Second Quarter 2014 Operations Review
- ARC achieved record second quarter production of 110,165 boe per day, 18 per cent higher than the second quarter of 2013 and four per cent higher than the first quarter of 2014. Higher production was primarily attributed to production from new wells at Parkland/Tower and Sunrise and continued strong production at Ante Creek.
- Second quarter and first half 2014 commodity sales revenue of $567.0 million and $1.1 billion was up 41 per cent and 43 per cent, respectively, relative to comparable periods of 2013 due to higher production and higher realized crude oil and natural gas prices. Second quarter funds from operations were a record $295.8 million ($0.93 per share), up 47 per cent from the second quarter of 2013. First half funds from operations of $588.1 million ($1.86 per share) were up 46 per cent from the first half of 2013. The increase was primarily due to higher production and higher crude oil and natural gas prices in 2014.
- Second quarter and first half 2014 capital expenditures totaled $236.1 million and $478.1 million, respectively. ARC drilled 37 gross operated wells in the second quarter (18 oil, seven liquids-rich natural gas and 12 natural gas. Year-to-date, ARC has drilled 97 gross operated wells (61 oil, 16 liquids-rich natural gas and 20 natural gas).
- During the second quarter and first half of 2014, ARC spent approximately $16.7 million and $22.4 million, respectively, to acquire lands primarily in the Montney region of British Columbia and Alberta. ARC divested certain non-core shallow gas assets located in southwestern Saskatchewan for gross proceeds of approximately $33 million during the second quarter of 2014.
- ARC closed the quarter with a strong balance sheet including total credit facilities of $2 billion and debt of $903.7 million drawn. ARC had available credit of approximately $1 billion after a working capital deficit. Net debt to 2014 annualized funds from operations ratio was 0.9 times and net debt was approximately nine per cent of ARC's total capitalization at the end of the second quarter.
- ARC’s Board of Directors approved an increase to the 2014 capital program from $915 million to $975 million. The additional funds will primarily be allocated to certain strategic initiatives in the BC and Alberta Montney regions.
Q2 2014 Production
(Three Months ended June 30, 2014)
|Crude Oil (bbl/d)||35,317||31,635|
|Natural gas (mmcf/d)||397.2||340.8|
|Natural Gas Liquids (bbl/d)||4,179||2,859|
|Total Production (boe/d)||110,165||93,436|
The following table summarizes the companies production by core area for three months ended June 30,2014:
|Core Area (1)||Total (boe/d)||Oil (bbl/d)||Condensate (bbl/d)||Gas (mmcf/d)||NGL (bbl/d)|
|South Central AB||8,615||3,877||72||26.7||222|
|Southeast SK & MB||10,773||10,494||47||1.0||68|
(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.