CALGARY, AB, July 31, 2025 /CNW/ - (TSX: ARX) ARC Resources Ltd. ("ARC" or the "Company") today reported its second quarter 2025 financial and operational results and provided 2025 revised guidance.
HIGHLIGHTS
Second Quarter Results
Attachie Development Agreement with Tsaa Dunne Za Energy
Revised 2025 Guidance
ARC's unaudited condensed interim consolidated financial statements and notes (the "financial statements") and Management's Discussion and Analysis ("MD&A") as at and for the three and six months ended June 30, 2025, are available on ARC's website at www.arcresources.com and under ARC's SEDAR+ profile at www.sedarplus.ca. The disclosure under the section entitled "Non-GAAP and Other Financial Measures" in ARC's MD&A as at and for the three and six months ended June 30, 2025 (the "Q2 2025 MD&A") is incorporated by reference into this news release.
(1) |
ARC has adopted the standard six thousand cubic feet ("Mcf") of natural gas to one barrel ("bbl") of crude oil ratio when converting natural gas to barrels of oil equivalent ("boe"). Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different than the energy equivalency of the 6:1 conversion ratio, utilizing the 6:1 conversion ratio may be misleading as an indication of value. |
(2) |
Throughout this news release, crude oil ("crude oil") refers to light, medium, and heavy crude oil product types as defined by National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Condensate is a natural gas liquid as defined by NI 51-101. Throughout this news release, natural gas liquids ("NGLs") comprise all natural gas liquids as defined by NI 51-101 other than condensate, which is disclosed separately. Throughout this news release, crude oil and liquids ("crude oil and liquids") refers to crude oil, condensate, and NGLs. |
(3) |
Represents average daily production divided by the diluted weighted average common shares outstanding for the respective three months ended June 30. |
(4) |
This is a specified financial measure. See "Non-GAAP and Other Financial Measures" of this news release and in the Q2 2025 MD&A for additional disclosure, which is incorporated by reference. |
(5) |
The purchase price was approximately $1.6 billion for the Kakwa Assets before purchase price adjustments and unrelated equipment and land. |
(6) |
Refer to the section entitled "About ARC Resources Ltd." contained within the Q2 2025 MD&A for historical capital expenditures, which information is incorporated by reference into this news release. |
FINANCIAL AND OPERATIONAL RESULTS
(Cdn$ millions, except per share amounts(1), boe amounts, |
Three Months Ended |
Six Months Ended |
|||
and common shares outstanding) |
March 31, 2025 |
June 30, 2025 |
June 30, 2024 |
June 30, 2025 |
June 30, 2024 |
FINANCIAL RESULTS |
|||||
Net income |
404.7 |
396.1 |
239.5 |
800.8 |
424.9 |
Per share |
0.69 |
0.68 |
0.40 |
1.36 |
0.71 |
Cash flow from operating activities |
1,013.0 |
699.1 |
543.0 |
1,712.1 |
1,179.3 |
Per share |
1.72 |
1.19 |
0.91 |
2.91 |
1.97 |
Funds from operations |
857.0 |
682.1 |
502.8 |
1,539.1 |
1,109.7 |
Per share |
1.45 |
1.17 |
0.84 |
2.62 |
1.85 |
Free funds flow |
399.9 |
185.8 |
(29.5) |
585.7 |
72.8 |
Per share |
0.68 |
0.32 |
(0.05) |
1.00 |
0.12 |
Dividends declared |
111.3 |
110.9 |
101.6 |
222.2 |
203.2 |
Per share |
0.19 |
0.19 |
0.17 |
0.38 |
0.34 |
Cash flow used in investing activities |
429.3 |
471.2 |
643.4 |
900.5 |
1,143.2 |
Capital expenditures |
457.1 |
496.3 |
532.3 |
953.4 |
1,036.9 |
Long-term debt |
1,072.0 |
1,990.8 |
1,379.5 |
1,990.8 |
1,379.5 |
Net debt(2) |
1,260.5 |
1,289.2 |
1,477.9 |
1,289.2 |
1,477.9 |
