CORPORATE HIGHLIGHTS
Fourth Quarter Results
Fourth quarter production averaged a record 408,382 boe(1) per day (58 per cent natural gas and 42 per cent crude oil and liquids(2)), which included 118,898 barrels per day of crude oil and condensate production, the highest in ARC's 30-year history. Production per share(3) increased 10 per cent compared to the fourth quarter of 2024.
ARC generated funds from operations of $874 million(4) ($1.52 per share(4)) and cash flow from operating activities of $668 million ($1.16 per share(4)).
ARC realized an average natural gas price of $3.77 per Mcf(4), which is $1.43 greater than the average AECO 7A Monthly Index price.
Free funds flow was $415 million(4) ($0.72 per share(4)), and net income was $260 million or $0.45 per share. ARC distributed $257 million ($0.45 per share) to shareholders through the base dividend and share repurchases, and allocated the remainder to debt reduction.
ARC declared dividends of $120 million ($0.21 per share(4)) and repurchased 5.1 million common shares for $137 million under its normal course issuer bid ("NCIB").
ARC invested $459 million in capital expenditures(4) during the fourth quarter, which contributed to total capital expenditures of $1.9 billion in 2025, which was within Company guidance.
Subsequent to December 31, 2025, ARC executed an agreement to purchase assets in the Kakwa area of Alberta for approximately $160 million. The transaction is expected to close in February 2026.
Net debt(4) decreased by $191 million compared to the third quarter of 2025. As at December 31, 2025, net debt was $2.9 billion or 0.9 times funds from operations(4).
Year-end 2025 Highlight
ARC generated record annual average production of 374,336 boe per day (59 per cent natural gas and 41 per cent crude oil and liquids), an increase of 10 per cent per share compared to 2024.
ARC recognized funds from operations of $3.2 billion ($5.48 per share), and generated free funds flow of $1.3 billion ($2.20 per share) in 2025.
ARC distributed 75 per cent of free funds flow to shareholders through its base dividend and share repurchases. The remainder was allocated to debt reduction, allowing ARC to further strengthen its balance sheet.
ARC increased its base dividend for the fifth consecutive year. ARC's Board of Directors (the "Board") approved an 11 per cent increase to the quarterly dividend, from $0.19 to $0.21 per share ($0.84 per share, per annum).
ARC's annual average realized natural gas price of $3.51 per Mcf was 89 per cent or $1.65 per Mcf greater than the average AECO 7A Monthly Index price. This marks the 13th consecutive year that ARC's market diversification strategy resulted in a realized natural gas price that exceeded AECO by 20 per cent or greater.
Natural gas curtailments at Sunrise due to low natural gas prices during the third and fourth quarters of 2025 reduced full-year average production by approximately 12,000 boe per day (approximately 70 MMcf per day). The curtailments preserved resource for periods when prices were higher, and allowed ARC to defer approximately $50 million of capital.
In July 2025, ARC completed the acquisition of condensate-rich Montney assets in the Kakwa area of Alberta from Strathcona Resources Ltd. in an all-cash transaction valued at approximately $1.6 billion(5) (the "Kakwa Acquisition").
ARC executed an agreement for the earning and development of up to 36 new contiguous sections in the Montney with the Tsaa Dunne Za Energy Limited Partnership, a limited partnership owned by Halfway River First Nation.
In March 2025, ARC announced a long-term sale and purchase agreement with ExxonMobil LNG Asia Pacific ("EMLAP"), an ExxonMobil affiliate, for the supply of liquefied natural gas ("LNG"). Under the agreement, EMLAP will purchase ARC's LNG offtake from the Cedar LNG Project, approximately 1.5 million tonnes per annum at international pricing. The agreement commences with commercial operations at the Cedar LNG Facility, expected in late 2028.
2025 Reserves(1)(6)
ARC reported record reserves across all categories in 2025. Proved developed producing ("PDP") and total proved plus probable ("2P") reserves increased by 15 per cent and nine per cent, respectively, compared to 2024.
For the 18th consecutive year, ARC replaced greater than 120 per cent of 2P reserves.
For the 20th consecutive year, ARC reported positive technical revisions on a total proved ("1P") and 2P basis.
ARC's before-tax net present value ("NPV") of 2P reserves, discounted at 10 per cent was $38.71 per share(4) at December 31, 2025. The 2P NPV considers the development of 23 per cent of ARC's internally identified inventory(7), providing a long runway for future development and reserve growth.
