ARC Resources Ltd. Canaccord Genuity Global Resource Conference October 18, 2012
CORPORATE OVERVIEW Production (Q2 2012) 93,997 boed Liquids 36,125 boed Natural gas 347 mmcfd Crude Oil Reserves (2P Gross) 572 mmboe NE BC/ NW AB Liquids-rich Gas 17 year RLI (1) Dry Gas NORTH AB Current monthly dividend 0.10…
2012 CAPITAL PROGRAM FOCUSED ON OIL AND LIQUIDS 600 million capital program (150 gross operated wells) with majority of spending in oil and liquids-rich gas plays NE BC - 155MM 10 gross operated wells NORTHERN AB - 165MM 90%…
2012 FOCUS ON OIL AND LIQUIDS Oil and liquids comprised 38% of second quarter 2012 production while contributing 79% of second quarter revenue Drilled 77 gross operated wells in first half of 2012 (99% oil and liquids-rich) Grew…
VALUE PROPOSITION We believe that top performing companies all have the following attributes: Great assets Operational excellence Capital discipline Management that delivers results At ARC our focus since inception has been on…
PRODUCTION GROWTH Forecast Forecast Forecast
INCOME AND GROWTH ARC HAS DELIVERED BOTH ARC has a 16 year history of risk managed value creation - Provided a 17.9% annual total return since inception - Paid out 4.5 billion in total dividends - 28.28/share - Grown absolute…
Corporate Strategy Contained in the Strategy section is forward-looking information. The reader is cautioned that assumptions used in the preparations of such information, particularly those pertaining to dividends, production levels,…
RISK MANAGED VALUE CREATION Understand our Advantaged Position Leverage our Advantaged Position Make time to Think Strategically Financial Operational Flexibility Excellence RISK MANAGED VALUE CREATION High Quality, Top…
STRATEGIC OVERVIEW SUMMARY ARCs strategy has delivered exceptional results to date We will continue to provide income and profitable growth to our investors Where do we go from here Continued focus on meaningful oil and gas…
Asset Overview
ASSET OVERVIEW ARCs key assets with the greatest value creation opportunities and highest future reserves contributions are: Ante Creek oil resource play Parkland/Tower/Attachie/Septimus liquids-rich gas resource play Pembina…
Pembina Revitalizing a Mature Oil Field
PEMBINA ASSET DETAILS Net production (boe/d) Q2 2012 11,500 Cardium production 80% Production split % (liquids/gas) 75%/25% Land (Cardium net sections) 132 Working Interest 78% Reserves (2P mmboe) Cardium 41.6 Reserve Life…
PEMBINA OIL AND LIQUIDS GROWTH ARC HAS GROWN LIQUIDS PRODUCTION IN THIS MATURE FIELD Pembina - 23% Increase in Oil & Liquids Production since 2006 14,000 12,000 10,000 8,000 Boe/d Q2 2012 - 8,500 boe/d 6,000 Q1 2006 -…
PEMBINA CARDIUM AREA IP AVERAGE (3 MONTH RATE) LOW CARDIUM DC&T COSTS AT 2.3 MM/WELL 600.0 Cardium Area IP Average (3 Month Rate)* 500.0 400.0 ARC Wells IP3 boe/d 300.0 Other Wells Industry Median Well 157 boe/d ARC…
PEMBINA HORIZONTAL WELLS DEVELOPMENT ECONOMICS Type Curve IP (1mo) boe/d 237 IP (12mo) boe/d 94 EUR mboe 167 Type Curve F&D (/boe) 13.77 Economics - Type Curve at C85/bbl Capital Costs (k) 4/GJ 3/GJ 2/GJ Drilling &…
Ante Creek A Montney Oil Success Story
ANTE CREEK ASSET DETAILS Net production (boe/d) Q2 2012 10,500 Liquids (bbls/d) 5,200 Gas (mmcf/d) 33 Production split % (liquids/gas) 50/50 Land (Montney net sections) 263 Working Interest 99% Reserves (2P mmboe) 47.2…