Common shares outstanding, weighted average diluted (millions) |
589.7 |
585.0 |
598.2 |
587.4 |
598.3 |
Common shares outstanding, end of period (millions) |
585.0 |
582.5 |
596.7 |
582.5 |
596.7 |
OPERATIONAL RESULTS |
|||||
Production |
|||||
Crude oil and condensate (bbl/day) |
94,334 |
100,399 |
74,713 |
97,384 |
78,693 |
Natural gas (MMcf/day) |
1,411 |
1,307 |
1,286 |
1,359 |
1,304 |
NGLs (bbl/day) |
42,821 |
38,999 |
40,994 |
40,899 |
45,203 |
Total (boe/day) |
372,265 |
357,228 |
330,046 |
364,705 |
341,187 |
Average realized price |
|||||
Crude oil ($/bbl)(2) |
87.90 |
82.56 |
100.28 |
85.00 |
91.10 |
Condensate ($/bbl)(2) |
99.28 |
85.35 |
103.73 |
92.09 |
98.96 |
Natural gas ($/Mcf)(2) |
4.19 |
3.19 |
1.86 |
3.71 |
2.53 |
NGLs ($/bbl)(2) |
31.98 |
20.39 |
21.69 |
26.42 |
23.85 |
Average realized price ($/boe)(2) |
44.48 |
37.81 |
33.35 |
41.20 |
35.49 |
Netback per boe |
|||||
Commodity sales from production ($/boe)(2) |
44.48 |
37.81 |
33.35 |
41.20 |
35.49 |
Royalties ($/boe)(2) |
(4.86) |
(3.71) |
(4.19) |
(4.29) |
(4.16) |
Operating expense ($/boe)(2) |
(4.85) |
(5.17) |
(5.51) |
(5.01) |
(4.87) |
Transportation expense ($/boe)(2) |
(5.55) |
(5.36) |
(5.22) |
(5.46) |
(5.29) |
Netback per boe ($/boe)(2) |
29.22 |
23.57 |
18.43 |
26.44 |
21.17 |
TRADING STATISTICS(3) |
|||||
High price |
29.05 |
31.56 |
26.18 |
31.56 |
26.18 |
Low price |
23.85 |
22.63 |
23.45 |
22.63 |
19.44 |
Close price |
28.93 |
28.71 |
24.41 |
28.71 |
24.41 |
Average daily volume (thousands of shares) |
3,674 |
3,559 |
3,648 |
3,616 |
3,498 |
(1) |
Per share amounts, with the exception of dividends, are based on weighted average diluted common shares. |
(2) |
This is a specified financial measure. See "Non-GAAP and Other Financial Measures" of this news release and in the Q2 2025 MD&A for additional disclosure, which information is incorporated by reference. |
(3) |
Trading prices are stated in Canadian dollars on a per share basis and are based on intra-day trading on the Toronto Stock Exchange. |
OUTLOOK
ARC remains committed to executing on its strategy to grow free funds flow per share through profitable Montney investments. In the near-term, ARC is focused on operational execution at Attachie Phase I, and optimizing the recently acquired Kakwa Assets and capital efficiencies across its remaining assets. This is expected to drive record production and condensate volumes in the second half of the year, and at strip prices(1), generate between $1.3 and $1.5 billion of free funds flow in 2025. For the third consecutive year, ARC is committed to returning essentially all free funds flow to shareholders through the base dividend and share repurchases.
ARC continues to execute its long-term strategy as evidenced through the strategic consolidation at Kakwa, and by advancing its second phase at Attachie. At its base price deck (US$70 per barrel WTI; US$3.75 per Mcf NYMEX), the long-term plan through 2028 is expected to deliver a five per cent production CAGR(2), re-investing approximately 50 per cent of funds from operations, and generating a 20 per cent return on average capital employed(3). ARC remains committed to its long-standing principles of safety, capital discipline, and financial strength to ensure long-term profitability.
Corporate Update
Attachie Development Agreement with Tsaa Dunne Za Energy
ARC executed an agreement with TDZE, a limited partnership owned by HRFN, for the earning and development of mineral tenure in northeast BC. The new lands encompass 36 contiguous sections in the condensate-rich region of the Montney, directly adjacent to ARC's Attachie development.
