ARC Energy Trust announces distribution increase, operational update and revised guidance



    CALGARY, June 26 /CNW/ - (AET.UN and ARX - TSX) ARC Energy Trust (the
"Trust" or "ARC") announced today that in light of the continued strong
commodity price environment and strong operational performance achieved
year-to-date, the Board of Directors has approved an increase in the top-up
distribution from $0.04 per unit to $0.08 per unit per month. Including our
base distribution of $0.20, this increases the total monthly distribution to
$0.28 per unit. This distribution payment will be effective beginning with the
August 15, 2008 payment. The "top-up" distribution will be reviewed on an
ongoing basis in the context of commodity prices and other factors.
    In addition to the distribution increase, the board also approved an
increase in the 2008 capital budget to $550 million. A substantial portion of
the 2008 budget is targeted at delineating ARC's extensive land position in
the Montney play in northeast British Columbia and the engineering design of a
new ARC operated gas plant proposed for the Dawson area. Upon completion of
the gas plant in 2011, ARC expects that production will increase to
approximately 70,000 boe per day, up from 64,000 boe per day targeted for
2008.

    Operational Update

    With spring break-up behind us, ARC has begun its most active summer
drilling program ever with 11 rigs currently under contract. Four of the rigs
are drilling Montney wells in and around the main Dawson field, including a
horizontal well at Pouce Coupe in Alberta, where ARC has 20 net sections of
Montney rights. In Saskatchewan, ARC drilled its first Bakken well at Lost
Horse Hills. This well has recently been put on production at 200 barrels of
oil per day. ARC has two rigs working in Saskatchewan, one of which is working
on ARC's eight well Bakken program.
    ARC's four well horizontal drilling program on the main Dawson field has
been completed. The first well has been tested at seven mmcf per day while the
remaining three wells will be completed and brought on production during the
third and fourth quarters. Production from the field remains steady at
approximately 45 mmcf per day. In addition, the Trust has drilled two vertical
delineation wells at Dawson, completed testing on the Sunrise 9-13 discovery
well and shot a 3-D seismic program at Sunrise.
    The Trust has expanded its land base in the Montney through pooling with
other companies, purchases at crown land sales and purchases from other
producers. During the first half of 2008, ARC has spent $78.2 million to
acquire 10,230 gross (8,550 net) hectares of land in the Montney play in
British Columbia, bringing our total undeveloped land to 141 gross sections
(120 net), up from 96 gross (87 net) at December 31, 2007. In addition, the
Trust has an average working interest of 98.6 per cent in 44 sections that
have recoverable reserves assigned to them at year-end 2007.

    Map missing - to see map please go to www.arcenergytrust.com

    ARC has applied for approval to construct a 10 mmcf per day gas line from
West Dawson field to Fourth Creek in Alberta. Assuming that approvals are
received early in the third quarter, ARC would expect to have the new line on
stream by late fourth quarter 2008. ARC's Board of Directors has also approved
the construction of an ARC operated gas plant in the Dawson area for the
processing of gas from the Dawson and West Dawson fields. Engineering design
is expected to start this summer with the first 25 mmcf per day targeted for
startup in early 2010 and production of up to 60 mmcf per day targeted for
early 2011. This is incremental to our existing production of approximately
45 mmcf per day. In the absence of acquisitions or dispositions, this growth
in production in the Dawson and West Dawson areas should take ARC's total
production to approximately 70,000 boe per day in 2011.
    John Dielwart, ARC's President and CEO, said, "This new gas plant is a
great next step in unlocking the enormous potential we see in our BC lands and
creating significant value for our investors. Our expanded land base provides
us with the opportunity to further increase production from this area should
our efforts to prove additional gas reserves at Sundown, Sunrise, Sunset
Saturn and Monias be successful."

    2008 Capital Expenditures Increased:

    In recognition of the spending on land acquisitions during the first half
of 2008 and additional projects identified by our team, the Board of Directors
has approved an increase in the 2008 capital expenditures to $550 million.
Total expenditures in the greater Dawson area account for $200 million or
36 per cent of 2008 capital expenditures.
    The 2008 Revised Guidance provides unitholders with information as to
management's expectations for results of operations for 2008. Readers are
cautioned that the 2008 Revised Guidance may not be appropriate for other
purposes. ARC has announced a $550 million capital expenditure program for
2008 comprising a robust drilling and development program on its diverse asset
base, funding of EOR projects and an allocation of funds to purchase
undeveloped lands.

