Arc Resources Q2 profit rises as production jumps 8%
Overview
Arc Resources Q2 net income rises to C$396.1 mln from C$239.5 mln in Q2, 2024
Q2 production rises 8% yr/yr to 357,228 boe/day
Funds from operations for Q2 at C$682 mln, driven by higher gas prices
Co acquires Kakwa Assets for C$1.6 bln, revises 2025 guidance
Outlook
Arc expects 2025 production between 385,000 and 395,000 boe per day
Company plans C$1.85 to C$1.95 bln in 2025 capital expenditures
Arc sees 2025 free funds flow between C$1.3 and C$1.5 bln
Production in H2 2025 expected to exceed 410,000 boe per day
Result Drivers
ATTACHIE PRODUCTION - Attachie asset contributed 26,833 boe/day, impacting Q2 results
NATURAL GAS CURTAILMENT - Co curtailed natural gas production at Sunrise due to weak prices
MARKET DIVERSIFICATION - Realized natural gas price of C$3.19 per Mcf, higher than AECO index
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 EPS | C$0.68 | ||
Q2 Net Income | C$396.10 mln | ||
Q2 FFO | C$682.10 mln | ||
Q2 Adjusted Free Cash Flow | C$699.10 mln | ||
Q2 Capex | C$496.30 mln | ||
Q2 FFO Per Share | C$1.17 | ||
Q2 Net Debt | C$1.29 bln |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 19 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the oil & gas exploration and production peer group is "buy"
Wall Street's median 12-month price target for ARC Resources Ltd is C$34.00, about 18.3% above its July 30 closing price of C$27.77
The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 9 three months ago
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