These lands are initially considered to be integrated into ARC's long-term development strategy at Attachie. Upon development, the agreement increases ARC's Attachie position by greater than ten per cent to a total of approximately 360 sections, bringing even greater scale to one of ARC's most profitable Montney assets.
(1) |
Based on forward pricing as of July 10, 2025 of US$66 per barrel WTI; C$1.90 per Mcf AECO. |
(2) |
Production CAGR defined as the production compounded annual growth rate. |
(3) |
This is a specified financial measure. See "Non-GAAP and Other Financial Measures" of this news release and in the Q2 2025 MD&A for additional disclosure, which information is incorporated by reference. |
Operations Update
Attachie
Attachie production during the second quarter averaged 26,833 boe per day including approximately 61 per cent or 16,254 barrels per day of condensate and natural gas liquids. Production emulsion, planned maintenance, and unplanned third-party downtime contributed to lower than anticipated production in the second quarter.
ARC has resolved the production emulsion issue, and the facility is operating as expected. Attachie production reached 39,000 boe per day at a point in June, including strong condensate production of approximately 21,000 barrels per day, and ARC's three most recent pads have been successfully drilled and completed as planned. This is expected to support average production between 35,000 and 40,000 boe per day during the second half of 2025 (approximately 60 per cent condensate and liquids, and 40 per cent natural gas).
ARC continues to optimize the well design to maximize capital efficiencies. At one of its recent trial pads, the average well produced approximately 107,000 barrels of condensate over the initial six months on production (approximately 580 barrels per day) exceeding expectations of ARC's original well design.
ARC is investing approximately $50 million in 2025 towards site clearance and long-lead items in preparation for a positive investment decision on Attachie Phase II. ARC intends to formalize this decision with the release of its 2026 capital budget in November.
Kakwa
Kakwa production averaged 169,622 boe per day (54 per cent crude oil and liquids) during the second quarter, including approximately 65,500 barrels per day of condensate (exclusive of the acquired Kakwa Assets).
Inclusive of the acquired Kakwa Assets, ARC expects Kakwa production to average between 205,000 and 210,000 boe per day (approximately 57 per cent crude oil and liquids, 43 per cent natural gas) during the second half of the year.
Sunrise
During the second quarter, ARC elected to curtail between 75 and 200 MMcf per day of natural gas production at Sunrise in response to low natural gas prices in Western Canada. Production is currently curtailed by approximately 360 MMcf per day, and will be fully restored when natural gas prices recover to levels that support ARC's return requirements.
2025 Guidance
ARC has revised 2025 guidance to incorporate the Kakwa Acquisition, and adjust for natural gas curtailments that occurred throughout the second quarter and continued in the third quarter.
ARC's 2025 original and revised guidance are based on various commodity price scenarios and economic conditions. Certain guidance estimates may fluctuate with commodity price changes and regulatory changes. ARC's guidance provides readers with the information relevant to Management's expectations for financial and operational results for 2025. Readers are cautioned that the guidance estimates may not be appropriate for any other purpose.
