Second Quarter 2015 Operations Review
- ARC achieved strong second quarter 2015 production of 109,900 boe per day, which was within the second quarter guidance range of 107,000 to 110,000 boe per day. Second quarter 2015 natural gas production of 426 MMcf per day was up seven per cent and crude oil and liquids production of 38,892 barrels per day was down 12 per cent compared to the second quarter of 2014.
- Construction of the new 60 MMcf per day Sunrise gas processing facility continued ahead of schedule and under budget. TransCanada Pipelines ("TCPL") began construction of its sales meter station during the second quarter, which is slated to be completed in mid-August. Commissioning of the plant is expected to begin prior to the end of August 2015, however, actual timing will depend on the completion and tie-in of the sales meter station. See the Sunrise Photo Blog for updates.
- Second quarter funds from operations were $206.3 million ($0.61 per share), up eight per cent from the first quarter of 2015 as a result of higher realized quarter-over-quarter crude oil and natural gas prices. Higher production in the first half of 2015 was more than offset by significantly lower crude oil and natural gas prices relative to 2014. The decline in first half 2015 crude oil and natural gas prices was partially offset by realized gains on crude oil and natural gas hedging contracts of $98.7 million.
- Second quarter and first half 2015 capital expenditures, before land and net property acquisitions and dispositions, totaled $98.4 million and $227.9 million, respectively, and were focused primarily on ARC's Montney lands in northeast British Columbia. ARC drilled 12 gross operated wells in the second quarter of 2015 and 37 gross operated wells in the first half of 2015. ARC's first half 2015 activity levels were significantly lower than 2014 levels as certain capital projects were deferred to future periods in response to the decline in commodity prices.
- ARC grew its Montney landholdings in the second quarter of 2015 with the addition of 89 net sections in the highly prospective Montney oil and liquids-rich natural gas Attachie area; increasing its total Attachie land position to 279 net Montney sections.
- ARC's second quarter and first half 2015 operating costs of $8.05 per boe and $7.63 per boe were 12 per cent and 16 per cent lower than comparable periods in 2014, respectively, and were attributed to certain realized cost savings and the addition of new production at lower relative costs to operate.
Q2 2015 Production
(Three Months ended June 30, 2015)
|Crude Oil (bbl/d)||31,958||35,317|
|Natural gas (mmcf/d)||426.0||397.2|
|Natural Gas Liquids (bbl/d)||3,795||4,179|
|Total Production (boe/d)||109,900||110,165|
The following table summarizes the companies production by core area for three months ended June 30,2015:
|Core Area (1)||Total (boe/d)||Oil (bbl/d)||Condensate (bbl/d)||Gas (mmcf/d)||NGL (bbl/d)|
|South Central AB||6,202||3,970||58||11.7||228|
|Southeast SK & MB||10,067||9,766||49||1.0||81|
(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.