Montney Shale producer Arc Resources Ltd. sees inflation and continued supply chain snarls ballooning its costs for the rest of the year, leading it to raise its capital budget by 16.6%.

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Calgary-based Arc is now forecasting capital spending of $1.35-$1.45 billion, up from an initial plan of $1.15-$1.25 billion.

Management said the upward revision primarily reflects “realized and anticipated inflation,” along with additional water infrastructure at the Kakwa gas and condensate play. Arc also will need “funds to manage longer supply chain related lead times that will support 2023 activity,” the firm said.

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