ARC Resources (ARX) Q2 2025 earnings summary

Executive summary

• Q2 2025 production averaged 357,228–357,000 BOE/day, up 8% year-over-year and 11% per share, with a 39–40% liquids and 60–61% natural gas mix, including 100,000 barrels/day of light oil and condensate.

• Kakwa acquisition closed July 2025 for $1.6B, adding 40,000 BOE/day and extending inventory by 3 years; now the largest Montney producer with ~410,000 BOE/day.

• Attachie land position increased by over 10% through partnership, with Q2 production at 26,833–27,000 BOE/day and H2 2025 forecast at 35,000–40,000 BOE/day.

• All free funds flow ($186–188M in Q2) returned to shareholders via dividends and buybacks for the third consecutive year.

• Sunrise dry gas production (60,000 BOE/day) shut in due to low prices, with restoration planned when prices recover.

Financial highlights

• Q2 2025 net income was $396M ($0.68/share), funds from operations $682M ($1.17/share), and free funds flow $186M ($0.32/share), with capital expenditures of $496M.

• Cash flow per share was 5% above analyst estimates; free cash flow was 90% above estimates due to lower capital spending.

• Realized natural gas price was $3.19/MCF, $1.12 above AECO average.

• Operating expense was $5.17/BOE, down 6% year-over-year; G&A expense was $1.43/BOE, down 23%.

• Net debt at June 30, 2025 was $1.3B, or 0.4x funds from operations.

Outlook and guidance

• 2025 production guidance raised to 385,000–395,000 BOE/day, with H2 2025 expected to exceed 410,000 BOE/day, including 107,000–120,000 barrels/day of light oil and condensate.

• 2025 capital expenditures revised to $1.85–1.95B, up from $1.6–1.7B, with 55% allocated to Alberta and 45% to BC.

• Free funds flow for 2025 projected at $1.3–1.5B, with nearly all to be returned to shareholders.

• Operating cost guidance increased to $5.00–$5.50/BOE, driven by Kakwa water handling and Sunrise shut-ins.

• Attachie Phase II investment decision expected with 2026 budget in November.