ARC has released its 2021 capital budget of $375 million to $425 million. The company expects to deliver production of between 158,000 boe/day and 165,000 boe/day, of which approximately 80 per cent is low-cost natural gas production.

• 2021 will be focused on maximizing the generation of surplus funds from operations. ARC forecasts a payout ratio of approximately 70 per cent, after capital expenditures and dividend.
• Approximately 80 per cent of the capital budget will be directed at profitable half-cycle investments to sustain production at ARC’s core Montney properties (Dawson, Sunrise, Parkland/Tower, and Ante Creek).
• ARC will complete two minor infrastructure optimization projects at Sunrise and Parkland for a combined $41 million to add about 46 MMcf/day of additional natural gas processing and sales capacity.
• ESG will continue to be a focal point in 2021, with $7 million being directed at initial investments for electrification at the Dawson Phase III & IV and Attachie West Phase I facilities, as well as a few other small, emissions-reducing projects.
• Operating expense is expected to be in the range of $4.00/boe to $4.50/boe, which is relatively flat compared to 2020. Discretionary maintenance activities that had been deferred in 2020 are expected to be completed in 2021.

Production

During the third quarter of 2020 ARC delivered average daily production of 158,444 boe/day.

• Q3 2020 production decreased five per cent from Q2 2020 due to planned maintenance activities at Parkland/Tower. ARC also managed its natural gas production at Dawson and Sunrise to ensure maximum throughput of low-cost natural gas production during the winter months to capture the anticipated strength in natural gas pricing. To de-risk the economics of this decision, ARC entered into additional hedges for November 2020 through March 2021. New wells brought on-stream at Ante Creek, Attachie West, and Parkland partially offset the production decreases in the period.
• Year-to-date production of 158,911 boe/day is above guidance, so ARC is adjusting its full-year expectations by four per cent. The top end of guidance is now 160,000 boe/day.

KeyFacts Energy: ARC Resources Canada Onshore country profile