ANTE CREEK HZ WELLS ANTE CREEK - KAYBOB ARCS HZ ANTE CREEK WELLS HAVE OUTPERFORMED 1200 30 Day Average Daily IP Rate (boe/d) 1000 ARC Gas ARC Liquids Others Gas 800 Others Liquids 600 Boe/d ARC Median Well 377 boe/d…
ANTE CREEK GROWING OIL AND LIQUIDS EXPANDED CAPACITY WILL FACILITATE GROWTH IN 2012/2013 Ante Creek 60% Increase in Liquids Production during 2012 14,000 12,000 gas oil & liquids 10,000 60% growth in Q4 2012 liquids production…
ANTE CREEK DEVELOPMENT ECONOMICS 450 Type Curve 400 Production Rate (BOE/d) 350 IP (1mo) boe/d 385 300 IP (12mo) boe/d 235 250 200 EUR mboe 265 150 100 50 Type Curve 0 0 3 6 9 12 15 18 21 24 27 30 33 36 Months F&D…
British Columbia Montney Gas and Liquids
NE B.C. MONTNEY VAST RESOURCE BASE We engaged GLJ to provide a resources evaluation of our properties at Dawson, Parkland, Tower, Sunrise/Sunset, Attachie, Septimus, Sundown and Blueberry located in northeastern British Columbia and at…
MONTNEY LANDS WORLD CLASS RESOURCE PROGRESS/ NE BC Montney lands are a major PETRONAS growth engine. Kahta/Lily Significant opportunity to grow liquids production. TALISMAN/ Attachie SASOL Total BC Montney Q2 production of…
NE B.C. MONTNEY RESOURCE POTENTIAL An Independent Resources Evaluation conducted by GLJ effective December 31, 2011 estimates the TPIIP to be 39.6 Tcf using a 3% porosity cut-off and 50.4 Tcf using no cut-off (comparable to US shale…
NE B.C. MONTNEY RESERVES AND RESOURCES GLJs Best Estimate of the ECR is 4.1 Tcf of gas and 101 Mmbbls Significant natural gas liquids (NGL) resource exists in the Montney in the Attachie, Parkland, Septimus and Tower areas GLJs Best…
NE B.C. MONTNEY RESERVES AND RESOURCES Very early stage in reserve booking cycle: 2P Reserves (1.9 Tcf) plus Cum Prod only 5.3% of TPIIP at 3% cut-off (4.2% at 0% cut-off). Best Estimate ECR estimated to be 4.1 Tcf resulting in…
ARC RESOURCES TOP MONTNEY DRILLER AND PRODUCER ARC Resources has been one of the top tier drillers and producers in the Montney since completion of its first horizontal well in 2005 - Success of this well led to the recognition that…
ARC RESOURCES MONTNEY GAS WELLS EXCEEDING EXPECTATIONS ARCS MONTNEY GAS WELLS HAVE THE BEST INITIAL PRODUCTIVITY
Parkland/Tower Liquids Rich Gas
PARKLAND/TOWER EVALUATING POTENTIAL AND DEVELOPING EXISTING LANDS Parkland Tower Net production (boe/d) 8,100 330 Tower Liquids (bbls/d) 1,100 150 Gas (mmcf/d) 42 1.0 Land (net sections) 23 56 Working Interest 84% 90%…
PARKLAND CAN A SINGLE WELL DRAIN THE FULL VERTICAL SECTION At Parkland, the Upper Montney is considerably thicker than at Dawson. We believe the lower-most sands are not contributing to production a horizontal well has been drilled…
PARKLAND DEVELOPMENT ECONOMICS 6,000 Type Curve 5,000 IP (1mo) MMcf/d 5.0 4,000 IP (12mo) MMcf/d 2.6 Gas Rate mcf/d 3,000 EUR Bcf 4.8 2,000 1,000 Type Curve 0 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36…
Attachie New Opportunity Undefined Potential
ATTACHIE NEW OPPORTUNITY UNDEFINED POTENTIAL Prospective land base of 117 sections ARC has drilled three Hz wells to date: The 4-20 well tested at 10.7 mmcfd and 350 bbls per day of free liquids with 1,300 psia flowing pressure…
Dawson
DAWSON ASSET DETAILS Net production (boe/d) Q2 2012 28,000 Liquids (bbls/d) 700 Gas (mmcf/d) 163 45 mmcf/d Compressor Production split % (liquids/gas) 97% gas Station 120 mmcf/d Land (Montney net sections) 130 Gas Plant…