(1) |
Refer to the section entitled "About ARC Resources Ltd." contained within the Q2 2025 MD&A for historical capital expenditures, which information is incorporated by reference into this news release. |
ARC's 2025 original and revised guidance and a review of 2025 year-to-date results are outlined below:
2025 Guidance |
2025 Revised |
2025 YTD Actual |
% Variance from |
|
Production |
||||
Crude oil and condensate (bbl/day) |
104,000 - 110,000 |
107,000 - 112,000 |
97,384 |
(8) |
Natural gas (MMcf/day) |
1,400 - 1,420 |
1,390 - 1,420 |
1,359 |
(2) |
NGLs (bbl/day) |
42,000 - 48,000 |
43,000 - 48,000 |
40,899 |
(5) |
Total (boe/day) |
380,000 - 395,000 |
385,000 - 395,000 |
364,705 |
(5) |
Expenses ($/boe)(1)(2) |
||||
Operating |
4.50 - 4.90 |
5.00 - 5.50 |
5.01 |
— |
Transportation |
5.00 - 5.50 |
5.00 - 5.50 |
5.46 |
— |
General and administrative ("G&A") expense before share-based compensation expense |
0.90 - 1.10 |
1.00 - 1.10 |
1.17 |
6 |
G&A - share-based compensation expense |
0.25 - 0.35 |
0.30 - 0.40 |
0.40 |
— |
Interest and financing(3) |
0.70 - 0.80 |
0.90 - 1.00 |
0.75 |
(17) |
Current income tax expense as a per cent of funds from operations(1) |
10 - 15 |
5 - 10 |
11 |
10 |
Capital expenditures ($ billions)(4) |
1.6 - 1.7 |
1.85 - 1.95 |
1.0 |
n/a |
(1) |
This is a specified financial measure. See "Non-GAAP and Other Financial Measures" of this news release and in the Q2 2025 MD&A for additional disclosure, which information is incorporated by reference. |
(2) |
2025 annual guidance excludes potential impact from tariffs. |
(3) |
Excludes accretion of ARC's asset retirement obligation. |
(4) |
Refer to the section entitled "About ARC Resources Ltd." contained within the Q2 2025 MD&A for historical capital expenditures, which information is incorporated by reference into this news release. Guidance for capital expenditures does not include any potential impact from tariffs. |
FINANCIAL AND OPERATIONAL RESULTS
Production
Funds from Operations, Cash Flow from Operating Activities, and Free Funds Flow
The following table details the change in funds from operations for the second quarter of 2025 relative to the first quarter of 2025.
Funds from Operations Reconciliation |
$ millions |
$/share(1) |
Funds from operations for the three months ended March 31, 2025 |
857.0 |
1.45 |
Production volumes |
||
Crude oil and liquids |
52.8 |
0.09 |
Natural gas |
(33.6) |
(0.06) |
Commodity prices |
||
Crude oil and liquids |
(161.0) |
(0.28) |
Natural gas |
(119.2) |
(0.20) |
Sales from third-party purchases |
2.0 |
— |
Other income |
(8.6) |
(0.01) |
Realized gain on risk management contracts |
9.9 |
0.02 |
Royalties |
42.1 |
0.07 |
Expenses |
||
Third-party purchases |
(11.8) |
(0.02) |
Operating |
(5.6) |
(0.01) |
Transportation |
11.9 |
0.02 |
G&A |
10.8 |
0.02 |
Interest and financing |
0.8 |
0.01 |
Current income tax |
45.0 |
0.08 |
Realized loss on foreign exchange |
(10.6) |
(0.02) |
Other |
0.2 |
— |
Weighted average shares, diluted |
— |
0.01 |
Funds from operations for the three months ended June 30, 2025 |
682.1 |
1.17 |
(1) Per share amounts are based on weighted average diluted common shares. |
The following table details the change in funds from operations for the second quarter of 2025 relative to the second quarter of 2024.
Funds from Operations Reconciliation |
$ millions |
$/share(1) |
Funds from operations for the three months ended June 30, 2024 |
502.8 |
0.84 |
Production volumes |
||
Crude oil and liquids |
237.6 |
0.39 |
Natural gas |
3.6 |
0.01 |
Commodity prices |
||
Crude oil and liquids |
(172.2) |
(0.28) |
Natural gas |
158.5 |
0.26 |
Sales from third-party purchases |
29.9 |
0.05 |
Other income |
(0.9) |
— |
Realized gain on risk management contracts |
(3.9) |
(0.01) |
Royalties |
5.1 |
0.01 |
Expenses |
||
Third-party purchases |
(33.5) |
(0.06) |
Operating |
(2.5) |
— |
Transportation |
(17.4) |
(0.03) |
G&A |
9.2 |
0.02 |
Interest and financing |
4.7 |
0.01 |
Current income tax |
(27.4) |
(0.05) |
Realized loss on foreign exchange |
(12.7) |
(0.02) |
Other |
1.2 |
— |
Weighted average shares, diluted |
— |
0.03 |
Funds from operations for the three months ended June 30, 2025 |
682.1 |
1.17 |
(1) Per share amounts are based on weighted average diluted common shares. |
Shareholder Returns
Operating, Transportation, and General and Administrative Expense
Operating Expense
Transportation Expense
General and Administrative Expense
Cash Flow Used in Investing Activities and Capital Expenditures
The following table details ARC's first six months of 2025 drilling and completions activities by area.
