CALGARY, AB, Feb. 5, 2026 /CNW/ - (TSX: ARX)(EQNX::nobreakspace)ARC Resources Ltd. ("ARC" or the "Company") today reported its fourth quarter and year-end 2025 financial and operational results as well as its year-end 2025 reserves.

CORPORATE HIGHLIGHTS

Fourth Quarter Results

• Fourth quarter production averaged a record 408,382 boe⁽¹⁾ per day (58 per cent natural gas and 42 per cent crude oil and liquids⁽²⁾), which included 118,898 barrels per day of crude oil and condensate production, the highest in ARC's 30-year history. Production per share⁽³⁾ increased 10 per cent compared to the fourth quarter of 2024.
• ARC generated funds from operations of $874 million⁽⁴⁾ ($1.52 per share⁽⁴⁾) and cash flow from operating activities of $668 million ($1.16 per share⁽⁴⁾).
  • ARC realized an average natural gas price of $3.77 per Mcf⁽⁴⁾, which is $1.43 greater than the average AECO 7A Monthly Index price.
• Free funds flow was $415 million⁽⁴⁾ ($0.72 per share⁽⁴⁾), and net income was $260 million or $0.45 per share. ARC distributed $257 million ($0.45 per share) to shareholders through the base dividend and share repurchases, and allocated the remainder to debt reduction.
  • ARC declared dividends of $120 million ($0.21 per share⁽⁴⁾) and repurchased 5.1 million common shares for $137 million under its normal course issuer bid ("NCIB").
• ARC invested $459 million in capital expenditures⁽⁴⁾ during the fourth quarter, which contributed to total capital expenditures of $1.9 billion in 2025, which was within Company guidance.
• Subsequent to December 31, 2025, ARC executed an agreement to purchase assets in the Kakwa area of Alberta for approximately $160 million. The transaction is expected to close in February 2026.
• Net debt⁽⁴⁾ decreased by $191 million compared to the third quarter of 2025. As at December 31, 2025, net debt was $2.9 billion or 0.9 times funds from operations⁽⁴⁾.

Year-end 2025 Highlight

• ARC generated record annual average production of 374,336 boe per day (59 per cent natural gas and 41 per cent crude oil and liquids), an increase of 10 per cent per share compared to 2024.
• ARC recognized funds from operations of $3.2 billion ($5.48 per share), and generated free funds flow of $1.3 billion ($2.20 per share) in 2025.
  • ARC distributed 75 per cent of free funds flow to shareholders through its base dividend and share repurchases. The remainder was allocated to debt reduction, allowing ARC to further strengthen its balance sheet.
  • ARC increased its base dividend for the fifth consecutive year. ARC's Board of Directors (the "Board") approved an 11 per cent increase to the quarterly dividend, from $0.19 to $0.21 per share ($0.84 per share, per annum).
• ARC's annual average realized natural gas price of $3.51 per Mcf was 89 per cent or $1.65 per Mcf greater than the average AECO 7A Monthly Index price. This marks the 13th consecutive year that ARC's market diversification strategy resulted in a realized natural gas price that exceeded AECO by 20 per cent or greater.
  • Natural gas curtailments at Sunrise due to low natural gas prices during the third and fourth quarters of 2025 reduced full-year average production by approximately 12,000 boe per day (approximately 70 MMcf per day). The curtailments preserved resource for periods when prices were higher, and allowed ARC to defer approximately $50 million of capital.
• In July 2025, ARC completed the acquisition of condensate-rich Montney assets in the Kakwa area of Alberta from Strathcona Resources Ltd. in an all-cash transaction valued at approximately $1.6 billion⁽⁵⁾ (the "Kakwa Acquisition").
• ARC executed an agreement for the earning and development of up to 36 new contiguous sections in the Montney with the Tsaa Dunne Za Energy Limited Partnership (EQNX::endash) a limited partnership owned by Halfway River First Nation.
• In March 2025, ARC announced a long-term sale and purchase agreement with ExxonMobil LNG Asia Pacific ("EMLAP"), an ExxonMobil affiliate, for the supply of liquefied natural gas ("LNG"). Under the agreement, EMLAP will purchase ARC's LNG offtake from the Cedar LNG Project, approximately 1.5 million tonnes per annum at international pricing. The agreement commences with commercial operations at the Cedar LNG Facility, expected in late 2028.

2025 Reserves⁽¹⁾⁽⁶⁾

• ARC reported record reserves across all categories in 2025. Proved developed producing ("PDP") and total proved plus probable ("2P") reserves increased by 15 per cent and nine per cent, respectively, compared to 2024.
  • For the 18th consecutive year, ARC replaced greater than 120 per cent of 2P reserves.
  • For the 20th consecutive year, ARC reported positive technical revisions on a total proved ("1P") and 2P basis.
• ARC's before-tax net present value ("NPV") of 2P reserves, discounted at 10 per cent was $38.71 per share⁽⁴⁾ at December 31, 2025. The 2P NPV considers the development of 23 per cent of ARC's internally identified inventory⁽⁷⁾, providing a long runway for future development and reserve growth.
• ARC's reserve life index ("RLI") increased across all three categories. ARC's RLI increased to 4.8 years on a PDP basis, 9.6 years on a 1P, and 15.1 years on a 2P basis.