    Revised Capital Expenditures Information:

    The budgeted capital expenditures for 2008, by type are:

    
    Capital Expenditures                                               2008
    ($ millions)                         2006           2007      (Estimate)

    Development - Drilling                229            213            241
    Development - Facilities               28             23             28
    Land                                   32             78             96
    Exploration - Drilling                 17             22             58
    Seismic                                 9              6             20
    Natural Gas from Coal                  11             12             26
    Enhanced Oil Recovery                   4              5             17
    Maintenance                            14             19             28
    Optimization                           11             10             18
    Corporate                              10             10             18
                                     ---------      ---------      ---------
    Total capital expenditures            365            398            550
    

    Second Quarter Production Volumes and Updated Guidance

    With most of the second quarter behind us, including the successful
completion of the maintenance work at ARC's Redwater oil field, ARC expects
second quarter production to average approximately 63,000 boe per day. This
should result in full year production of approximately 64,000 boe per day,
which when combined with current strong commodity prices, has resulted in ARC
lowering the guidance on interest expense to $1.50 per boe. The distribution
increase is expected to result in a modest increase in ARC's G&A expense as
ARC's long-term incentive program (LTIP) is tied to unit performance and
distributions.

    
    -------------------------------------------------------------------------
                                                   May 2008     2008 Revised
                                                   Guidance         Guidance
    -------------------------------------------------------------------------
    Production (boe/d)                               63,000           64,000
    -------------------------------------------------------------------------
    Expenses ($/boe):
      Operating costs                                 10.20            10.20
      Transportation                                   0.80             0.80
      G&A expenses(1)                                  3.00             3.15
      Interest                                         1.90             1.50
    Capital expenditures ($ millions)(2)                470              550
    Weighted average trust units and
     units issuable (millions)                          216              216
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Cash G&A expenses for the first quarter were $1.52 per boe. The
        components of the $3.15 per boe G&A revised guidance for the full
        year are as follows: cash G&A - $1.71 per boe; cash component of
        LTIP - $1.00 per boe; non-cash LTIP component - $0.44 per boe.
    (2) 2008 Capital Expenditure Guidance has been revised to reflect
        additional monies allocated to land expenditures and resource play
        development in the Dawson area.
    

    This press release contains forward-looking statements as to the Trust's
internal projections, expectations or beliefs relating to future events or
future performance, including the Trust's Detailed Revised Guidance for 2008
and the amount and type of 2008 budgeted capital expenditures set forth
herein. In some cases, forward-looking statements can be identified by
terminology such as "may", "will", "should", "expects", "projects", "plans",
"anticipates" and similar expressions. These statements represent management's
expectations or beliefs concerning, among other things, future capital
expenditures and future exploration, development and operating results and
various components thereof or the economic performance of ARC Energy Trust
("ARC" or "the Trust"). The projections, estimates and beliefs contained in
such forward-looking statements are based on management's assumptions relating
to the production performance of ARC's oil and gas assets, the cost and
competition for services throughout the oil and gas industry in 2008 and 2009
and the continuation of the current regulatory and tax regime in Canada and
future exploration and development results, and necessarily involve known and
unknown risks and uncertainties, including the business risks discussed in
managements discussion and analysis and ARC's annual information form, which
may cause actual performance and financial results in future periods to differ
materially from any projections of future performance or results expressed or
implied by such forward-looking statements. Accordingly, readers are cautioned
that events or circumstances could cause results to differ materially from
those predicted. The Trust does not undertake to update any forward looking
information in this document whether as to new information, future events or
otherwise except as required by securities rules and regulations.

    ARC Energy Trust is one of Canada's largest conventional oil and gas
royalty trusts with an enterprise value of approximately $7.5 billion. The
Trust expects 2008 production of approximately 64,000 barrels of oil
equivalent per day from five core areas in western Canada. ARC Energy Trust
trades on the TSX under the symbol AET.UN.

    Note: Barrels of oil equivalent (BOEs) may be misleading, particularly if
used in isolation. In accordance with NI 51-101, a BOE conversion ratio for
natural gas of 6 Mcf:1bbl has been used, which is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead.

    ARC RE

SOURCES LTD. John P. Dielwart, President and Chief Executive Officer

For further information:

For further information: Investor Relations, E-mail:
ir@arcresources.com, Telephone: (403) 503-8600, Fax: (403) 509-6417, Toll Free
1-888-272-4900, ARC Resources Ltd., 2100, 440 - 2nd Avenue S.W., Calgary, AB,
T2P 5E9, www.arcenergytrust.com


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