Six months ended June 30, 2025 |
||
Area |
Wells Drilled |
Wells Completed |
Kakwa |
34 |
41 |
Greater Dawson |
6 |
18 |
Attachie |
14 |
19 |
Ante Creek |
— |
5 |
Sunrise |
1 |
6 |
Total |
55 |
89 |
Physical Natural Gas Marketing
Net Debt
Net Income
CONFERENCE CALL
ARC's senior leadership team will be hosting a conference call to discuss the Company's second quarter 2025 results on Friday, August 1, 2025, at 8:00 a.m. Mountain Time ("MT").
Date |
Friday, August 1, 2025 |
Time |
8:00 a.m. MT |
Dial-in Numbers |
|
Calgary |
403-910-0389 |
Toronto |
437-900-0527 |
Toll-free |
1-888-510-2154 |
Conference ID |
99652 |
Webcast URL |
https://app.webinar.net/rDavVMBxQlj |
Callers are encouraged to dial in 15 minutes before the start time to register for the event. A replay will be available on ARC's website at www.arcresources.com following the conference call.
(1) This is a specified financial measure. See "Non-GAAP and Other Financial Measures" of this news release and in the Q1 2025 MD&A for additional disclosure, which is incorporated by reference. |
NON-GAAP AND OTHER FINANCIAL MEASURES
Throughout this news release and in other materials disclosed by the Company, ARC employs certain measures to analyze its financial performance, financial position, and cash flow. These non-GAAP and other financial measures are not standardized financial measures under IFRS Accounting Standards and may not be comparable to similar financial measures disclosed by other issuers. The non-GAAP and other financial measures should not be considered to be more meaningful than generally accepted accounting principles ("GAAP") measures which are determined in accordance with IFRS Accounting Standards, such as net income, cash flow from operating activities, and cash flow used in investing activities, as indicators of ARC's performance.
Non-GAAP Financial Measures
Capital Expenditures
ARC uses capital expenditures to monitor its capital investments relative to those budgeted by the Company on an annual basis. ARC's capital budget excludes acquisition or disposition activities as well as the accounting impact of any accrual changes and payments under certain lease arrangements. The most directly comparable GAAP measure to capital expenditures is cash flow used in investing activities. The following table details the composition of capital expenditures and its reconciliation to cash flow used in investing activities.
Capital Expenditures ($ millions) |
Three Months Ended |
Six Months Ended |
|||
March 31, 2025 |
June 30, 2025 |
June 30, 2024 |
June 30, 2025 |
June 30, 2024 |
|
Cash flow used in investing activities |
429.3 |
471.2 |
643.4 |
900.5 |
1,143.2 |
Acquisition of crude oil and natural gas assets |
(4.0) |
(0.8) |
(5.0) |
(4.8) |
(5.1) |
Disposal of crude oil and natural gas assets |
— |
4.0 |
— |
4.0 |
— |
Long-term investments |
(0.3) |
(0.9) |
(1.3) |
(1.2) |
(4.1) |
Change in non-cash investing working capital |
23.6 |
14.7 |
(109.6) |
38.3 |
(106.6) |
Non-cash capitalized right-of-use asset depreciation |
8.5 |
8.1 |
4.8 |
16.6 |
9.5 |
Capital expenditures |
457.1 |
496.3 |
532.3 |
953.4 |
1,036.9 |
Free Funds Flow
ARC uses free funds flow as an indicator of the efficiency and liquidity of ARC's business, measuring its funds after capital investment available to manage debt levels, pay dividends, and return capital to shareholders through share repurchases. ARC computes free funds flow as funds from operations generated during the period less capital expenditures. Capital expenditures is a non-GAAP financial measure. By removing the impact of current period capital expenditures from funds from operations, Management monitors its free funds flow to inform its capital allocation decisions. The most directly comparable GAAP measure to free funds flow is cash flow from operating activities. The following table details the calculation of free funds flow and its reconciliation to cash flow from operating activities.