ARC's reserve life index ("RLI") increased across all three categories. ARC's RLI increased to 4.8 years on a PDP basis, 9.6 years on a 1P, and 15.1 years on a 2P basis.
ARC's consolidated financial statements and notes thereto (the "financial statements") and Management's Discussion and Analysis ("MD&A") as at and for the three months and year ended December 31, 2025, are available on ARC's website at www.arcresources.com and under ARC's SEDAR+ profile at www.sedarplus.ca. The disclosure under the section entitled "Non-GAAP and Other Financial Measures" in ARC's MD&A as at and for the three months and year ended December 31, 2025 (the "2025 Annual MD&A") is incorporated by reference into this news release.
(1)
ARC has adopted the standard six thousand cubic feet ("Mcf") of natural gas to one barrel ("bbl") of crude oil ratio when converting natural gas to barrels of oil equivalent ("boe"). Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different than the energy equivalency of the 6:1 conversion ratio, utilizing the 6:1 conversion ratio may be misleading as an indication of value.
(2)
Throughout this news release, crude oil ("crude oil") refers to light, medium, and heavy crude oil product types as defined by National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Condensate is a natural gas liquid as defined by NI 51-101. Throughout this news release, natural gas liquids ("NGLs") comprise all natural gas liquids as defined by NI 51-101 other than condensate, which is disclosed separately. Throughout this news release, crude oil and liquids ("crude oil and liquids") refers to crude oil, condensate, and NGLs.
(3)
Represents average daily production divided by the diluted weighted average common shares outstanding for the three months ended December 31.
(4)
This is a specified financial measure. See "Non-GAAP and Other Financial Measures" of this news release and in the 2025 Annual MD&A for additional disclosure, which is incorporated by reference.
(5)
The purchase price was approximately $1.6 billion for the assets acquired in the Kakwa Acquisition before purchase price adjustments and unrelated equipment and land.
(6)
GLJ Ltd. ("GLJ") conducted an Independent Qualified Reserves Evaluation ("Reserves Evaluation"), dated February 3, 2026 and effective December 31, 2025, which was prepared in accordance with definitions, standards, and procedures in the Canadian Oil and Gas Evaluation ("COGE") Handbook and NI 51-101. The Reserves Evaluation was based on the GLJ Ltd., Sproule ERCE, McDaniel & Associates Consultants Ltd. Three Consultant Average ("3CA") forecast pricing and foreign exchange rates at January 1, 2026.
(7)
Internally identified inventory refers to drilling locations identified by ARC based on its own internal evaluation and which were not independently verified by GLJ. Such inventory does not constitute reserves or resources as defined under NI 51‑101.
FINANCIAL AND OPERATIONAL RESULTS
(Cdn$ millions, except per share amounts(1), boe amounts,
Three Months Ended
Year Ended
and common shares outstanding)
September 30, 2025
December 31, 2025
December 31, 2024
December 31, 2025
December 31, 2024
FINANCIAL RESULTS
Net income
214.4
259.9
370.3
1,275.1
1,124.1
Per share
0.37
0.45
0.63
2.19
1.88
Cash flow from operating activities
713.3
668.1
650.9
3,093.5
2,348.6
Per share
1.23
1.16
1.10
5.31
3.94
Funds from operations
779.0
874.3
770.4
3,192.4
2,472.5
Per share
1.34
1.52
1.30
5.48
4.15
Free funds flow
282.6
415.4
420.4
1,283.7
627.0
Per share
0.49
0.72
0.71
2.20
1.05
Dividends declared
109.6
120.0
112.2
451.8
416.2
Per share
0.19
0.21
0.19
0.78
0.70
Cash flow used in investing activities
2,160.0
475.5
423.3
3,536.0
1,906.2
Capital expenditures(2)
496.4
458.9
350.0
1,908.7
1,845.5
Long-term debt
2,784.8
2,878.1
1,387.4
2,878.1
1,387.4
Net debt
3,056.6
2,866.1
1,335.6
2,866.1
1,335.6
Common shares outstanding, weighted average diluted (millions)
581.5
574.1
592.3
582.6
596.4
Common shares outstanding, end of period (millions)
575.7
570.6
589.6
570.6
589.6
OPERATIONAL RESULTS
Production
Crude oil and condensate (bbl/day)
113,959
118,898
