ARC Resources Ltd. Announces Reduced 2015 Capital Program

ARC Resources Ltd. Announces Reduced 2015 Capital Program

ARC Resources Ltd. (“ARC”) announced that it has entered into an agreement to sell 15.5 million common shares at $22.55 per share to raise gross proceeds of approximately $350 million on a bought deal basis. The issue will be made through a syndicate of underwriters led by RBC Capital Markets.

The net proceeds will be used to temporarily reduce bank indebtedness, increase working capital and to fund ongoing capital expenditure programs. This offering is subject to normal regulatory approvals and is expected to close on or about January 26, 2015. The shares will be sold by way of a short-form prospectus to be filed in each of the provinces of Canada.

The Underwriters have also been granted an over-allotment option exercisable in whole or in part, at any one time, until January 30, 2015, to purchase up to 2.3 million common shares on the same terms as the common shares sold under the offering, to cover over-allotments, if any, and for market stabilization purposes. The maximum gross proceeds that will be raised under the offering will be $402.7 million should the over-allotment option be exercised in full.

ARC plans to execute a $750 million capital program in 2015, reduced from the previously announced $875 million capital budget, due to the continued deterioration in commodity prices. The 2015 capital program remains strategically consistent with our long-term plan and is focused on creating value by directing capital to a mix of crude oil, liquids-rich gas and natural gas opportunities that continue to provide profitable returns at low commodity prices. ARC’s 2015 capital budget includes investment in strategic infrastructure at Sunrise and front-end engineering and government applications for the Dawson liquids-rich gas processing facility, which will set the stage for future growth in key areas in the Montney region. Capital will also be directed to advancing the lower Montney development at Dawson and Pouce Coupe as well as the construction of a 5,000 barrel per day oil battery at Tower. Despite the reduction in capital, ARC expects average 2015 production volumes to continue to be in the range of 120,000 to 125,000 boe per day.

The issuance of equity will provide increased certainty for ARC to pursue its planned capital programs while still preserving its strong financial position.

Source: ARC Resources Ltd.

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