CALGARY,
AB, Sept. 4, 2024 /CNW/ -
(ARX: TSX) ARC Resources Ltd. ("ARC" or the "Company")
today provided an operations update alongside a non-core asset
disposition and the renewal of its normal course issuer bid
("NCIB").
- Non-Core Asset Disposition – ARC recently closed the
disposition of certain non-core, non-Montney assets for total cash proceeds of
$80 million. The proceeds will be
allocated to share repurchases as ARC's view of its intrinsic value
exceeds the current share price.
- Attachie Update – Phase I of Attachie remains on track, with initial
commissioning volumes anticipated in the fourth quarter of 2024.
Plant construction is greater than 90 per cent complete and
drilling and completion operations are progressing on schedule. ARC
has drilled 37 of the initial 40 start-up wells, while 28 wells
have been fracture stimulated.
- Sunrise Update – Natural gas production at Sunrise
remains curtailed by approximately 250 MMcf per day (approximately
42,000 boe per day) due to persistently low natural gas prices. As
a result, ARC expects third quarter production to average between
315,000 boe per day and 330,000 boe per day, with a higher
percentage of liquids relative to the first six months of 2024
reflecting curtailed natural gas volumes and growth from its
condensate-rich assets.
- Natural gas production curtailments and strong well
productivity is expected to result in lower capital spending than
originally planned at Sunrise in 2025, leading to higher free funds
flow as natural gas prices recover.
- NCIB Renewal – ARC received approval from the Toronto
Stock Exchange ("TSX") to commence an NCIB. The NCIB allows ARC to
purchase up to 59,404,376 of its outstanding common shares ("Common
Shares"), representing 10 per cent of its public float, over a
12-month period commencing September 6,
2024.
- Under the NCIB, Common Shares may be purchased by ARC in open
market transactions on the TSX and other alternative trading
platforms in Canada and in
accordance with the TSX rules for NCIBs. The NCIB will commence on
September 6, 2024 and expire no later
than September 5, 2025. Subject to
exceptions for block purchases, ARC will limit daily purchases of
Common Shares on the TSX to no more than 482,732 Common Shares or
25 per cent of the average daily trading volume of the Common
Shares on the TSX of 1,930,931 Common Shares during any trading
day. ARC previously purchased an aggregate of 13,862,100 Common
Shares at a weighted average price of $22.05 under a normal course issuer bid between
the periods of September 1, 2023 and
August 30, 2024.
- The NCIB complements ARC's sustainable and growing dividend in
the Company's strategy to return capital to shareholders. ARC
believes when dislocations exist between the share price of its
shares and the intrinsic value of the business, an NCIB can
increase shareholder value and per share growth.
- ARC plans to continue to return essentially all free funds flow
to shareholders. Based on the forward curve(1), ARC
estimates free funds flow in 2025 to approximate between
$1.3 billion and $1.5 billion.
- The Company has, in connection with the NCIB, entered into an
automatic share purchase plan with a broker to enable ARC to
provide standard instructions and purchase Common Shares on the
open market during self-imposed blackout periods. Outside of these
blackout periods, Common Shares may be purchased under the NCIB in
accordance with Management's discretion.
- As of the close of business on August
26, 2024, the Company had 596,221,125 Common Shares issued
and outstanding and 594,043,760 Common Shares issued and
outstanding in its public float. All Common Shares acquired under
the NCIB will be cancelled.
(1) Based on the forward curve as of August 28, 2024 ( WTI US$70 per barrel; US$3.25/MMbtu NYMEX; C$2.65Mcf AECO).
-
- A copy of the Form 12 Notice of Intention to Make a Normal
Course Issuer Bid filed by ARC with the TSX can be obtained from
the Company upon request without charge. This news release does not
constitute an offer to sell securities, nor is it a solicitation of
an offer to buy securities, in any jurisdiction.
Advisory on Forward-looking Information
Certain information regarding ARC set forth in this press
release contains forward-looking statements that involve
substantial known and unknown risks and uncertainties. The use of
any of the words "plan", "expect", "intend", "believe", "should",
"anticipate", or other similar words, or statements that certain
events or conditions "may" or "will" occur are intended to identify
forward-looking statements. These statements are only predictions
and actual events or results may differ materially. Many factors
could cause ARC's actual results to differ materially from those
expressed or implied in any forward-looking statements made by, or
on behalf of, ARC. In particular, forward-looking statements
contained in this press release include, but are not limited to,
statements with respect to the anticipated benefits of the NCIB.
These forward-looking statements are subject to numerous risks and
uncertainties, including but not limited to, the allocation of
proceeds from the non-core asset disposition, the anticipated
timing of commissioning volumes for Phase 1 of Attachie, ARC's expectations regarding third
quarter production at Sunrise and the risk that the anticipated
benefits of the NCIB may not be achieved. Readers are cautioned
that the foregoing list of factors is not exhaustive. Although the
forward-looking statements contained in this press release are
based upon assumptions which Management believes to be reasonable,
the Company cannot assure investors that actual results will be
consistent with these forward-looking statements. With respect to
forward-looking statements contained in this press release, ARC has
made assumptions regarding, among other things, the ability of the
Company to achieve the benefits of the NCIB. These forward-looking
statements are made as of the date of this press release and ARC
disclaims any intent or obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or results, or otherwise, other than as required by
applicable securities laws.
The future acquisition of common shares pursuant to a share
buyback (including through ARC's NCIB), if any, and the level
thereof is uncertain. Any decision to acquire common shares
pursuant to a share buyback will be subject to the discretion of
the 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. There can be no assurance of the number of common
shares that ARC will acquire pursuant to a share buyback, if any,
in the future.
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: IR@arcresources.com
Telephone: (403) 503-8600
Fax: (403) 509-6427
Toll Free: 1-888-272-4900
ARC Resources Ltd.
Suite 1200, 308 - 4 Avenue SW
Calgary, AB T2P 0H7
SOURCE ARC Resources Ltd.
