Barclays Americas Select Franchise Conference London May 21, 2013
CORPORATE OVERVIEW Production (Q1 2013) 95,500 boed Liquids 37,400 boed Natural gas 349 mmcfd Reserves (2P Gross) 607 mmboe 17.5 year RLI (1) Current monthly dividend 0.10 Annualized total return Since Inception 19% (2)…
VALUE PROPOSITION We believe that top performing companies all have the following attributes: Great assets Operational excellence Capital discipline Management that delivers results Strong balance sheet with financial flexibility…
RISK MANAGED VALUE CREATION PRODUCTION GROWTH
INCOME AND GROWTH ARC HAS DELIVERED BOTH ARC has a 16 year history of risk managed value creation Provided an 19% annual total return since inception Paid out 4.6 billion in total dividends - 28.98/share Grown absolute production…
PER SHARE GROWTH RESERVES AND PRODUCTION PER SHARE GROWTH Consistent growth in absolute and per share reserves and production over the past five years Production per thousand shares 2P Reserves per share Normalized per thousand…
200 PER CENT RESERVE REPLACEMENT IN 2012 2012 is the fifth consecutive year of greater than 200% reserve replacement Increase in 2P reserves of 6% to 607 mmboe Replaced 214% of crude oil and liquids reserves, increasing 9% to 186…
CAPITAL EFFICIENCY EXCELLENT FD&A PERFORMANCE IN 2012 Replaced 200% of production at an all in FD&A cost of 9.34/boe(1) 2012 recycle ration of 2.7 times based on F&D of 9.01/boe(1) and pre- hedging netback of 24.17/bbe Three year…
SUSTAINABLE DIVIDEND 4.6 BILLION IN DIVIDENDS SINCE INCEPTION The dividend is a critical component of our business strategy Sustained dividend levels through commodity price cycles due to quality of assets, active hedging program and…
OUR STRATEGY RISK MANAGED VALUE CREATION
2013 BUDGET
FOCUS ON OIL AND LIQUIDS OIL AND LIQUIDS PRODUCTION GROWTH IN 2013 Focus on crude oil and liquids development resulted in liquids production of 37,400 boe/d in Q1 2013, growth of 3% relative to Q1 2013 attributed to Ante Creek,…
2013 CAPITAL PROGRAM SETTING THE STAGE FOR 2014 PRODUCTION GROWTH 830 million capital program (178 gross operated wells) with majority of spending in oil and liquids-rich gas plays and infrastructure. 2013 Capital Budget…
2013 BUDGET 2013/2014 PRODUCTION GROWTH
ASSET OVERVIEW
ASSET OVERVIEW WESTERN CANADA Montney Growth Assets Base Assets Blueberry Attachie Tower Septimus Parkland Sunset/Sunrise Dawson Sundown Ante Creek Redwater Natural Gas Pembina Liquids-rich gas Hatton Crude…
ANTE CREEK A Montney Oil Success Story
ANTE CREEK ASSET DETAILS Net production (boe/d) Q1 2013 10,600 Liquids (bbls/d) 5,200 Gas (mmcf/d) 33 Production split % (liquids/gas) 50/50 Land (Montney net sections) 268 Working Interest 99% Reserves (2P mmboe) 47.7…
ANTE CREEK MONTNEY DEVELOPMENT ECONOMICS Key Metrics DCET Capex per well (MM) 4.0 Reserves per well (Mboe) 283 IP (1 mo) (boe/d) 400 IP (12 mo) (boe/d) 245 Economics (85/bbl) 4/GJ 3/GJ IRR (% AT) 45% 35% Recycle Ratio 2.1…
ANTE CREEK 2013 BUDGET - 186MM OPERATED
BRITISH COLUMBIA Montney Gas and Liquids
MONTNEY LANDS World Class Resource Major Growth Engine Blueberry One of the largest and PROGRESS/PETRON AS Kahta/Lily lowest cost natural gas TALISMAN/SASOL Attachie resource plays in North America Farrell Creek Tower…
MONTNEY LANDS SIGNIFICANT MONTNEY RESOURCE ARC has a significant presence in B.C. and Alberta Montney First to drill B.C. Montney horizontal well in 2005 at Dawson BC Montney Hz Wells Rig Released by BC Montney Gross Operated Raw…
MONTNEY HORIZONTAL WELLS 30 DAY HZ IP RATES GLACIER - TOWN ARCS MONTNEY WELLS HAVE EXCEEDED EXPECTATIONS (1) Graph represents peak calendar day IP rates for the first month of production to November 2012. (2) Region includes all…
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…
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 GROWTH ASSETS RESERVES AND RESOURCES Independent Resources Evaluation conducted by GLJ effective December 31, 2012 In addition to the 50.1 Tcf of natural gas resource, an oil resource of 1.5 billion barrels was identified at…
