ARC Resources (ARX) investor relations material

Executive summary

• Announced acquisition by Shell in a $22 billion cash and share deal, approved by shareholders and pending final regulatory approvals, expected to close in H2 or Q3 2026.

• Q2 2026 production averaged 390,465 boe/d, up 9% year-over-year and 13% per share, with 61% natural gas and 39% crude oil and liquids.

• Net income for Q2 was $353 million ($0.62/share), down 9% per share year-over-year, mainly due to lower risk management gains and higher royalties and expenses.

• Funds from operations reached $816.3 million ($1.44/share), cash flow from operations $872.0 million ($1.54/share), and free funds flow $349 million ($0.62/share).

Financial highlights

• Q2 2026 funds from operations: $816.3 million ($1.44/share), up 20% year-over-year.

• Free funds flow: $348.9 million ($0.62/share), up 94% per share year-over-year.

• Cash flow from operating activities: $872.0 million ($1.54/share), up 25% year-over-year.

• Capital expenditures: $467.4 million in Q2, mainly for drilling and completions at Kakwa and Greater Dawson.

• Dividends declared: $119.0 million ($0.21/share) in Q2.

• Net debt at June 30, 2026: $2.6 billion, or 0.8x funds from operations.

• Realized natural gas price was $2.52/Mcf, $1.01 above AECO 7A Monthly Index.

• Operating expense per boe was $6.98, up 25% sequentially and 35% year-over-year.

• Transportation expense per boe: $4.97 in Q2, down 7% year-over-year.

Outlook and guidance

• 2026 capital budget and production guidance unchanged: $1.8–$1.9 billion capex, production 405,000–420,000 boe/d (61% natural gas, 39% crude oil and liquids).

• Full-year production expected to average 405,000–420,000 boe/d.

• Operating expense guidance: $5.40–$5.90/boe; YTD actual $6.25/boe due to higher maintenance and acquisition costs.

• G&A expense exceeded guidance due to one-time costs related to the Shell arrangement.

• Guidance does not assume natural gas curtailments; expense and tax guidance provided for 2026.