ARC’s year-to-date production for 2013 is within the guidance range and reflects strong operating performance in many key areas.
While second quarter production volumes showed a moderate decrease from the first quarter due to the delay of the tie-in of new wells and wet spring weather, third quarter volumes increased as many areas returned to full production and new wells came on-stream, more than offsetting approximately 1,700 boe per day of production that was sold in August. Fourth quarter volumes are expected to continue to increase relative to the third quarter from new production associated with ARC's 2013 capital development program. ARC has amended its 2013 production guidance to increase the low end of the guidance range to 94,000 boe per day.
Operating expenses were just above the guidance range in the first nine months of 2013, due mainly to higher than budgeted electricity rates as well as additional maintenance activity throughout the second and third quarters. Transportation expense has also exceeded guidance year-to-date as ARC has incurred additional trucking and pipeline charges throughout the year. G&A expenses exceeded guidance for the first nine months of 2013 as the rise in ARC's share price resulted in increased costs under ARC's long-term incentive plans. G&A expenses before any impact of ARC's long-term incentive plans fell below the guidance range. Depending on ARC's share price during the fourth quarter of 2013, G&A associated with ARC's long-term incentive plans may continue to exceed the current guidance range.During the first nine months of 2013, ARC recorded current taxes of $22.7 million. This amount is less than what was initially anticipated, due in part to the recognition of certain investment tax credits in filing its 2012 income tax return and to be recognized in its 2013 income tax return.
Offsetting these reductions, in 2013, ARC has changed the year-end of its wholly-owned partnership to align with its corporate year-end and as a result will be recognizing income tax in 2013 for partnership income that had previously been deferred to the next year. 2013 current income tax is expected to range between $25 and $35 million.
ARC incurred $663 million of capital expenditures, including land purchases, during the first nine months of 2013, following its strategy of selecting and executing projects that provide the greatest expected return on investment. ARC plans to execute an $860 million capital program in 2013, focused primarily on oil and liquids-rich gas development and infrastructure spending to facilitate future growth.
ARC's original guidance for its 2013 capital spending was $830 million but this has been increased as a result of the acceleration of certain capital projects originally planned for 2014.The 2013 guidance provides shareholders with information on management’s expectations for results of operations. Readers are cautioned that the 2013 guidance may not be appropriate for other purposes.