102,977
106,984
87,266
Natural gas (MMcf/day)
1,172
1,410
1,418
1,324
1,307
NGLs (bbl/day)
50,014
54,500
42,998
46,625
42,787
Total (boe/day)
359,236
408,382
382,341
374,336
347,908
Average realized price
Crude oil ($/bbl)(3)
82.75
73.63
91.46
81.75
91.46
Condensate ($/bbl)(3)
84.66
78.45
95.52
86.21
97.00
Natural gas ($/Mcf)(3)
2.75
3.77
2.58
3.51
2.37
NGLs ($/bbl)(3)
17.47
18.97
26.83
21.81
24.59
Average realized price ($/boe)(3)
38.23
38.30
38.25
39.68
36.15
Netback per boe
Commodity sales from production ($/boe)(3)
38.23
38.30
38.25
39.68
36.15
Royalties ($/boe)(3)
(4.18)
(3.07)
(4.07)
(3.93)
(4.12)
Operating expense ($/boe)(3)
(6.36)
(5.18)
(4.18)
(5.39)
(4.68)
Transportation expense ($/boe)(3)
(4.46)
(4.83)
(5.03)
(5.04)
(5.21)
Netback per boe ($/boe)(3)
23.23
25.22
24.97
25.32
22.14
TRADING STATISTICS(4)
High price
29.27
27.20
27.40
31.56
27.40
Low price
23.67
23.54
22.48
22.63
19.44
Close price
25.38
25.75
26.07
25.75
26.07
Average daily volume (thousands of shares)
5,046
5,431
3,747
4,431
3,610
(1)
Per share amounts, with the exception of dividends, are based on weighted average diluted common shares.
(2)
Refer to the section entitled "About ARC Resources Ltd." contained within the 2025 Annual MD&A for historical capital expenditures, which information is incorporated by reference into this news release.
(3)
This is a specified financial measure. See "Non-GAAP and Other Financial Measures" of this news release and in the 2025 Annual MD&A for additional disclosure, which information is incorporated by reference.
(4)
Trading prices are stated in Canadian dollars on a per share basis and are based on intra-day trading on the Toronto Stock Exchange.
OUTLOOK
ARC remains committed to delivering on its strategy to deliver sustainable free funds flow per share growth to provide shareholders with a durable and attractive return. Consistent with previous years, the strategy is underpinned by its longstanding principles of safety, capital discipline, and preserving a strong balance sheet.
Operations Update
Attachie
At over 360 net sections, Attachie is a large condensate-rich asset and remains in the early stages of development. In 2025, its first year of operations, ARC focused on capturing and applying learnings to deliver repeatable well performance and improved capital efficiencies to ensure long-term profitability at the asset.
The early production results from the most recent Upper Montney pads at Attachie, brought on stream in late 2025 and early 2026, have been variable and below expectations. In response, ARC has adjusted its development schedule to further evaluate well performance and determine an appropriate development plan for Attachie going forward. As a result, ARC is removing asset-level production guidance at Attachie for 2026.
ARC remains confident in the long‑term potential of the resource at Attachie. The Company will continue to advance the asset in a disciplined manner, allocating capital to further refine well design and apply operational learnings.
2026 Guidance
Corporate guidance for 2026 remains unchanged. Asset-level production contribution and capital allocation may shift throughout the year as the development plan for Attachie evolves.
Average annual production of between 405,000 and 420,000 boe per day (61 per cent natural gas and 39 per cent crude oil and liquids).
Planned capital expenditures of between $1.8 to $1.9 billion(1).
Based on the current forward curve and Company guidance, ARC estimates 2026 free funds flow of approximately $1.2 billion(2), essentially all of which is earmarked for shareholder returns via the base dividend and share repurchases.
ARC's 2026 corporate guidance is based on various commodity price scenarios and economic conditions. Production guidance does not include any assumption for possible natural gas production curtailments due to low natural gas prices. Certain guidance estimates may fluctuate with commodity price changes and regulatory changes. ARC's guidance provides readers with the information relevant to Management's expectations for financial and operational results for 2026.
