ARC Resources Ltd T.ARX

Alternate Symbol(s): AETUF

Energy Oil & Gas E&P

ARC Resources Ltd. is a Canadian energy company. It is focused on the exploration, development, and production of unconventional natural gas, condensate, natural gas liquids (NGLs), and crude oil in western Canada. Its operations are focused in the Montney region in Alberta and northeast British Columbia. Its operations in Alberta are located near Grande Prairie and the region includes Kakwa and Ante Creek. Kakwa is a condensate-rich and high-deliverability natural gas play with top-tier development opportunities. Its operations in northeast British Columbia are located near Dawson Creek and the region includes Greater Dawson, Sunrise, Attachie, and Septimus and Sundown. The Greater Dawson operating area includes Dawson Phases I, II, III and IV and Parkland. The Attachie is a condensate-rich, natural gas play primed for large-scale development. Sunrise is a dry natural gas play with a low-cost structure, well deliverability and direct connectivity to liquefied natural gas Canada.

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ARC Resources Ltd

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Post by retiredcfon May 10, 2024 7:30am

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Post# 36032997

RBC

May 9, 2024

ARC Resources Ltd. Q1/24 - Making it Look Easy

TSX: ARX | CAD 25.85 | Outperform | Price Target CAD 28.00

Sentiment: Positive

ARX reported quarterly results which slightly exceeded Street expectations on both production volumes and cash flow, with the company’s FY24/25 guidance outlook remaining intact. The Attachie project is progressing on schedule and budget, with $102 million in FCF during the quarter (despite $180 million in Attachie investment) which was directed toward buybacks and dividends. ARX remains one of our top picks and continues to be featured on the RBC Global Energy Best Ideas List.

Conference Call.

10:00 pm ET (8:00am MT) on Friday, May 10, 2024 | Dial-in: 1-888-664-6392; Conference ID: 68724534
ARX's results featured production volumes of 352,328 boe/d (RBCe 349,979 boe/d; Street 345,100 boe/d). Capex was roughly in line with expectations, coming at $505mm (RBCe $525mm; Street $550mm).

The company generated $607 million of cash flow ($1.01 per share (f.d) vs. RBCe/Street: $1.01/$0.98) in the quarter in tandem with $102 million in FCF.

ARX distributed $117mm via dividends ($102mm) and share buybacks (0.6mm shares for $15mm) during the quarter.

ARX reiterated its 2024 capital budget of $1.8 billion (mid-point) driving FY24 volumes of 355 mboe/d (mid-point). The company also reiterated its 2025 production guidance of 388 mboe/d (mid-point) on capital of $1.7bn. Cumulative capex in 24/25 equates to roughly 67% of projected AFFO on our RBC deck with the remaining earmarked for shareholder returns. Q2/24 guidance is pegged towards 327 mboe/d (midpoint) due to planned third-party turnarounds and downtime.

Operations remain in good shape with the Attachie project progressing as planned and commissioning volumes expected in late 2024 with full ramp up to full capacity (40,000 boe/d) in early 2025. To date, the company has drilled 22/40 wells required to fill the 40 mboe/d plant capacity with the first pad completed in Q1. Plant construction is approximately 60% complete and progressing on schedule. ARX drilled 38 wells and completed 24 wells during the quarter.