since purchased numerous properties throughout western Canada (focused within 6 key areas).  Since its inception, ARC has rewarded shareholders with over $4 billion in cash distributions.  The focus of the company has never wavered by becoming a self-proclaimed “Premier blue chip conventional oil and gas trust [the company has since switched over from the energy trust structure] in Canada as measured by quality of assets, management expertise, and long-term investor returns.  ARC is focused on its mantra of “risk managed, value creation” going forward.  Their company vision is as follows:

 

A leading energy producer
Results focused through risk managed value creation
Committed to superior, long-term financial returns

 

We:

Apply unique expertise and discipline
Recognize leadership development as critical to our success
Clearly communicate our strategies

 

Where:

Action and passion are rewarded
Respect of individuals is paramount
Community and environment are core commitments

 

ARC (ARX) first broke onto the scene with the purchase of 21 properties from Mobil Oil in Western Canada.  Their IPO sold off 18 million units at $10 per unit.  In 1997, the company saw $94 million worth of acquisitions.  This focus on buying substantial amounts of property was paramount in the early years.  The company seen its total market capitalization rise to almost a half billion dollars by 1999 as the company purchased Starcor Energy Royalty Fund and Orion Energy Trust.  By 2001, ARC had completed the acquisition of Startech Energy, boosted production to 16,000 boe/per day, and had reached the $1 billion market capitalization level.  In 2003 the company made the largest acquisition in its history when it purchased Star Oil and Gas Ltd., for $710 million, which significantly expand their production capacity to 58,000 boe/per day.  ARC (ARX) has continued its large capital expenditures since then, most notably its $462 million purchase of the Pembina and Redwater fields from Exxon Mobil Canada in 2005.  They also began to pioneer innovative technology in the field of horizontal drilling in that year as well.

 

The most recent news to come out of ARC Resources (ARX) headquarters is their massive 2012 capital expenditure budget.  It includes roughly $760 million dedicated to driving growth on a large scale.  John Dielwart, CEO of ARC stated, “”With a clear focus on value creation, we will continue to invest the majority of our capital expenditures in our oil and liquids-rich natural gas opportunities.  With outstanding opportunities in our portfolio and a $760 million capital budget in 2012, we expect to achieve approximately a 12 per cent year-over-year increase in our total production volumes to 92,500 boe per day, highlighted by an estimated 15 per cent increase in our liquids production.”  Overall, the company looks to drill almost 200 new wells in 2012, with 179 those focusing on oil production.

 

Shares of ARC (ARX) are currently priced at $25, with a 52-week trading high of $28.67 and a low of $19.40.  It’s annual dividend of $1.20 gives the company a dividend yield of 4.8%.  Its current Price-to-Earnings ratio is 22, and that is about average within the sector.  While a 4.8% dividend is certainly nothing to ignore, ARC represents a little more of a growth play than several of its Canadian energy competitors.  If they manage that massive capital expenditures budget advantageously, the company could continue to see substantial growth going forward.

 

 

ARC Resources Ltd. (ARX) Technical Analysis:

ARX trend analysis

ARX is trading on a down trend, Get your Free ARX trend analysis report.

ARC Resources Ltd. (ARX) Stock Graph:

TSE ARX

ARC Resources Ltd. (ARX) Dividend Metrics:

TickerNamePriceDividend YieldPayout RatioDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
ARXARC Resources Ltd23.945.01120.210.1111946-11.335980