ARC Resources’ earnings down in Q3 2023
Canadian Montney producer ARC Resources said November 2 it had Q3 2023 net income of C$236.4mn (US$172.6mn), down from C$867.8mn in the same period last year.
Cash flow from operating activities declined to C$604.2mn from C$1.1bn, while free funds flow, after capital expenditures of C$401.4mn, fell to C$260.8mn from C$580.1mn.
Total production increased to 360,177 barrels of oil equivalent (boe)/day from 342,034 boe/day in Q3 2022. Natural gas production averaged 1.35bn ft3/day in the third quarter, up from 1.23bn ft3/day a year earlier, while crude oil and condensate production declined to 87,098 barrels/day from 90,352 barrels/day.
While ARC’s natural gas market diversification efforts yielded an average realised natural gas price 32% higher than the benchmark AECO 7A average, the quarterly average $C3.16/’000 ft3 was still sharply lower than the Q3 2022 average of C$9.29/’000 ft3.
Earlier this year, ARC said it had entered into discussions with Cedar LNG to provide 200mn ft3/day of feed gas to the floating LNG project on Canada’s west coast, about half the total required for the 3mn tonnes/year facility.
“The company continues to advance additional opportunities to supply natural gas to international markets through long-term LNG supply agreements,” it said, noting its plans to “market up to 25% of its future natural gas production to international markets with revenue linked to international or LNG pricing.”
In its Q3 2023 earnings report, Pembina Pipelines, which owns 49.9% of Cedar LNG alongside majority owner Haisla Nation, said non-binding memorandums of understanding had been signed “with investment grade counterparties for the project’s total base liquefaction capacity.”