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Released February 15, 2022 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--ARC Resources Limited (TSX:ARX) (Calgary, Alberta) boasted record full-year production of oil and natural gas in 2021, as significantly stronger commodity prices and a major reduction in expenses led to a dramatic turnaround from 2020's net losses. Executives say the company is focused on developing its existing assets--particularly its Attachie and Sunrise developments in the Montney Shale--in 2022. Industrial Info is tracking more than US$5.8 billion worth of active projects from ARC, including multiple projects related to Attachie and Sunrise.
ARC lowered its 2022 capital expenditure (capex) guidance by C$50 million (US$39.29 million) to between C$1.15 billion to C$1.25 billion (US$903.6 million to US$982.3 million). This reduction reflects the company's acceleration of its Attachie West Phase I project near Fort Saint John, British Columbia, a new natural gas-processing plant with an inlet capacity of 90 million standard cubic feet per day of natural gas and a natural gas liquids (NGL) production capacity of 25,000 barrels per day (BBL/d). The earlier-than-expected portion of capex was related to ARC's securing of long-lead items. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database can read more in a detailed project report.
Click on the image at right for a graph detailing ARC Resources' active projects, by project type.
The company's 2022 drilling program for Attachie West involves drilling 10 new wells and conducting extensive seismic studies; if the investment goes forward as planned, ARC will look into proposed natural gas and NGL pipelines, each of which would run 25 miles and connect with the local pipeline grid. The gas pipeline would have an initial capacity of 90 million standard cubic feet per day, which could be expanded to 180 million standard cubic feet per day, while the NGL pipeline would have an initial capacity of 25,000 BBL/d, which could be expanded to 50,000 BBL/d or more. Subscribers can learn more from Industrial Info's project reports on the drilling program, natural gas pipeline and NGL pipeline.
ARC already is seeking permits for a proposed Phase II for Attachie West, which is designed to double the facility's production to 180 million standard cubic feet per day of natural gas and 30,000 BBL/d of NGL. Subscribers can learn more from Industrial Info's project report.
ARC reported C$1.06 billion (US$833 million) in capital expenditures for 2021, delivering a record average production of 302,003 barrels of oil equivalent per day, about 63% of which was natural gas. The remainder was crude oil and liquids.
Other major developments in 2021 include ARC's agreement with an unnamed participant in the LNG Canada project in Kitimat, British Columbia, which is led by Shell plc (NYSE:SHEL) (The Hague, Netherlands). The long-term gas supply agreement would deliver about 150 million cubic feet per day of natural gas from ARC's Sunrise facility in the Montney Shale, upon the startup of LNG Canada. ARC plans to increase its productive capacity at Sunrise in 2022 through a field expansion, while seeking permits for a third production train at the facility, which would add 90 million standard cubic feet per day of capacity, bringing the site's total capacity to 330 million standard cubic feet per day. Subscribers can learn more from Industrial Info's project reports on the field expansion and proposed third train.
"We leveraged our scale to secure a transaction with an LNG Canada participant, to supply gas for the project, an example of our market diversification strategy and an important first step into liquefied natural gas (LNG) supply," said Terry Anderson, the chief executive officer of ARC, in a quarterly earnings-related conference call. "This project is very material for Western Canada gas fundamentals, adding 2 billion cubic feet per day of demand at startup."
Executives said ARC does not plan to accelerate capital investments in growth projects for 2022 beyond what is planned at Sunrise and Attachie. However, the company continues to evaluate a possible fourth production train at the Sunrise facility, which is designed for a further 90 million standard cubic feet per day. Subscribers can learn more from Industrial Info's project report.
"Our near-term priorities are to safely and efficiently sustain production at our base assets, and invest in our highest-return projects like Sunrise and Attachie, once the regulatory environment in British Columbia supports it," Anderson said in the conference call.
ARC reported net income of C$787 million (US$618.58 million) for full-year 2021, compared to a net loss of C$547 million (US$429.89 million) in 2020; for the fourth quarter, the company reported net income of C$678 million (US$532.84 million), compared with C$121 million (US$95.1 million) in fourth-quarter 2020.
