Strategy
Portfolio Companies
ARC invests at an early stage in growing energy companies with high quality management teams.
Areas of Investment
ARC Financial Corp.'s core focus is the upstream segment of the Canadian oil and gas industry.
Within the upstream oil and gas sector, we invest in growth strategies to explore, acquire and develop crude oil and natural gas reserves and production. We are also active investors in companies that provide vital services and equipment to the upstream sector.
Typically our investment is at the formative or early stage of the value creation process to capture and develop a portfolio of opportunities that offer the potential for multiple returns on capital.
ARC is active in the following areas of investment:
Emerging Resource Plays
Emerging resource plays are providing tremendous opportunities for growth. This potential is being unlocked by the application of innovative new drilling and completion technologies, most notably horizontal drilling and multi-stage fracturing. Our investment focus in this area is to finance the capture of opportunity and initial development activities. A range of strategies is used, from the purchase of Crown lands, to joint ventures or farm-ins, to the acquisition of conventional assets that have under-recognized resource potential. Canada has a very active transaction market for the sophisticated buyer to acquire assets at attractive valuations, and that provide under-recognized upside such as resource play potential or a substantial inventory of probable reserves.
Oil Sands
Canada’s oil sands resource base is enormous and the focus of significant investment activity. We estimate that roughly $15 billion per year will be invested over the next number of years to develop this resource. We have well established relationships from previous investments in this area and are focused on in-situ project development versus mining. In-situ projects are more modular in scope, allowing for staged investment, and have a much smaller environmental footprint than larger scale mining projects.
Oilfield Services
Canada’s oilfield service industry is recognized as a global leader in technical innovation. Hundreds of companies of all sizes are providing services and equipment to an upstream industry that invests approximately $50 billion annually in oil and gas exploration and development activities (including the oil sands). Our focus is to identify and finance those companies that are differentiated by technology and/or that have exposure to growing areas of the business that are capacity constrained. Examples of such opportunities are the advancing technologies in horizontal drilling and multi-stage fracturing that are driving the development of resource plays.