Free Funds Flow ($ millions) |
Three Months Ended |
Six Months Ended |
|||
March 31, 2025 |
June 30, 2025 |
June 30, 2024 |
June 30, 2025 |
June 30, 2024 |
|
Cash flow from operating activities |
1,013.0 |
699.1 |
543.0 |
1,712.1 |
1,179.3 |
Net change in other liabilities |
47.4 |
7.7 |
(1.5) |
55.1 |
5.2 |
Change in non-cash operating working capital |
(203.4) |
(24.7) |
(38.7) |
(228.1) |
(74.8) |
Funds from operations |
857.0 |
682.1 |
502.8 |
1,539.1 |
1,109.7 |
Capital expenditures(1) |
(457.1) |
(496.3) |
(532.3) |
(953.4) |
(1,036.9) |
Free funds flow |
399.9 |
185.8 |
(29.5) |
585.7 |
72.8 |
(1) |
Certain additional disclosures for these specified financial measures have been incorporated by reference. See "Cash Flow used in Investing Activities, Capital Expenditures, Acquisitions and Dispositions" in the Q2 2025 MD&A. |
Non-GAAP Ratios
Free Funds Flow per Share
ARC presents free funds flow per share by dividing free funds flow by the Company's diluted or basic weighted average common shares outstanding. Free funds flow is a non-GAAP financial measure. Management believes that free funds flow per share provides investors an indicator of funds generated from the business that could be allocated to each shareholder's equity position.
Return on Average Capital Employed
ARC calculates ROACE, expressed as a percentage, as adjusted EBIT divided by the average capital employed. The components adjusted EBIT and average capital employed are non-GAAP financial measures. ARC uses ROACE as a measure of long-term financial performance, to measure how effectively Management utilizes the capital it has been provided and to demonstrate to shareholders the returns generated over the long term. See "Non-GAAP and Other Financial Measures" in the Q2 2025 MD&A for information on additional disclosures, which information is incorporated by reference into this news release.
Capital Management Measures
Funds from operations, net debt, and net debt to funds from operations are capital management measures. See Note 8 "Capital Management" in the financial statements and "Non-GAAP and Other Financial Measures" in the Q2 2025 MD&A for information additional disclosures, which information is incorporated by reference into this news release.
FORWARD-LOOKING INFORMATION AND STATEMENTS
This news release contains certain forward-looking statements and forward-looking information (collectively referred to as "forward-looking information") within the meaning of applicable securities legislation about current expectations regarding the future based on certain assumptions made by ARC. Although ARC believes that the expectations represented by such forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. Forward-looking information in this news release is identified by words such as "anticipate", "believe", "ongoing", "may", "expect", "estimate", "plan", "will", "project", "continue", "target", "strategy", "upholding", or similar expressions, and includes suggestions of future outcomes. In particular, but without limiting the foregoing, this news release contains forward-looking information with respect to: ARC's intentions to return essentially all free funds flow to shareholders through the base dividend and share repurchases; ARC's 2025 capital budget and guidance including, among others, planned capital expenditures, anticipated free funds flow, anticipated average annual production and the components thereof, anticipated operating expenses, transportation expenses, G&A expenses before share-based compensation expense, G&A expenses, interest and financing expenses and current income tax as a per cent of funds from operations; expectations regarding base dividends and share repurchases; expectations with respect to investment in Attachie Phase II, including the timing of an investment decision and the anticipated capital expenditures related thereto and the benefits therefrom; ARC's commitment to executing on its strategy to grow free funds flow per share through Montney investments; ARC's focus on operational execution at Attachie Phase I, and optimizing the Kakwa Assets and capital efficiencies across its remaining assets and the results therefrom; ARC's long-term plan through 2028 and the expected results therefrom; that ARC will remain committed to safety, capital discipline and financial strength; the anticipated increases to ARC's Attachie position upon development in connection with the agreement with TDZE; anticipated production in the second half of 2025 and the components thereof; ARC's continued evaluation and optimization of well design to maximize capital efficiencies; ARC's intention regarding investments towards site clearance and long-lead items and the expected timing with respect to formalizing such investment decision; anticipated Kakwa production during the second half of the year; plans to further implement the use of dual frac spreads and the benefits thereof; expectations regarding production curtailment at Sunrise and the timing of restoration; anticipated production and capital expenditures related to the acquired Kakwa Assets; the updated full-year production forecast and production forecast for the second half of 2025 at Attachie; expectations in respect of operating expenses per boe; estimated production for the full-year, and the second half of 2025 and the components thereof; ARC's intentions to renew its NCIB and the timing thereof; expectations regarding increased operating costs and the reasons therefor; expectations regarding decreased transportation expense per boe; net debt targets; and other statements. There can be no assurance that the plans, intentions, or expectations upon which these forward-looking statements are based will occur.