The fiscal gains can be attributed partly to much stronger commodity prices. During 2021, ARC's realized natural gas price averaged C$4.82 (US$3.79) per million cubic foot, which was more than double 2020's C$2.26 (US$1.78). Average oil and condensate prices reached C$75.08 (US$59.02) per barrel, compared with C$42.62 (US$33.50) in 2020, while NGL prices averaged C$26.16 (US$20.56), compared with $12.69 (US$9.97) in the previous year.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
ARC lowered its 2022 capital expenditure (capex) guidance by C$50 million (US$39.29 million) to between C$1.15 billion to C$1.25 billion (US$903.6 million to US$982.3 million). This reduction reflects the company's acceleration of its Attachie West Phase I project near Fort Saint John, British Columbia, a new natural gas-processing plant with an inlet capacity of 90 million standard cubic feet per day of natural gas and a natural gas liquids (NGL) production capacity of 25,000 barrels per day (BBL/d). The earlier-than-expected portion of capex was related to ARC's securing of long-lead items. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database can read more in a detailed project report.
Click on the image at right for a graph detailing ARC Resources' active projects, by project type.The company's 2022 drilling program for Attachie West involves drilling 10 new wells and conducting extensive seismic studies; if the investment goes forward as planned, ARC will look into proposed natural gas and NGL pipelines, each of which would run 25 miles and connect with the local pipeline grid. The gas pipeline would have an initial capacity of 90 million standard cubic feet per day, which could be expanded to 180 million standard cubic feet per day, while the NGL pipeline would have an initial capacity of 25,000 BBL/d, which could be expanded to 50,000 BBL/d or more. Subscribers can learn more from Industrial Info's project reports on the drilling program, natural gas pipeline and NGL pipeline.
ARC already is seeking permits for a proposed Phase II for Attachie West, which is designed to double the facility's production to 180 million standard cubic feet per day of natural gas and 30,000 BBL/d of NGL. Subscribers can learn more from Industrial Info's project report.
ARC reported C$1.06 billion (US$833 million) in capital expenditures for 2021, delivering a record average production of 302,003 barrels of oil equivalent per day, about 63% of which was natural gas. The remainder was crude oil and liquids.
Other major developments in 2021 include ARC's agreement with an unnamed participant in the LNG Canada project in Kitimat, British Columbia, which is led by Shell plc (NYSE:SHEL) (The Hague, Netherlands). The long-term gas supply agreement would deliver about 150 million cubic feet per day of natural gas from ARC's Sunrise facility in the Montney Shale, upon the startup of LNG Canada. ARC plans to increase its productive capacity at Sunrise in 2022 through a field expansion, while seeking permits for a third production train at the facility, which would add 90 million standard cubic feet per day of capacity, bringing the site's total capacity to 330 million standard cubic feet per day. Subscribers can learn more from Industrial Info's project reports on the field expansion and proposed third train.
"We leveraged our scale to secure a transaction with an LNG Canada participant, to supply gas for the project, an example of our market diversification strategy and an important first step into liquefied natural gas (LNG) supply," said Terry Anderson, the chief executive officer of ARC, in a quarterly earnings-related conference call. "This project is very material for Western Canada gas fundamentals, adding 2 billion cubic feet per day of demand at startup."
Executives said ARC does not plan to accelerate capital investments in growth projects for 2022 beyond what is planned at Sunrise and Attachie. However, the company continues to evaluate a possible fourth production train at the Sunrise facility, which is designed for a further 90 million standard cubic feet per day. Subscribers can learn more from Industrial Info's project report.
"Our near-term priorities are to safely and efficiently sustain production at our base assets, and invest in our highest-return projects like Sunrise and Attachie, once the regulatory environment in British Columbia supports it," Anderson said in the conference call.
ARC reported net income of C$787 million (US$618.58 million) for full-year 2021, compared to a net loss of C$547 million (US$429.89 million) in 2020; for the fourth quarter, the company reported net income of C$678 million (US$532.84 million), compared with C$121 million (US$95.1 million) in fourth-quarter 2020.
The fiscal gains can be attributed partly to much stronger commodity prices. During 2021, ARC's realized natural gas price averaged C$4.82 (US$3.79) per million cubic foot, which was more than double 2020's C$2.26 (US$1.78). Average oil and condensate prices reached C$75.08 (US$59.02) per barrel, compared with C$42.62 (US$33.50) in 2020, while NGL prices averaged C$26.16 (US$20.56), compared with $12.69 (US$9.97) in the previous year.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
