stockwatch article...ARC Resources earns $53.6M in Q3, incre
ARC Resources earns $53.6M in Q3, increases dividend
2021-11-04 17:19 ET - News Release
An anonymous director reports
ARC RESOURCES LTD. REPORTS RECORD THIRD QUARTER 2021 RESULTS, INCREASES DIVIDEND, AND ANNOUNCES 2022 BUDGET
ARC Resources Ltd. has released its third quarter 2021 financial and operational results and has set out its 2022 budget.
HIGHLIGHTS
Q3 2021 Results: ARC delivered record quarterly production and free funds flow(1) per share, exceeding consensus expectations(2). Average production of 353,657 boe(3)(4) per day generated funds from operations(5) of $765 million ($1.06 per share) and free funds flow of $497 million ($0.69 per share).
Free funds flow was used to reduce net debt excluding lease obligations(5) by $158 million and to return $172 million of capital to shareholders through quarterly dividends of $47 million and share repurchases of $125 million.
To date, ARC has repurchased approximately 20 million common shares for total consideration of $210 million, representing 2.7 per cent of common shares outstanding.
2022 Capital Budget: ARC's board of directors (the "Board") has approved a preliminary 2022 capital budget of $1.2 to $1.3 billion that is expected to deliver average production in the range of 335,000 to 350,000 boe per day.
Approximately $1.1 billion is required to sustain production at 335,000 to 350,000 boe per day, with the balance planned for investing in an expansion at Sunrise, long-lead investments for Attachie West Phase I, and progressing several emissions-reduction initiatives.
Free Funds Flow Allocation: ARC plans to return 50 to 80 per cent of free funds flow to shareholders primarily through:
Sustainable dividend growth as the primary long-term mechanism.
Share repurchases when Management's view of the intrinsic value of the business exceeds ARC's share price under moderate commodity price scenarios.
ARC plans to allocate the balance of free funds flow to debt reduction.
Dividend Increase: The Board has approved a 52 per cent increase to ARC's quarterly dividend, from $0.066 per share to $0.10 per share, beginning with its dividend that is expected to be paid on January 17, 2022 to shareholders of record on December 31, 2021.
ARC now expects to exceed the $160 million of synergies originally identified through the business combination (the "Business Combination") with Seven Generations Energy Ltd. ("Seven Generations") due to greater-than-expected capital synergies. The integration is effectively complete and ARC expects to capture all of the identified synergies by year-end.
The dividend increase reflects ARC's conviction in its business, increased profitability, and is sustainable in a low commodity price environment.
Long-term Gas Supply Agreement: ARC has entered into a long-term gas supply agreement to deliver approximately 150 MMcf per day of natural gas from ARC's Sunrise facility to an LNG Canada participant. The agreement will commence with the start-up of LNG Canada.
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 nine months ended September 30, 2021, are available on ARC's website at www.arcresources.com and under ARC's SEDAR profile at www.sedar.com .
Notes: