CALGARY, A.B. — ARC Resources Ltd. reported its 2016 year-end reserves and resources information on Wednesday.
“ARC delivered another year of outstanding reserves results, replacing 260 per cent of 2016 produced reserves through development activities at low finding and development costs of $4.02 per boe for proved plus probable reserves. Exceptional well performance from our Montney assets resulted in positive technical revisions and material reserves growth in 2016. These results highlight the increasing depth of ARC’s low-cost Montney asset base and the strong technical expertise of our team,” said Myron Stadnyk, President and CEO. “An updated Independent Resources Evaluation for our northeast British Columbia and Pouce Coupe assets also saw significant growth, with now greater than 100 Tcf of total shale gas initially-in-place and more than 10 billion barrels of total tight oil initially-in-place identified across ARC’s Montney lands. Coupled with our strong balance sheet and excellent operating and capital efficiencies, ARC is in an enviable position as we continue to develop these world-class assets and gain greater confidence in initiating larger-scale development projects across our Montney portfolio.”
Highlights from the report released by ARC include:
•Replaced 260 per cent of total 2016 production, adding 113.5 MMboe of proved plus probable reserves through development activities. Over the last nine years, ARC has replaced an average of 200 per cent or greater produced reserves through development activities.
•Positive technical revisions of 33 MMboe (2P) were realized, predominantly in Sunrise and Dawson, reflecting the strong well performance of ARC’s Montney assets.
•Proved developed producing (“PDP”) reserves decreased from 222 MMboe to 212 MMboe. The net decrease in PDP reserves was driven by dispositions, notably ARC’s non-core Saskatchewan asset sale which accounted for 21 MMboe of the total 24 MMboe divested at year-end 2016.
•Total proved reserves increased by eight per cent from 393 MMboe to 426 MMboe, and 2P reserves increased by seven per cent from 687 MMboe to 737 MMboe.
•Replaced 289 per cent of 2016 natural gas production, adding 0.5 Tcf of 2P natural gas reserves. Replaced 725 per cent of natural gas liquids (“NGLs”) production, adding 21.0 MMbbl of 2P NGLs reserves. Replaced 76 per cent of 2016 oil production, adding 8.7 MMbbl of 2P oil reserves. Replaced 97 per cent of 2016 oil produced, disregarding production from ARC’s Saskatchewan assets which were sold in the fourth quarter of 2016.
•Material reserves growth was realized in ARC’s Montney assets, particularly in Sunrise, Dawson, Parkland/Tower, Attachie, and Ante Creek.
•Finding and Development (“F&D”) costs were $4.02 per boe for 2P reserves, $5.15 per boe for proved reserves and $10.46 per boe for proved producing reserves, excluding Future Development Capital (“FDC”). Significant NE BC Montney reserve additions combined with capital reductions contributed to the 42 per cent reduction in 2P F&D costs relative to 2015.
•FDC increased by $25 million compared to year-end 2015, to total $2.8 billion at year-end 2016. Adds due to additional development activities in the Montney were offset by the FDC reduction associated with dispositions that occurred in 2016.
•ARC updated an Independent Resources Evaluation (the “Resources Evaluation” or “Independent Resources Evaluation”) for its lands in the NE BC Montney region, including lands at Pouce Coupe in Alberta. The updated evaluation realized an increase in the identified resource base on ARC’s NE BC Montney lands. The shale gas Total Petroleum Initially-in-Place (“TPIIP”) increased 13 per cent from 90.0 Tcf in 2015 to 101.5 Tcf in 2016 and tight oil TPIIP increased nine per cent from 9.7 billion barrels of oil in 2015 to 10.5 billion barrels in 2016
•Best Estimate Risked Development Pending resources increased to 529 MMboe at year-end 2016 from 471 MMboe at year-end 2015, while before-tax present value, discounted at 10 per cent, increased to $1.8 billion from $1.2 billion year-over-year.