Readers are cautioned not to place undue reliance on forward-looking information as ARC's actual results may differ materially from those expressed or implied. ARC undertakes no obligation to update or revise any forward-looking information except as required by law. Developing forward-looking information involves reliance on a number of assumptions and consideration of certain risks and uncertainties, some of which are specific to ARC and others that apply to the industry generally. The material assumptions on which the forward-looking information in this news release are based, and the material risks and uncertainties underlying such forward-looking information, include: ARC's ability to successfully integrate the Kakwa Assets on a timely basis; assumptions with respect to natural gas curtailments at Sunrise; volatility of commodity prices; adverse economic conditions; political uncertainty; lack of capacity in, and/or regulatory constraints and uncertainty regarding, gathering and processing facilities, pipeline systems, and railway lines; indigenous land and rights claims; compliance with environmental regulations; risks relating to climate change, including transition and physical risks; ARC's ability to recruit and retain a skilled workforce and key personnel; development and production risks; project risks; risks relating to failure to obtain regulatory approvals; reputational risks; risks relating to a changing investor sentiment; asset concentration; risks relating to information technology systems and cyber security; risks related to hydraulic fracturing; liquidity; inflation, cost management and interest rates; third-party credit risks; variations in foreign exchange rates; risks relating to royalty regimes; the impact of competitors; lack of adequate insurance coverage; inaccurate estimation of ARC's reserve volumes; limited, unfavorable or a lack of access to capital markets; market access constraints or transportation interruptions, unanticipated operating results or production declines; increased debt levels or debt service requirements; increased costs; potential regulatory and industry changes stemming from the results of court actions affecting regions in which ARC holds assets; ARC's ability to successfully integrate and realize the anticipated benefits of completed or future acquisitions and divestitures; access to sufficient capital to pursue any development plans; the risk that (i) the tariffs that are currently in effect on goods exported from or imported into Canada continue in effect for an extended period of time, the tariffs that have been threatened are implemented, that tariffs that are currently suspended are reactivated, the rate or scope of tariffs are increased, or new tariffs are imposed, including on oil and natural gas, (ii) the U.S. and/or Canada imposes any other form of tax, restriction or prohibition on the import or export of products from one country to the other, including on oil and natural gas, and (iii) the tariffs imposed or threatened to be imposed by the U.S. on other countries and retaliatory tariffs imposed or threatened to be imposed by other countries on the U.S., will trigger a broader global trade war which could have a material adverse effect on the Canadian, U.S. and global economies, and by extension the Canadian oil and natural gas industry and the Company, including by decreasing demand for (and the price of) oil and natural gas, disrupting supply chains, increasing costs, causing volatility in global financial markets, and limiting access to financing; forecast commodity prices and other pricing assumptions with respect to ARC's 2025 capital expenditure budget; assumptions with respect to ARC's revised 2025 guidance; ARC's ability to repurchase its securities under the NCIB and its ability to renew its NCIB; that the previously announced LNG agreements will commence on the timelines anticipated; that counterparties to ARC's various agreements will comply with their contractual obligations; expectations and projections made in light of ARC's historical experience; data contained in key modeling statistics; assumptions with respect to global economic conditions and the accuracy of ARC's market outlook expectations for 2025; suspension of or changes to guidance, and the associated impact to production; forecast production volumes based on business and market conditions; the accuracy of outlooks and projections contained herein; that future business, regulatory, and industry conditions will be within the parameters expected by ARC, including with respect to prices, margins, demand, supply, product availability, supplier agreements, availability, and cost of labour and interest, exchange, and effective tax rates; projected capital investment levels, the flexibility of capital spending plans, and associated sources of funding; the ability of ARC to complete capital programs and the flexibility of ARC's capital structure; opportunity for ARC to pay dividends and the approval and declaration of such dividends by ARC's board of directors; the existence of alternative uses for ARC's cash resources which may be superior to payment of dividends or effecting repurchases of outstanding common shares; cash flows, cash balances on hand, and access to ARC's credit facility and other long-term debt being sufficient to fund capital investments; the ability of ARC's existing pipeline commitments and financial risk management transactions to partially mitigate a portion of ARC's risks against wider price differentials; business interruption, property and casualty losses, or unexpected technical difficulties; estimates of quantities of crude oil, natural gas, and liquids from properties and other sources not currently classified as proved; future use and development of technology and associated expected future results; the successful and timely implementation of capital projects or stages thereof; the ability to generate sufficient cash flow to meet current and future obligations; estimated abandonment and reclamation costs, including associated levies and regulations applicable thereto; the retention of key assets; the continuance of existing tax, royalty, and regulatory regimes; estimates with respect to commodity pricing; and other assumptions, risks, and uncertainties described from time to time in the filings made by ARC with securities regulatory authorities, including those risks contained under the heading "Risk Factors" in ARC's management's discussion and analysis for the year ended December 31, 2024.