ARC's 2025 and 2026 annual guidance and a review of 2025 actual results are outlined below:
2025 Guidance
2025 Actual
% Variance from
2025 Guidance
2026 Guidance
Production
Crude oil and condensate (bbl/day)
107,000 - 112,000
106,984
—
105,000 - 115,000
Natural gas (MMcf/day)
1,290 - 1,310
1,324
1
1,500 - 1,520
NGLs (bbl/day)
43,000 - 45,000
46,625
4
48,000 - 52,000
Total (boe/day)
365,000 - 375,000
374,336
—
405,000 - 420,000
Expenses ($/boe)(3)
Operating
5.00 - 5.50
5.39
—
5.40 - 5.90
Transportation
5.00 - 5.50
5.04
—
5.25 - 5.75
General and administrative ("G&A") expense before share-based compensation expense
1.00 - 1.10
1.10
—
1.00 - 1.10
G&A - share-based compensation expense
0.30 - 0.40
0.18
(40)
0.25 - 0.35
Interest and financing(4)
0.90 - 1.00
0.98
—
1.10 - 1.20
Current income tax expense as a per cent of funds from operations(3)
5 - 10
8
—
5 - 10
Capital expenditures ($ billions)
1.85 - 1.95
1.91
—
1.8 - 1.9
(1)
Refer to the section entitled "About ARC Resources Ltd." contained within the 2025 Annual MD&A for historical capital expenditures, which information is incorporated by reference into this news release.
(2)
Based on forward pricing as of January 22, 2026 of US$59 per barrel WTI; C$2.70 per Mcf AECO.
(3)
This is a specified financial measure. See "Non-GAAP and Other Financial Measures" of this news release and in the 2025 Annual MD&A for additional disclosure, which information is incorporated by reference.
(4)
Excludes accretion expense.
FINANCIAL AND OPERATIONAL RESULTS
Production
Fourth Quarter 2025
ARC generated record average production during the fourth quarter of 408,382 boe per day (58 per cent natural gas and 42 per cent crude oil and liquids). Production increased seven per cent compared to the fourth quarter of 2024 and 10 per cent on a per share basis.
The increase year-over-year was driven primarily by the Kakwa Acquisition. During the fourth quarter, production at Kakwa averaged 215,073 boe per day (42 per cent natural gas and 58 per cent crude oil and liquids), which included 124,505 barrels per day of condensate and natural gas liquids.
Attachie production averaged 28,286 boe per day during the fourth quarter (41 per cent natural gas and 59 per cent crude oil and liquids), and included 13,182 barrels per day of condensate.
Natural gas production at Sunrise was restored in the fourth quarter when AECO natural gas prices recovered.
Full-Year 2025
Full-year production averaged 374,336 boe per day (59 per cent natural gas and 41 per cent crude oil and liquids), which was in line with Company guidance.
This included record average crude oil and condensate production of 106,984 barrels per day, driven primarily by Attachie and the Kakwa Acquisition that closed on July 2, 2025.
The natural gas production curtailments at Sunrise that occurred from July through October reduced full-year average production by approximately 12,000 boe per day. This allowed ARC to defer approximately $50 million of capital expenditures earmarked to sustain production at Sunrise.
Funds from Operations, Cash Flow from Operating Activities, and Free Funds Flow
Fourth Quarter 2025
ARC generated $874 million ($1.52 per share) of funds from operations in the fourth quarter. This represents a 13 per cent increase ($104 million or $0.22 per share) compared to the same quarter of the prior year, driven primarily by higher production at Kakwa and Attachie.
ARC reported free funds flow of $415 million ($0.72 per share) in the fourth quarter.
Full-Year 2025
In 2025, ARC generated funds from operations of $3.2 billion ($5.48 per share) and cash from operating activities of $3.1 billion ($5.31 per share).
Free funds flow totalled $1.3 billion ($2.20 per share) for the year.
The following table details the change in funds from operations for the fourth quarter of 2025 relative to the third quarter of 2025.
Funds from Operations Reconciliation
$ millions
$/share(1)
Funds from operations for the three months ended September 30, 2025
779.0
1.34
Production volumes
Crude oil and liquids
45.6
0.08
Natural gas
60.1
0.10
Commodity prices
Crude oil and liquids
(62.5)
(0.11)
Natural gas
132.1
0.23
Sales of third-party purchases
66.2
0.11
Interest and other income
1.4
—
Realized gain on risk management contracts
(11.1)
(0.02)
Royalties
22.7
0.04
Expenses
Operating
15.6
0.03
Transportation
(34.2)
(0.06)
Third-party purchases
(65.3)
(0.11)
G&A
(23.0)
(0.04)
Interest and financing
(1.4)
—
Realized loss on foreign exchange
(3.8)
(0.01)
Current income tax
(47.0)
(0.08)
Other
(0.1)
—
Weighted average shares, diluted
—
0.02
Funds from operations for the three months ended December 31, 2025
874.3
1.52
(1)
Per share amounts are based on weighted average diluted common shares.
