ARC Resources Ltd Q4 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Travis Wood - National Bank of Canada - Analyst : Yes, thanks. Morning, everybody. I have a couple of questions here. First, Terry, in your opening remarks, you mentioned, I think, an attractive risk profile and how you're thinking about the NCIB. With, I think 50% to 80% of that free cash allocated to some sort of return of capital profile, how REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2022 / 3:00PM, ARX.TO - Q4 2021 ARC Resources Ltd Earnings Call should we start thinking about dividend growth, especially as we start to appreciate the magnitude of the free cash that ARC is spitting out right now?

Question: Travis Wood - National Bank of Canada - Analyst : Okay. And then just -- I mean, trying to -- appreciating that maybe you were at the top end of a cycle, uncertain how long it -- we drive along, but how can we think about stretching that? Or how are you guys thinking about stretching it through the low cycles in terms of what kind of commodity price assumptions you're running? Or where do you like to see the pay out or leverage? Or how are you thinking about that on a lower cycle basis just to ensure that sustainability of its base dividend?

Question: Travis Wood - National Bank of Canada - Analyst : Okay, that makes sense. Thanks for that color. And then just one final one around this. You've been really active on the NCIB. Given the plans for base dividend growth nearing 10% on the NCIB, probably by midyear, do you see the potential to run an SIB as well?

Question: Travis Wood - National Bank of Canada - Analyst : Okay. And just one final one here. Now you just sparked a thought -- that intrinsic value you kind of highlight the NAV on from the reserve report in the note. How do you guys think about intrinsic value internally? And do you put some goalposts of commodity prices around that intrinsic value as well? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2022 / 3:00PM, ARX.TO - Q4 2021 ARC Resources Ltd Earnings Call

Question: Travis Wood - National Bank of Canada - Analyst : Okay. That's fantastic. Thanks. Thanks for the time. Thanks for taking the questions.

Question: Jamie Kubik - CIBC Capital Markets - Analyst : Yes, good morning and thank you for taking my question here. I have a couple. Maybe just with respect to operating costs, we saw OpEx trend lower through 2021 and Q4 ended the year at around $3.50 a BOE. Your guidance for 2022 implies this increases a bit. Can you just talk a bit about where the inflation this year might happen versus last year? Do you sort of expect OpEx to trend through 2022?

Question: Jamie Kubik - CIBC Capital Markets - Analyst : Okay, great. That's helpful. And then maybe sticking with Kakwa here. You did indicate sustaining capital on that asset could be reduced by 10% over time. And you also highlight that the reduction in drilling completion costs and the asset year on year of about 16%. Does the forward reduction REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2022 / 3:00PM, ARX.TO - Q4 2021 ARC Resources Ltd Earnings Call of 10% -- is that primarily the result of the reduced drilling and completion costs? Or is there an additional step down that you see possibly coming as a result of something else at Kakwa?

Question: Jamie Kubik - CIBC Capital Markets - Analyst : Okay, that's great. And then maybe last one, just dovetailing a bit off what Travis was asking, but ARC really aggressive at repurchasing stock through 2021. We did see that taper a bit in January. Should we think of the slowdown in repurchases as some level of price sensitivity on where the stock is trading or was it a bit more of a mechanical decision given the blackout period?

Question: Jamie Kubik - CIBC Capital Markets - Analyst : Okay, great. That's it for me. Thank you.