Third Quarter 2014 Operations Review
- ARC achieved record third quarter production of 115,530 boe per day, 22 per cent higher than the third quarter of 2013 and five per cent higher than the second quarter of 2014. Year-to-date production of 110,501 boe per day was 17 per cent higher than 2013. New wells at Parkland/Tower and Sunrise, as well as continued strong production at Ante Creek were the primary drivers of higher third quarter and year-to-date 2014 production.
- ARC's third quarter oil and liquids production of 44,789 barrels per day was 23 per cent higher than the third quarter of 2013 and year-to-date liquids production was a record 44,288 barrels per day, 20 per cent higher than 2013. Higher liquids production was attributed to new wells coming on-stream including oil wells at Tower, liquids-rich gas wells at Parkland, and continued strong production at Ante Creek.
- Preparation for construction of the new 60 mmcf per day Sunrise gas processing facility began late in the third quarter. Initial engineering, design, procurement and field studies have commenced and construction will ramp up in the fourth quarter of 2014. ARC plans to commission the new facility in the fourth quarter of 2015 and expects to fill the facility by year-end 2015. See Sunrise Photo Blog for construction updates.
- Third quarter funds from operations were $284.2 million ($0.89 per share), up 29 per cent from the third quarter of 2013. Year-to-date funds from operations of $872.3 million ($2.76 per share) were up 40 per cent from 2013. The increase in third quarter and year-to-date 2014 funds from operations was due to higher production and natural gas prices in 2014 and higher average crude oil prices for the year-to-date period. Third quarter and year-to-date 2014 capital expenditures totaled $218.2 million and $696.3 million, respectively. ARC drilled 56 gross operated wells in the third quarter of 2014 and 153 gross operated wells in the first nine months of 2014.
- ARC closed the quarter with a strong balance sheet including total credit facilities of $2.1 billion and debt of $988.3 million drawn. The expansion of the Master Shelf Agreement from US$225 million to US$350 million increased ARC's total credit capacity from $2 billion to $2.1 billion. At September 30, 2014, ARC had available credit of $1 billion after a working capital deficit. Net debt to 2014 annualized funds from operations ratio was 1.0 times and net debt was approximately 11 per cent of ARC's total capitalization at the end of the third quarter; both metrics are well within ARC’s target levels.
Q3 2014 Production
(Three Months ended September 30, 2014)
|Crude Oil (bbl/d)||35,871||31,438|
|Natural gas (mmcf/d)||424.5||348.9|
|Natural Gas Liquids (bbl/d)||5,056||2,687|
|Total Production (boe/d)||115,530||94,515|
The following table summarizes the companies production by core area for three months ended September 30,2014:
|Core Area (1)||Total (boe/d)||Oil (bbl/d)||Condensate (bbl/d)||Gas (mmcf/d)||NGL (bbl/d)|
|South Central AB||8,266||4,014||71||23.8||206|
|Southeast SK & MB||10,321||9,996||49||1.1||95|
(1) Provincial and directional references: AB is Alberta, BC is British Columbia, SK is Saskatchewan, MB is Manitoba, NE is northeast, NW is northwest, SE is southeast and SW is southwest.