Canada’s ARC Resources posts record earnings in 2022

Canada’s ARC Resources, the largest producer in the Montney shale and tight gas fairway, said February 10 it had record earnings, production and funds flows in 2022, headlined by net income of C$2.3bn (US$1.7bn), up from C$786.6mn in 2021.

Net income in the fourth quarter increased to C$867.8mn from C$741mn, while cash flow from operating activities rose to C$1.1bn from C$878.3mn.

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Funds from operations in 2022 increased to C$3.7bn from C$2.4bn, while cash flow from operations rose to C$3.8bn from C$2bn in 2021. Free funds flow was C$2.3bn, a 58% increase over 2021.

About 71% of free funds flow – some C$1.6bn – was distributed to shareholders in 2022, with the balance allocated to reducing ARC’s net debt by C$500mn, to C$1.3bn from C$1.83bn in 2021.

Capital expenditures of C$1.4bn in 2022, up from C$1.1bn in 2021, delivered record annual average production of 345,613 barrels of oil equivalent (boe)/day, up from 302,003 boe/day in 2021. Natural gas production averaged 1.26bn ft³/day, up from 1.15bn ft³/day, making ARC Canada’s third largest natural gas producer.

ARC’s average realised natural gas price increased to C$8.15/’000 ft³ in 2022 from C$4.82/’000 ft³ in 2021, reflecting its market diversification efforts which moved much natural gas marketing activities away from the volatile AECO trading hub in Alberta, which saw an average price of just C$5.56/’000 ft³ in 2021.