2018 Capital Program
ARC's $690 million capital program for 2018 is focused on keeping ARC's core Montney areas operating at capacity and profitably investing in crude oil, liquids-rich natural gas and natural gas development.
Expect annual average production for 2018 to fall in the guided range of 130,000 to 134,000 boe per day.
- Expect annual average crude oil and liquids production in the range of 37,500 to 40,500 barrels per day, of which approximately 85 per cent is crude oil and condensate.
- Expect annual average natural gas production in the range of 555 to 565 MMcf per day.
- Production volumes may be influenced by potential property acquisitions or dispositions.
- Continue to focus on cost management by targeting 2018 operating expenses in the range of $6.50 to $6.90 per boe resulting from further growth in low-cost Montney production and efficiencies realized from owning and operating our own facilities.
- Continue to execute on our strategy of ensuring long-term market access for natural gas and crude oil and liquids production.
Drill 64 gross (64.0 net) wells including:
- 16 gross crude oil wells at Tower and Ante Creek; and
- 46 gross liquids-rich natural gas and natural gas wells primarily at Sunrise, Dawson, Parkland, and Attachie.
- Invest approximately $565 million in northeast British Columbia Montney assets in 2018, consistent with 2017 investment levels.
- Keep gas plants in core Montney areas, including Ante Creek, Dawson, Parkland/Tower and Sunrise, at or near capacity through 2018.
- Advance the Sunrise Phase II gas processing facility, expected to be at full capacity by mid-year 2019, which includes repatriation of gas from third-party facilities, thereby reducing operating expenses and increasing netbacks.
- Progress the Dawson Phase IV gas processing and liquids-handling facility, expected to come on-stream in 2020.
- Advance towards commercialization by expanding the Upper Montney production at Attachie with six liquids-rich natural gas wells at Attachie West.
- Expand ARC's Lower Montney production in Dawson, Parkland/Tower, and Sunrise, and pilot the Lower Montney horizon in Attachie.
- Fund the 2018 sustaining capital requirements and the dividend with a combination of cash on-hand and cash flow generated from ARC's existing businesses, and growth capital in the 2018 budget with the redeployment of proceeds from ARC's fourth quarter 2016 divestments, and additional debt if necessary, while continuing to protect ARC's strong balance sheet.
- Maintain ARC's monthly dividend of $0.05 per share based on, among other things, the current outlook for crude oil and natural gas prices and ARC's risk management contract positions. The dividend is primarily dependent upon commodity prices and prevailing economic conditions and is reviewed regularly by the Board of Directors.
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