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( ARC ARC RESOURCES LTD . REPORTS SECOND QUARTER 2021 RESULTS AND ANNOUNCES DIVIDEND INCREASE OF 10 PER CENT RESOURCES LTD . NEWS RELEASE Calgary , July 29 , 2021 ( ARX - TSX ) ARC Resources Ltd. ( " ARC " or the " Company " ) today reported its second quarter 2021 financial and operational results . ● SECOND QUARTER 2021 HIGHLIGHTS ARC successfully closed the strategic Montney combination with Seven Generations Energy Ltd. ( " Seven Generations " ) on April 6 , 2021 ( the " Business Combination " ) , to become the largest pure - play Montney producer , and remains well on track to deliver annual synergies of $ 160 million for 2022 . ARC's board of directors ( the " Board " ) has approved a 10 per cent increase to ARC's quarterly dividend , from $ 0.06 per share to $ 0.066 per share . The dividend increase is effective for ARC's third quarter 2021 dividend , payable on October 15 , 2021 to shareholders of record on September 30 , 2021 , and reflects ARC's conviction in its assets , increased profitability , and the progress made to - date in delivering on the $ 160 million of annual synergies . ARC generated funds from operations ( ¹ ) of $ 542.5 million ( $ 0.75 per share ) and free funds flow ( ² ) of $ 249.7 million ( $ 0.35 per share ) . • Free funds flow was allocated to debt reduction and declaring dividends of $ 43.5 million ( $ 0.06 per share ) . • Net debt excluding lease obligations ( ¹ ) outstanding was reduced by $ 270.8 million or 11 per cent and was 1.3 times annualized funds from operations at period end . ARC delivered average daily production of 335,701 boe ( ³ ) per day ( 60 per cent natural gas and 40 per cent crude oil and liquids ) ( 4 ) , which was above guidance . Production in the period was impacted by planned maintenance and turnaround activities across the Company's asset base . ARC safely executed its active capital program , drilling 38 wells and completing 40 wells . Capital investments totalled $ 292.8 million and included bringing the Sunrise facilities expansion on - stream in May 2021 . • ARC disposed of its Pembina assets in the second quarter of 2021. Production guidance during the second half of 2021 is unchanged at approximately 340,000 boe per day , while operating expense guidance and crude oil production guidance have been lowered to reflect the disposition . Production guidance for condensate , natural gas , and NGLs remains unchanged . A video update from ARC's senior management team and an updated investor presentation are available on ARC's website at www.arcresources.com . ARC's unaudited condensed interim consolidated financial statements and notes ( the " financial statements " ) and Management's Discussion and Analysis ( " MD & A " ) as at and for the three and six months ended June 30 , 2021 , are available on ARC's website at www.arcresources.com and under ARC's SEDAR profile at www.sedar.com . Notes : ( 1 ) Refer to Note 15 " Capital Management " in ARC's financial statements and to the sections entitled " Funds from Operations " and " Capitalization , Financial Resources and Liquidity " in ARC's MD & A as at and for the three and six months ended June 30 , 2021 , available on ARC's website at www.arcresources.com and on SEDAR at www.sedar.com . ( 2 ) Non - GAAP measure that does not have any standardized meaning under International Financial Reporting Standards ( " IFRS " ) and therefore may not be comparable to similar measures presented by other entities . Refer to the section entitled " Non - GAAP Measures " in ARC's MD & A for the three and six months ended June 30 , 2021 , available on ARC's website at www.arcresources.com and on SEDAR at www.sedar.com . ( 3 ) ARC has adopted the standard six thousand cubic feet ( " Mcf " ) to one barrel ( " bbl " ) of crude oil ratio when converting natural gas to barrels of oil equivalent ( " boe " ) . Boe may be misleading , particularly if used in isolation . A boe conversion ratio of 6 Mcf : 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead . Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different than the energy equivalency of the 6 : 1 conversion ratio , utilizing the 6 : 1 conversion ratio may be misleading as an indication of value . ( 4 ) Throughout this news release , crude oil ( " crude oil " ) refers to light , medium , and heavy crude oil product types as defined by National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ( " NI 51-101 " ) . Condensate is a natural gas liquid as defined by NI 51-101 . Throughout this news release , natural gas liquids ( " NGLs " ) comprise all natural gas liquids as defined by NI 51-101 other than condensate , which is disclosed separately . Throughout this news release , crude oil and liquids ( " crude oil and liquids " ) refers to crude oil , condensate , and NGLs .