ARC Resources targets free cash flow at $75 WTI after Q2 output hit 365,000 boe/d from its Montney position. Operating costs are set to fall 8-10% this year as the company works through a $1.6B capital budget.
Alpha Score of 40 reflects weak overall profile with moderate momentum, poor value, moderate quality, moderate sentiment.
ARC Resources laid out a plan to survive a deeper crude slump. The company now targets achieving free cash flow at $75 WTI, down from its current breakeven near $85, management said on a July 14 shareholder call.
Production averaged 365,000 barrels of oil equivalent per day in the second quarter, driven by the Montney shale position in Alberta and British Columbia. ARC's 2026 capital budget stands at $1.6 billion, with 10 of 12 operated rigs running.
Cost reductions are the main lever. The company expects per-barrel operating expenses to fall 8-10% this year versus 2025, partly from lower service costs and partly from higher throughput at its gas processing plants. Management pointed to a larger average well size in the Montney as a structural efficiency gain.
ARC reduced net debt by $340 million in the quarter to $2.3 billion, bringing its leverage ratio to 1.1 times EBITDA. The company has no near-term maturities beyond $500 million in revolving credit drawn at June 30.
The board authorized a 6% dividend increase to C$0.88 per share quarterly, payable Oct. 15. The new payout consumes about 18% of expected free cash flow at $80 WTI.
ARC issues formal second-quarter results July 30 before the open.
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