The following table details the change in funds from operations for the fourth quarter of 2025 relative to the fourth quarter of 2024.
Funds from Operations Reconciliation
$ millions
$/share(1)
Funds from operations for the three months ended December 31, 2024
770.4
1.30
Production volumes
Crude oil and liquids
167.9
0.28
Natural gas
(2.2)
—
Commodity prices
Crude oil and liquids
(226.7)
(0.39)
Natural gas
154.3
0.26
Sales of third-party purchases
100.4
0.17
Interest and other income
(1.5)
—
Realized gain on risk management contracts
21.8
0.04
Royalties
27.8
0.05
Expenses
Operating
(47.9)
(0.08)
Transportation
(4.6)
(0.01)
Third-party purchases
(96.0)
(0.16)
G&A
18.5
0.03
Interest and financing
(10.5)
(0.02)
Realized loss on foreign exchange
(5.8)
(0.01)
Current income tax
6.4
0.01
Other
2.0
—
Weighted average shares, diluted
—
0.05
Funds from operations for the three months ended December 31, 2025
874.3
1.52
(1)
Per share amounts are based on weighted average diluted common shares.
Shareholder Returns
In 2025, ARC distributed 75 per cent of free funds flow or $966 million ($1.66 per share) to shareholders through a combination of dividends and share repurchases under its NCIB. The remainder was allocated to debt reduction to preserve ARC's financial strength.
In the third quarter of 2025, the Board approved an increase of 11 per cent to the Company's quarterly dividend, from $0.19 per share to $0.21 per share ($0.76 per share to $0.84 per share, per annum).
During the fourth quarter, ARC declared dividends of $120 million ($0.21 per share) and repurchased 5.1 million common shares under its NCIB at a weighted average price of $26.86 per share.
In 2025, ARC repurchased 19.7 million common shares under its NCIB at a weighted average price of $26.09 per share throughout the year.
Since commencing its initial NCIB in September 2021, ARC has repurchased approximately 22 per cent (159 million common shares) of its total outstanding shares at a weighted average price of $17.74 per share.
ARC intends to distribute essentially all free funds flow to shareholders in 2026 through its growing base dividend and continued share repurchases.
Operating, Transportation, and General and Administrative Expense
Operating Expense
ARC's fourth quarter 2025 operating expense of $5.18 per boe was 19 per cent or $1.18 per boe lower than the previous quarter. The decrease in operating costs per boe is primarily due to Sunrise volumes being restored and the completion of planned maintenance activity.
Full-year 2025 operating expense of $5.39 per boe was in line with Company guidance.
Transportation Expense
ARC's fourth quarter 2025 transportation expense per boe of $4.83 decreased by four per cent or $0.20 per boe compared to the same period in the prior year.
ARC's full-year 2025 transportation expense of $5.04 per boe was at the low end of ARC's guidance range of $5.00 to $5.50 per boe.
General and Administrative Expense
ARC's fourth quarter 2025 general and administrative expense per boe of $1.26 decreased 33 per cent from the same period of the prior year, primarily due to the revaluation of the liability associated with ARC's share-based compensation plans.
ARC's full-year 2025 general and administrative expense of $1.28 per boe decreased 34 per cent compared to the prior year and was slightly lower than the Company guidance range of $1.30 to $1.50 per boe.
Cash Flow Used in Investing Activities and Capital Expenditures
Cash flow used in investing activities was $476 million during the fourth quarter of 2025. ARC invested $459 million in capital expenditures to drill 39 wells and complete 32 wells. Drilling activity was focused primarily at Kakwa, Ante Creek, and Attachie.
Cash flow from investing activities was $3.5 billion and capital expenditures were $1.9 billion. ARC drilled 144 wells and completed 157 wells across its asset base in 2025.
The following table details ARC's 2025 drilling and completions activities by area.
Year ended December 31, 2025
Area
Wells Drilled
Wells Completed
Kakwa
83
80
Attachie
25
33
Greater Dawson
22
25
