ARC Resources Ltd. Announces Sale of Saskatchewan Assets

ARC Resources Ltd. Announces Sale of Saskatchewan Assets

ARC Resources Ltd. (“ARC”) announced today that it has reached an agreement to sell all of its Saskatchewan assets and operations, which produce approximately 7,500 barrels of oil equivalent (“boe”), to Spartan Energy Corp. (SPE – TSX) for a total cash consideration of $700 million. “Our talented field and technical teams were instrumental in creating significant value for our shareholders from our high-quality Saskatchewan assets over the past 20 years. This strategic transaction will allow ARC to continue to create value for shareholders by developing our premium-quality Montney asset base,” said Myron Stadnyk, ARC’s President and CEO. “Funds from this transaction will further strengthen ARC’s balance sheet, provide additional optionality in funding our capital programs, and manage risk while transforming our business with larger-scale, highly-profitable projects.” ARC has been actively managing its asset portfolio by divesting of over 14,000 boe per day of production since 2009. With this transaction, divestments of approximately 21,500 boe per day of production have led to increased operating and capital efficiencies, a continued focus on ARC’s core Montney asset base, and will continue to improve ARC’s long-term profitability.

ARC has numerous projects that can deliver profitable returns for its shareholders; these projects compete with the best opportunities in the tight oil and shale gas plays across North America. ARC is highly confident that the reserves and production divested will be more than replaced over time, as ARC develops its Montneyopportunities in Dawson, Parkland/Tower, Sunrise, Pouce Coupe, Attachie, Septimus, Blueberry and Sundown; ARC’s Total Petroleum Initially-in-Place (“TPIIP”) in these properties is in excess of 90 Tcf of shale gas and 9.7 billion barrels of tight oil. In addition, ARC will continue to invest in its core Alberta properties at Ante Creek (conventional Montney light oil and natural gas) and Pembina (Cardium light oil).

ARC will update its 2017 budget and guidance with its fourth quarter 2016 news release in February, 2017. Effective January 1, 2017, ARC will eliminate the discount to the Dividend Reinvestment Plan (“DRIP”) and Stock Dividend Program (“SDP”), subject to applicable regulatory and stock exchange approvals, and will review its DRIP and SDP programs in conjunction with the updated 2017 budget and guidance.

The sale includes approximately 7,500 boe per day of production, as at the third quarter of 2016, with 37,893 Mboe of proved plus probable reserves at year-end 2015. The transaction is subject to the satisfaction of normal closing conditions, as well as regulatory approvals and customary post-closing adjustments. The transaction is expected to close on or about December 8, 2016, with an effective date of October 1, 2016. RBC Capital Markets is acting as exclusive financial advisor and Burnet, Duckworth & Palmer LLP is acting as legal counsel on the transaction.


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