ARC's consolidated financial statements and notes thereto (the "financial statements") and Management's Discussion and Analysis ("MD&A") as at and for the three months and year ended December 31, 2025, are available on ARC's website at www.arcresources.com and under ARC's SEDAR+ profile at www.sedarplus.ca. The disclosure under the section entitled "Non-GAAP and Other Financial Measures" in ARC's MD&A as at and for the three months and year ended December 31, 2025 (the "2025 Annual MD&A") is incorporated by reference into this news release.

FINANCIAL AND OPERATIONAL RESULTS

OUTLOOK

ARC remains committed to delivering on its strategy to deliver sustainable free funds flow per share growth to provide shareholders with a durable and attractive return. Consistent with previous years, the strategy is underpinned by its longstanding principles of safety, capital discipline, and preserving a strong balance sheet.

Operations Update

Attachie

At over 360 net sections, Attachie is a large condensate-rich asset and remains in the early stages of development. In 2025, its first year of operations, ARC focused on capturing and applying learnings to deliver repeatable well performance and improved capital efficiencies to ensure long-term profitability at the asset.

The early production results from the most recent Upper Montney pads at Attachie, brought on stream in late 2025 and early 2026, have been variable and below expectations. In response, ARC has adjusted its development schedule to further evaluate well performance and determine an appropriate development plan for Attachie going forward. As a result, ARC is removing asset-level production guidance at Attachie for 2026.

ARC remains confident in the longâ?(EQNX::leftsinglequotation)term potential of the resource at Attachie. The Company will continue to advance the asset in a disciplined manner, allocating capital to further refine well design and apply operational learnings.

2026 Guidance

Corporate guidance for 2026 remains unchanged. Asset-level production contribution and capital allocation may shift throughout the year as the development plan for Attachie evolves.

• Average annual production of between 405,000 and 420,000 boe per day (61 per cent natural gas and 39 per cent crude oil and liquids).
• Planned capital expenditures of between $1.8 to $1.9 billion^(1).
• Based on the current forward curve and Company guidance, ARC estimates 2026 free funds flow of approximately $1.2 billion⁽²⁾, essentially all of which is earmarked for shareholder returns via the base dividend and share repurchases.

ARC's 2026 corporate guidance is based on various commodity price scenarios and economic conditions. Production guidance does not include any assumption for possible natural gas production curtailments due to low natural gas prices. Certain guidance estimates may fluctuate with commodity price changes and regulatory changes. ARC's guidance provides readers with the information relevant to Management's expectations for financial and operational results for 2026.

ARC's 2025 and 2026 annual guidance and a review of 2025 actual results are outlined below:

FINANCIAL AND OPERATIONAL RESULTS

Production

Fourth Quarter 2025

• ARC generated record average production during the fourth quarter of 408,382 boe per day (58 per cent natural gas and 42 per cent crude oil and liquids). Production increased seven per cent compared to the fourth quarter of 2024 and 10 per cent on a per share basis.
  • The increase year-over-year was driven primarily by the Kakwa Acquisition. During the fourth quarter, production at Kakwa averaged 215,073 boe per day (42 per cent natural gas and 58 per cent crude oil and liquids), which included 124,505 barrels per day of condensate and natural gas liquids.
  • Attachie production averaged 28,286 boe per day during the fourth quarter (41 per cent natural gas and 59 per cent crude oil and liquids), and included 13,182 barrels per day of condensate.
  • Natural gas production at Sunrise was restored in the fourth quarter when AECO natural gas prices recovered.

Full-Year 2025

• Full-year production averaged 374,336 boe per day (59 per cent natural gas and 41 per cent crude oil and liquids), which was in line with Company guidance.
  • This included record average crude oil and condensate production of 106,984 barrels per day, driven primarily by Attachie and the Kakwa Acquisition that closed on July 2, 2025.
  • The natural gas production curtailments at Sunrise that occurred from July through October reduced full-year average production by approximately 12,000 boe per day. This allowed ARC to defer approximately $50 million of capital expenditures earmarked to sustain production at Sunrise.

Funds from Operations, Cash Flow from Operating Activities, and Free Funds Flow

Fourth Quarter 2025

• ARC generated $874 million ($1.52 per share) of funds from operations in the fourth quarter. This represents a 13 per cent increase ($104 million or $0.22 per share) compared to the same quarter of the prior year, driven primarily by higher production at Kakwa and Attachie.
• ARC reported free funds flow of $415 million ($0.72 per share) in the fourth quarter.

Full-Year 2025

• In 2025, ARC generated funds from operations of $3.2 billion ($5.48 per share) and cash from operating activities of $3.1 billion ($5.31 per share).
• Free funds flow totalled $1.3 billion ($2.20 per share) for the year.

The following table details the change in funds from operations for the fourth quarter of 2025 relative to the third quarter of 2025.

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