ARC Resources is budgeting investment next year to keep its plants full and position itself for further production growth in 2019.
The Montney-focused company has announced a $690 million capital program for 2018. This compares to $830 million in 2017, which was revised upward mid-year from an initial $665-million plan.
Approximately $565 million of the 2018 program will be spent on ARC’s northeast British Columbia Montney assets.
The 2018 budget is “a continuum” of the work the company has being doing in 2017, according to CEO Myron Stadnyk.
This year ARC completed the largest facility construction in its history, the $250 million Dawson Phase 3 natural gas and liquids plant, which has processing capacity of 90 mmcf/d of natural gas and 7,500 bbls/d of liquids. The project was completed ahead of schedule in mid-June.
As a result, ARC’s production increased in the third quarter of 2017 to 129,526 boe/d, up from 115,129 boe/d in the second quarter.
“Think of 2018 as really reducing the capital from 2017, from $830 million down to $690 million but still funding the next growth initiative, which is the Sunrise expansion,” Stadnyk says.
ARC is currently building its Sunrise Phase 2 facility, which is expected to add 180 mmcf/d of natural gas processing capacity in mid-2019.
On the natural gas liquids side, Stadnyk said the focus will be on a “material project” at Attachie, an early stage property where a pilot was conducted in 2017.
In all, ARC plans to drill 64 wells in 2018 including 16 crude oil wells at Tower and Ante Creek and 46 liquids-rich natural gas and natural gas wells primarily at Sunrise, Dawson, Parkland, and Attachie.
ARC expects 2017 production to stay flat near 130,000 boe/d.
The company reported net income of $48.5 million for the third quarter of 2017, up from $28.3 million in the 2016 period.