MONTNEY HORIZONTAL WELLS 30 DAY HZ IP RATES GLACIER - TOWN ARCS DAWSON/PARKLAND WELLS HAVE EXCEEDED EXPECTATIONS 14,000 12,000 10,000 Production Rate (mcf/d) ARC Others 8,000 ARC P50 5.2 Mmcf/d 6,000 Other Wells P50…
DAWSON DEVELOPMENT ECONOMICS Type Curve IP (1mo) MMcf/d 5.0 6,000 IP (12mo) MMcf/d 5,000 4.2 Gas Rate (Mcf/d) 4,000 EUR (Bcf) 6.2 3,000 2,000 1,000 Type Curve 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21…
Sunrise/Sunset/Sundown
SUNRISE/SUNSET/SUNDOWN ASSET DETAILS Net production (boe/d) Q2 2012 2,500 Attachie Production split % (liquids/gas) 100% gas Land (Montney net sections) 52 Working Interest 76% Tower Septimus Reserves (2P mmboe) 82.8 Parkland…
SUNRISE/SUNSET DEVELOPMENT ECONOMICS 7,000 Type Curve 6,000 IP (1mo) MMcf/d 6.0 5,000 Gas Rate mcf/d IP (12mo) Mcf/d 2.8 4,000 EUR Bcf 7.0 3,000 2,000 1,000 Type Curve 0 2 4 6 8 10 12 14 16 18 20 22 24 Months F&D…
Summary
WHY INVEST IN ARC RESOURCES ARC is a top-tier oil and natural gas producer focused on Risk Managed Value Creation Extensive land position in top quality resource plays provides significant growth opportunity. Significant near-term oil…
PRODUCTION GROWTH Forecast Forecast Forecast
Appendix
2012 FINANCIAL AND OPERATIONAL PERFORMANCE Q2 2012 YTD 2012 (CDN millions, except per share and per boe amounts) 2012 2011 2012 2011 Production (boe/d) 93,997 82,367 94,484 78,147 Gas 62% 63% 62% 60% Liquids 38% 37% 38% 40% Revenue…
ACCESS TO CAPITAL DEBT Debt raised from three different sources: 1. Bank Credit Facility - 1 billion plus 25 million overdraft facility, 12 banks under facility 484 million drawn under credit facility as at June 30, 2012 was repaid in…
DEBT MATURITIES SPREAD OVER TIME ARCs long-term notes are structured so that they mature over a number of years; this reduces refinancing risk ARCs unused credit capacity of 1 billion (after debt and equity proceeds) allows for…
HEDGE POSITIONS AS OF JULY 31, 2012 Summary of Hedge Positions as at July 31, 2012 (1)(2) Jul Oct 2012 Nov Dec 2012 Jul Dec 2012 2013 2014 - 2017 Crude Oil WTI: (US/bbl) US/bbl bbl/d US/bbl bbl/d US/bbl bbl/d US/bbl bbl/d US/bbl…
RESERVES AND RESOURCES The discussion in this presentation in respect of reserves and resources is subject to a number of cautionary statements, assumptions and risks as set forth below and elsewhere in this presentation. See also the…
KEY RESERVE INFORMATION 19% COMPOUND ANNUAL GROWTH Reserves as of December 31, 2011* (mmboe) - Proved Producing 209 (98 mmboe liquids, 655 bcf gas) - Total Proved 360 (123 mmboe liquids, 1,419 bcf gas) - Proved Plus Probable 572…
385 PER CENT RESERVE REPLACEMENT IN 2011 Fourth consecutive year of greater than 200% reserve replacement through the drill bit Proved plus probable reserves increased 18% to 572 mmboe after divest of non-core assets with 14.6 mmboe…
DEFINITIONS OF OIL AND GAS RESERVES AND RESOURCES Reserves are estimated remaining quantities of oil and natural gas and related substances anticipated to be recoverable from known accumulations, as of a given date, based on the…
DEFINITIONS OF OIL AND GAS RESERVES AND RESOURCES Economic Contingent Resources are those contingent resources which are currently economically recoverable. Undiscovered Petroleum Initially-In-Place (UPIIP) is that quantity of…
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