Look Ahead

2014 Capital Program

In 2014, ARC plans to execute a $915 million capital program; the largest in its history. Plans include the drilling of 196 gross operated wells, with 88 per cent focused on oil and liquids-rich wells. The program will target significant production growth with annual average production expected to be in the range of 110,000 and 114,000 boe per day. 

Investment will be focused on high value oil and liquids-rich natural gas assets; and continued development of ARC’s low cost Montney natural gas assets. With an outstanding portfolio of opportunities, ARC directs spending to projects with the highest rates of return across its portfolio, while mindfully managing production declines through paced development. The 2014 capital program will focus on the following four areas:

  • High Rate of Return Oil and Liquids Opportunities: ARC will direct approximately 77 per cent of the 2014 capital program towards oil and liquids-rich gas opportunities. ARC expects total liquids production to grow by approximately 14 per cent in 2014. The focus on oil and liquids production will maximize value by capitalizing on relatively strong crude oil and liquids prices.
  • Optimize Commerciality: The 2014 capital program will capitalize on the scale of our operations by continuing to implement multi-well pad development and leverage surface infrastructure across our asset base. Where appropriate, a commercialized approach to asset development results in operational efficiencies and realized cost savings.   
  • Counter-Cyclical Natural Gas Investment: ARC’s large resource in the Montney provides an extensive inventory of opportunities for continued low cost natural gas development in the region.  Areas such as Sunrise and Dawson, in particular, deliver excellent economics even in today’s low natural gas price environment. During 2014, ARC will continue to develop this resource base counter cyclically with approximately 20 per cent of the total 2014 capital program being invested at Dawson and Sunrise where ARC has a significant resource base. 
  • Pilot New Opportunities: Included in the budget is investment in key pilot projects that will set the stage for future value creation. In 2014, ARC will pilot production at its Attachie and Septimus properties to assess the viability of future commercialization in these areas. 

  • With an outstanding portfolio of opportunities, ARC directs spending to projects with the highest rates of return across its portfolio, while mindfully managing production declines through paced development.

2014 Guidance

ARC is targeting average annual production of 110,000 to 114,000 boe per day and an exit volume of approximately 100,000 boe per day. Targets are based on existing assets and current opportunities.

 

2014 Guidance (3)

2013 Guidance

2013  Actual

Production (boe/d)

110,000 – 114,000

94,000 - 97,000

96,087

Expenses ($/boe):

 

 

 

Operating

9.20 - 9.60

9.50 - 9.70

9.66

Transportation

1.70 - 1.80

1.40 - 1.50

1.72

General and administrative (1)

2.20 - 2.40

2.50 - 2.70

2.77

Interest

1.10 - 1.20

1.20 - 1.30

1.21

Income taxes ($ millions)

60 - 70

25 - 35

16.3

Capital expenditures ($ millions) (2)

915

860

859.9

Net property and undeveloped land acquisitions ($ millions)

-

-

(39.1)

Weighted average shares outstanding (millions)

317

311

312

  1. The 2013 guidance for general and administrative expense per boe was based on a range of $1.75 - $1.90 prior to the recognition of any expense associated with ARC’s long-term incentive plans and $0.75 - $0.80 per boe associated with ARC’s long-term incentive plans.  Actual per boe costs for each of these components for December 31, 2013 were $1.67 per boe and $1.10 per boe, respectively. 
  2. Excludes amounts related to unbudgeted land purchases and net dispositions of small producing properties which totaled $39.1 million in 2013. 
  3. 2014 production guidance does not take into account the impact of any dispositions that may occur during the year.


Production Forecast