TSX:ARX - Post Discussion
Post by
retiredcf on Sep 05, 2024 9:08am
RBC
September 4, 2024
ARC Resources Ltd.
Operations Update: Attachie On Track; Sunrise Volumes Remain Shut-in
TSX: ARX | CAD 23.86 | Outperform | Price Target CAD 28.00
Sentiment: Neutral
ARC provided a short operations update which featured the on-track construction of Attachie, Sunrise volumes remaining shut- in given continued low natural gas prices, and a small non-core disposition. Broadly, we see this update as neutral to ARX shares – we continue to rate ARX Outperform.
• Attachie – On Track. ARX provided an Attachie operations update which noted the plant construction mapping to roughly 90% completion, with 37 of the 40 initial wells now drilled. The project remains on track for year-end 2024, positioned to add roughly 40,000 boe/d of total volume (half liquids).
• Sunrise–Remainingshut-in.Reflectiveoflowgasprices,thecompanyhaselectedtoleave250mmcf/dofnaturalgasproduction at Sunrise shut-in for the full quarter, resulting in Q3 corporate guidance shifting to 315-330,000 boe/d (previously 330-335,000 boe/d). Overall we see this as a prudent move, and one that has limited effect on cash flows given very low current natural gas pricing.
• Non-core asset sale. The company recently completed a small non-core (and non-Montney) asset sale for $80 million, the proceeds of which will be allocated to share buybacks. Additionally, the company refreshed its NCIB which allows for the repurchase of 59 million shares (10% of float) over the next year.
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