ARC Resources Ltd.

ARC reported Q4 production of 408,000 BOE/day, a record, which Terry Anderson said was 7% year-over-year and 10% on a per-share basis. Krist Bibby said Q4 funds from operations was $874 million, up 11% versus expectations, and free cash flow was $415 million, 47% above Q3 and 40% above analyst expectations. Full-year 2025 free funds flow was $1.3 billion, roughly double 2024, and full-year capital expenditures were about $1.9 billion, within guidance. ARC exited the year with roughly $2.9 billion of net debt, about 0.9x 2025 cash flow, down about $200 million sequentially. 2026 guidance remains unchanged at 405,000 to 420,000 BOE/day of corporate production and $1.8 billion to $1.9 billion of capital, with expected free funds flow of about $1.2 billion at current prices.

Terry Anderson struck an upbeat but disciplined tone, emphasizing record safety performance, record production, and reserve growth while repeatedly framing the company’s strategy as profitability over volumes. He highlighted LNG Canada deliveries, the coming Gulf Coast LNG exposure, and the value of ARC’s long-life Montney inventory and owned infrastructure. At the same time, he said Attachie is being slowed down so the company can learn from early well data and make the right long-term development decisions rather than rush capital.

Kris Bibby focused on the strength of the quarter and balance sheet: production of 408,000 BOE/day was 4% above forecast, funds from operations was $874 million, and free cash flow was $415 million. She said ARC returned 75% of free funds flow to shareholders in 2025, including nearly 20 million shares repurchased for $514 million and $452 million of dividends, while ending the year with roughly $2.9 billion of net debt, or about 0.9x cash flow. She also noted operating expenses per BOE were within guidance and transportation expense per BOE was at the low end of guidance, and said 2026 free funds flow is expected to be about $1.2 billion at current prices.

Analysts pressed management on Attachie’s weaker recent wells, asking whether new completion techniques failed, whether the issue was geologic, and what specifically changed from the earlier pilots. Terry Anderson said there was no major completion-design change, the latest pad had only been on production for 5 or 6 weeks, and the company is seeing variability and even casing deformation that requires more time to diagnose before spending further capital. Questions also focused on capital reallocation and balance-sheet flexibility; management said the roughly $250 million Attachie placeholder could be shifted to Kakwa or other opportunities, while the balance sheet is at the right level and buybacks will continue but without using permanent capital for them.