Q: Did ARX provide a reason as to why production guidance was lowered? Also, looking for your thoughts on the company as a long term investment. It is one of my core Nat Gas holdings along with TOU. What do you like about the company and what do you dislike about the company if there is anything to dislike. Also, would you suggest another company in its place that has better long term prospects.
5i Research Answer:
The production guidance was largely self-induced by the company, due to low prices. It limited its exposure to Canadian markets and curtailed volumes at its Sunrise facility. We like ARX's valuation, cash flow and dividend (just raised). The balance sheet is in good shape. Other than the usual cyclicality of the sector, there is not a lot to dislike. We would be fine owning it and TOU, which remains our favourite. PEY is also showing a lot of strength right now.