ARC Resources Ltd. announced yesterday that the company’s Board of Directors has approved a $550 million capital program for 2016 that focuses on balance sheet strength and long-term value creation through continued development of ARC’s low-cost, high-value Montney crude oil, liquids-rich gas and natural gas assets.
ARC expects year-over-year annual average production rates to increase approximately 5% in 2016, from 2015 levels.
“Our focus on transitioning our business to best in class, high-value Montney development, is resulting in improved capital efficiencies and lower operating costs,” said Myron Stadnyk, ARC’s President and CEO. “Our 2016 capital program maintains a focus on near-term value creation, while investing in long-term projects that advance ARC’s leadership position in the Montney.”
$350 million of the budget is for operations in Northeastern BC. The same budget was spent in 2014, and the company actually spent $476 million.
ARC plans to spend $89 million at Parkland/Tower in 2016 to hold facilities at capacity, including the expanded oil battery at Tower, and to continue to optimize tight oil completions at Tower. ARC plans to drill 12 gross operated crude oil wells at Tower and three liquids-rich wells at Parkland.
Well performance at Tower continues to exceed expectations and ARC expects 2016 annual production at Parkland/Tower to average approximately 29,000 boe per day, approximately 25% higher than estimated 2015 production. Total crude oil and liquids production at Parkland/Tower is expected to increase about 95%.
Of the total capital of $146 million saved for Dawson, ARC plans to spend approximately $90 million on strategic infrastructure at Dawson to proceed with construction of the Dawson Phase 3 gas processing facility.
ARC plans to spend$65 million at Attachie in 2016 to continue to expand its understanding of the asset by drilling three gross operated wells and investing in key infrastructure to expand existing pilot projects.
The $550 million 2016 capital program includes non-operated budgeted capital of approximately $11 million – spending will be focused mostly on CO2 purchases and maintenance activity.