ARC Resources Ltd.

Good morning, ladies and gentlemen, and welcome to the AHRQ Resources Limited Q4 2024 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. During this time, should you wish to ask a question, please press star and 1 on your touch-tone phone. And if at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Friday, February 7, 2025. And I would now like to hand the call over to your first speaker today, Dale Luko. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for our fourth quarter earnings conference call. Joining me today are Terry Anderson, President and Chief Executive Officer, Chris Bibby, Chief Financial Officer, Armin Jahangiri, Chief Operating Officer, Lara Conrad, Chief Development Officer, and Ryan Barrett, Senior Vice President, Marketing. Before I turn it over to Terry and Chris to take you through our fourth quarter results in 2024 reserves, I'll remind everyone that this conference call includes forward-looking statements and non-GAAP and other financial measures with the associated risks outlined in the earnings release and our MD&A. All dollar amounts disclosed today are in Canadian dollars unless otherwise stated. Finally, the press release, financial statements, and MD&A are available on our website, as well as CDAR+. Following our prepared remarks, we'll open the line to questions. With that, I'll turn it over to our President and CEO, Terry Anderson. Terry, please go ahead.

Thanks, Dale. Good morning, everyone, and thank you for joining us today. I'm excited to take you through our fourth quarter results and 2024 reserves. and provide some insight into how things are shaping up in 2025. 2024 can be summarized as a milestone year for ARC, and one that was defined by operational excellence, capital discipline, and long-term profitability. I'll begin with our fourth quarter results. The quarter was headlined by production of 382,000 BOE a day, the highest in our 29-year history. This included record condensate and light oil production, of approximately 105,000 barrels per day, which represents a 20% increase year over year. The increase was primarily driven by two material events, production contribution from Hitachi and strong results at Kakwa. At Kakwa, production averaged approximately 195,000 BUE per day during the fourth quarter, which included greater than 100,000 barrels per day of consate and natural gas liquids. The growth in CONSATE is a result of focusing our development in areas with higher CONSATE to gas ratios, which we plan to continue in 2025. In addition, we continue to optimize our completion design, resulting in more effective frack placement and ultimately better capital efficiencies. Moving on to ATACHI, it's been four months since we began commissioning phase one last October. And overall, we are on track to achieve what we set out to do in 2025. The facility is operating as anticipated, with the majority of startup wells now on production. Production continued to increase in December, averaging about 29,000 BUE per day. This included 18,000 barrels per day of liquids, of which 14,000 barrels per day was condensate. Production currently exceeds 30,000 BUE per day. and we are on track to deliver average production in the first quarter between 30,000 to 35,000 BOE a day, 60% CONSATE and NGLs. For 2025, we expect full-year average production of approximately 37,500 BOE per day. I'd like to thank our staff and service providers for their support in the safe and successful construction and startup of Hitachi. Phase one is the first milestone in delivering on our long-term plan, and your efforts have ensured we are right on track. Our 2024 results were achieved executing a $1.85 billion capital program, which represented one of our largest and most efficient development programs. We delivered annual free funds flow of $627 million, which was all returned to shareholders through our base dividend and share buybacks. With the upfront capital associated with phase one behind us, we anticipate a material increase in free cash flow in 2025. At current strip, we expect to generate free cash flow of approximately $1.8 billion. Looking back, our low cost structure and market diversification once again provided a material competitive advantage in achieving high margins and being profitable through cycles. Our operating costs in the quarter were $4.20 per BOE. This low-cost structure is a result of owning and operating our infrastructure. And despite low natural gas prices in Western Canada, ARC realized an average price in 2024 of $2.37 per MCF, which is 65% greater than the ACO benchmark. This was another year of incredible activity and I'm pleased with our operational and financial results. It's also worth noting that these accomplishments were achieved while maintaining strong safety performance, which will always be our top priority. Finally, before I turn it over to Chris, I'll speak to reserves. We delivered another year of consistent reserve growth, positive technical revisions, and low finding and development costs. This is a track record we have established over the years and what you should expect from ARC going forward, validating the inventory depth and reaffirming the profitability of our Montney assets. Three notable takeaways from this year's report. First, it was another year of record reserves across all categories, PDP, approved, and 2P. PDP reserves and 2P reserves grew by 5%. At Atachi, ARC booked an additional 50 million BOEs of 2P reserves, bringing the total at Atachi to 174 million BOEs. This represents just 9% of ARC's internal inventory estimate at Atachi, providing a runway for long-term reserve growth. As well, we received positive technical revisions across all categories. This was due to relative outperformance across several assets, most notably at CACLA. Positive technical revisions and extensions represented a 28% increase to 2023 PDP reserves. CACLA technical revisions were noteworthy, representing 41 million barrels of oil equivalent on a total approved basis. Second, ARCs before tax NPV of 2P reserves discounted at 10%, increased to $41 per share, an increase of 6% per share. For perspective, that value is based on the development of just 23% of ARP's internally identified inventory. As always, the pace of capital investment and development underpinning ARP's reserves report aligns with the long-term plan we provided to our investors in 2023. Finally, PDP F&D costs of $11.87 per BOE, including future development capital, equated to a 1.9 times recycle ratio and a 2P recycle ratio of 2.4 times based on a 2P F&D of $9.19 per BOE. With that, I'll turn it over to Chris.