ARC Resources Ltd. Announces Reduced Capital Program of up to $300 Million for 2020 and Reduces Its Monthly Dividend to $0.02 per Share
March 13, 20205:31 AM CNW
CALGARY – (ARX – TSX) ARC Resources Ltd. (“ARC” or the “Company”) announces that its board of directors (the “Board”) has approved actions to right-size the Company’s 2020 capital budget and dividend. The 2020 capital budget has been reduced from $500 million to no more than $300 million, and ARC has reduced its monthly dividend from $0.05 per share to $0.02 per share. After the payment of the March dividend, ARC intends to change to a quarterly dividend of $0.06 per share compared to its previous monthly dividend of $0.05 per share. These changes are consistent with ARC’s long-term strategy of maintaining a strong balance sheet, delivering a meaningful and sustainable dividend to shareholders, and investing in profitable growth when it makes sense to do so.“ARC’s focus on creating long-term value for our shareholders while preserving our strong financial position is a hallmark of our Company,” remarked Terry Anderson, ARC’s Chief Executive Officer. “The rapid decline in global commodity prices has created a significant headwind for energy producers, and we feel it is prudent to adjust our spending levels in order to protect our balance sheet and to ensure the sustainability of our business based on our current understanding of existing business conditions. We believe that with these decisive actions, ARC will remain well-positioned to deliver on our long-term strategy of risk-managed value creation and will emerge from this period of economic uncertainty in a position of financial strength.”ARC expects average daily production for 2020 to be in the range of 150,000 to 155,000 barrels of oil equivalent per day, with the Dawson Phase IV gas processing and liquids-handling facility substantially complete and on schedule to be brought on-stream in the second quarter of 2020. The majority of the capital spending that is being deferred in 2020 relates to drilling and completions activities in the greater Dawson and Ante Creek areas. While the reduced capital program does reduce 2020 production guidance modestly, the deferred drilling and completions activities are expected to have a larger impact on 2021 production levels.ARC’s business is sustainable due to its disciplined capital allocation, its low cost structure and highly efficient operations, and its robust market diversification activities. At current commodity prices, ARC is focused on maintaining low debt levels to ensure the sustainability and profitability of the business over the long term, while managing a reasonable payout.