Look Ahead

2013 Capital Budget

In 2013, ARC plans to execute a record capital budget, spending $830 million on internal development of oil and liquids-rich gas opportunities. With large scale and time intensive projects planned for 2013, modest growth is expected for the year with resulting significant production growth coming on-stream in early 2014.

  • CapitalBudgetByArea Chart
  • GrossOperatedWellsPlanned Chart

ARC plans to spend $162 million on infrastructure, an investment that will set the stage for long-term resource development in key areas. Moving to commercialized development of ARC's Montney resources, the 2013 program will capitalize on the scale of our operations by implementing pad drilling programs to achieve optimal capital efficiencies.

Financing the Budget

ARC is well positioned with a strong balance sheet, positive working capital and significant available credit capacity to fund the 2013 capital program. In August 2012, ARC proactively issued equity, raising net proceeds of $330 million. We believe the combination of funds from operations, proceeds from the equity raised in August 2012, proceeds from the Dividend Re-investment Program (DRIP) and existing credit capacity will be sufficient to fund the 2013 dividend and the $830 million capital budget without compromising our financial position. As we move forward with the 2013 capital program, we will draw on our $1.2 billion of available credit capacity and expect to end the year at 1.3 times net debt to funds from operations at ARC’s budgeted commodity assumptions, well within our targeted range.

2013 Guidance

ARC is targeting average annual production of 93,000 to 97,000 boe per day and an exit volume of approximately 100,000 boe per day. Targets are based on existing assets and current opportunities.

 

2013 Guidance

2012 Guidance

2012  Actual

 

 

 

 

Production (boe/d)

93,000 – 97,000

91,000 - 94,000

93,546

Expenses ($/boe):

 

 

 

Operating

9.50 – 9.70

9.50 - 9.70

9.40

Transportation

1.40 – 1.50

1.30 - 1.40

1.29

General and administrative (1)(5)

2.50 – 2.70

2.45 - 2.60

2.84

Interest

1.20 – 1.30

1.20 - 1.30

1.32

Income taxes(2)

1.05 – 1.15

0.90 - 1.05

0.87

Capital expenditures ($ millions) (3)

830

600

608

Net property and undeveloped land acquisitions ($ millions) (4)

-

25 – 50

32

Weighted average shares outstanding  (millions)

311

297

297

  1. The 2012 guidance for general and administrative expense per boe was based on a range of $1.75 - $1.85 prior to the recognition of any expense associated with ARC’s long-term incentive plan and $0.70 - $0.75 per boe associated with ARC’s long-term incentive plan.  Actual per boe costs for each of these components for December 31, 2012 were $1.91 per boe and $0.93 per boe, respectively. 
  2. The 2013 corporate tax estimate will vary depending on the level of commodity prices and represents only the current income tax expense.   
  3. Excludes amounts related to unbudgeted net acquisitions of land and small producing properties which totaled approximately $32.4 million in the twelve months of 2012. 
  4. Minor net property acquisitions and undeveloped land are not included in the 2013 capital budget of $830 million.  
  5. The 2013 annual guidance for general and administrative cost per boe is based on a range of $1.75 - $1.90 prior to the recognition of any expense associated with ARC’s long-term incentive plan and $0.75 - $0.80 per boe associated with ARC’s long-term incentive plan.