Ink Research Morning Report: Contrarian Alert: Betting against a flood of natural gas pessimism
September 24, 2025
The shares of Alberta and BC focused natural gas and liquids producer ARC Resources (ARX) are up 56.5% since we featured it here on April 12, 2023. However, the stock is down 13.1% over the past three months. ARC has been hit along with some other natural gas oriented names as Canadian natural gas spot prices sagged in late summer. Demand was impacted by pipeline maintenance and reported repairs at LNG Canada which have slowed the export facility's ramp-up. Meanwhile, according to energynow.ca, Canadian natural gas production may be on track for a record year. These developments have helped push storage levels to the top of their 5-year range in the summer which, on some days, has left surplus natural gas scrambling to look for a home. ARC insiders bought the stock's September pullback, betting that investors are overreacting. According to a recent presentation, about 50% of ARC's natural gas is delivered into the US.
When ARC reported Q2 results on July 31st, average production was 357,228 boe/d (61% natural gas), up 8% from Q2 2024. However, Q2 2025 production was below Q4 2022 production of 359,730 boe/d (61% natural gas), referenced in our April 2023 report. When it reported Q2 results, ARC also revised its guidance. It said, "Production during the second half of 2025 is expected to average greater than 410,000 boe per day, including approximately 120,000 barrels per day of crude oil and condensate. This assumes additional natural gas curtailments at Sunrise of approximately 200 MMcf per day (33,000 boe per day) anticipated through July and August." For the year, ARC now expects to produce 385,000 to 395,000 boe/d (380,000 to 395,000 boe/d previously). The uptick to the bottom end of the range reflects ARC's July 2nd acquisition of condensate-rich
Montney assets in the Kakwa region of Alberta from Strathcona Resources (Sunny; SRC).