ARC's future shareholder distributions, including but not limited to the payment of dividends, if any, and the level thereof is uncertain. Any decision to pay dividends on ARC's shares (including the actual amount, the declaration date, the record date and the payment date in connection therewith and any special dividends) will be subject to the discretion of ARC's board of directors and may depend on a variety of factors, including, without limitation, ARC's business performance, financial condition, financial requirements, growth plans, expected capital requirements and other conditions existing at such future time including, without limitation, contractual restrictions and satisfaction of the solvency tests imposed on ARC under applicable corporate law. Further, the actual amount, the declaration date, the record date and the payment date of any dividend are subject to the discretion of ARC's board of directors. There can be no assurance that ARC will pay dividends in the future.
The forward-looking information in this news release also includes financial outlooks and other related forward-looking information (including production and financial-related metrics) relating to ARC, including, but not limited to: production, capital expenditures, operating expenses, transportation expenses, G&A expenses before share-based compensation expense, G&A expenses – share based compensation expense, interest and financing expenses, and current income tax as a per cent of funds from operations. The internal projections, expectations, or beliefs are based on the 2025 capital budget, which is subject to change in light of ongoing results, prevailing economic conditions, commodity prices, and industry conditions and regulations. These financial outlook and other related forward-looking statements are also subject to the same assumptions, risk factors, limitations, and qualifications as set forth above. Any financial outlook and forward-looking information implied by such forward-looking statements are described in the Q2 2025 MD&A, and ARC's most recent annual information form, which are available on ARC's website at www.arcresources.com and under ARC's SEDAR+ profile at www.sedarplus.ca and are incorporated by reference herein.
The forward-looking information contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking information included in this news release are made as of the date of this news release and, except as required by applicable securities laws, ARC undertakes no obligation to publicly update such forward-looking information to reflect new information, subsequent events or otherwise.
About ARC
ARC Resources Ltd. is a pure-play Montney producer and one of Canada's largest dividend-paying energy companies, featuring low-cost operations. ARC's investment-grade credit profile is supported by commodity and geographic diversity and robust risk management practices around all aspects of the business. ARC's common shares trade on the Toronto Stock Exchange under the symbol ARX.
ARC RESOURCES LTD.
Please visit ARC's website at www.arcresources.com or contact Investor Relations:
E-mail: [email protected]
Telephone: (403) 503-8600
Fax: (403) 509-6427
Toll Free: 1-888-272-4900
ARC Resources Ltd.
Suite 1500, 308 - 4 Avenue SW
Calgary, AB T2P 0H7
ARC Resources Ltd.
1500, 308 4 Ave SW
Calgary, Alberta T2P 0H7
Local
Toll-free
Fax
403-503-8600
1-888-272-4900
403-509-6427
24-Hour Emergency Line
403-292-0434
ARC Resources Ltd.
1200, 308 4 Ave SW
Calgary, Alberta T2P 0H7
Local
Toll-free
Fax
24-Hour Emergency Line
403 503 8600
888 272 4900
403 509 6427
403 292 0434
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