MONTNEY GROWTH ASSETS RESERVES AND RESOURCES 2012 Best 2011 Best Reserves and Economic Contingent Resources (1)(2) Estimate Estimate Natural Gas (Tcf) Reserves (3) 2.1 1.9 Economic Contingent Resources 4.2 4.1 Natural Gas Liquids…
DAWSON World Class Asset
DAWSON ASSET DETAILS Net production (boe/d) Q1 28,900 2013 Liquids (bbls/d) 800 Gas (mmcf/d) 169 Production split % (liquids/gas) 97% gas Land (Montney net sections) 130 Working Interest 96% Reserves (2P mmboe) 181…
DAWSON TYPE CURVE GROWTH 2008 type curve analysis was completed using initial production results and verified with a vertical well production multiplier 2009-2011 Type curve used P90 IPs with decline analysis and assigned decline…
DAWSON MONTNEY DEVELOPMENT ECONOMICS Key Metrics DCET Capex per well (MM) 5.2 Reserves per well (Bcf) 7.1 IP (1 mo) (MMcf/d) 5.0 IP (12 mo) (MMcf/d) 4.8 Economics (85/bbl) 4/GJ 3/GJ IRR (% AT) 72% 44% Recycle Ratio 3.8 2.8…
DAWSON 2013 BUDGET - 52MM OPERATED
PARKLAND/TOWER Liquids Rich Gas
PARKLAND/TOWER EVALUATING POTENTIAL AND DEVELOPING EXISTING LANDS Parkland Tower Net production Q1 2013 7,700 1,300 (boe/d) Liquids (bbls/d) 960 730 Gas (mmcf/d) 40 3.7 Land (net sections) 23 56 Working Interest 84% 90%…
PARKLAND LAYERED DEVELOPMENT Producing Formation: Upper Montney Gross thickness 100m Net pay 90m Porosity 6% Permeability 0.01 to 0.1 mD Large DGIP volumes in Parkland, currently have modest recoveries per well 100 Bcf DGIP…
PARKLAND LAYERED WELL PERFORMANCE Drilled and completed 2 wells in upper sand of the Upper Montney and 1 well offset in the lower sand in 2011 All wells had similar IP, ranging from 4.7 5.1 MMcfd No pressure response between the…
PARKLAND MONTNEY DEVELOPMENT ECONOMICS Key Metrics DCET Capex per well (MM) 5.2 Reserves per well (Bcf) 5.8 IP (1 mo) (MMcf/d) 5.0 IP (12 mo) (MMcf/d) 4.0 Economics (85/bbl) 4/GJ 3/GJ IRR (% AT) 79% 54% Recycle Ratio 4.2…
TOWER 2012 ACCOMPLISHMENTS 2012 Accomplishments: 2012 Operated Program average 30 day IP rate: 375 boe/d per well Production volumes limited due to liquid handling restrictions 2013 Plans: First of two eight well development…
TOWER OPERATIONAL EXCELLENCE MINIMIZING FOOTPRINT Pad drilling will substantially minimize surface land footprint Expect 8 to 16 wells per pad depending on reservoir characteristics Considerable cost savings related to pad…
TOWER MONTNEY DEVELOPMENT ECONOMICS Key Metrics DCET Capex per well (MM) 5.3 Reserves per well (Mboe) 400 IP (1 mo) (boe/d) 500 IP (12 mo) (boe/d) 260 Economics (85/bbl) 4/GJ 3/GJ IRR (% AT) 41% 37% Recycle Ratio 3.3 3.1…
TOWER/PARKLAND 2013 BUDGET - 249MM OPERATED
WEST MONTNEY Long-term Growth Opportunity
WEST MONTNEY ASSET DETAILS Net production (boe/d)- Q1 3,550 2013 Liquids (bbls/d) 80 Gas (mmcf/d) 20.8 Land (net Montney sections) 216 Working Interest 90% Reserves (2P mmboe) 131 Liquids (mmbbls) 11 Gas (bcf) 723 Reserve Life…
WEST MONTNEY OPERATIONAL EXCELLENCE DEVELOPMENT PLANNING
SUNRISE SUNRISE PRODUCTION OUTPERFORMING EXPECTATIONS Realized positive technical revisions in Sunrise based on 2-25 Hz well pad performance. Estimated Ultimate Recovery (EUR) is Cumulative Production + 2P Reserves. Montney A…
SUNRISE MONTNEY SUNRISE DEVELOPMENT ECONOMICS Key Metrics DCET Capex per well (MM) 5.5 Reserves per well (Bcf) 9.7 IP (1 mo) (MMcf/d) 5.2 IP (12 mo) (MMcf/d) 4.5 Economics (85/bbl) 4/GJ 3/GJ IRR (% AT) 51% 32% Recycle Ratio 4.5…
SUMMARY
WHY INVEST IN ARC RESOURCES ARC is a top-tier oil and natural gas producer focused on Risk Managed Value Creation Commitment to sustainable dividend enforces higher degree of capital discipline and provides predictable return to…
2013 GUIDANCE 2013 Guidance 2013 Q1 Actual 2012 Actual Oil (bbls/d) 32,000 34,000 32,505 31,454 Condensate (bbls/d) 1,800 2,000 2,032 2,217 Gas (mmcf/d) 340 350 348.6 342.9 NGLs (bbls/d) 2,400 2,800 2,831 2,728 Total (boe/d)…
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 undrawn credit facility of 1.0 billion allows for significant flexibility to repay debt
HEDGE POSITIONS AS OF MAY 1, 2013 Summary of Hedge Positions as at May 1, 2013 (1) May - Dec 2013 2014 2015 2016 - 2017 Crude Oil WTI(2): (US/bbl) US/bbl bbl/d US/bbl bbl/d US/bbl bbl/d US/bbl bbl/d Ceiling 104.01 14,992 100.00…
CANADIAN CRUDE OIL DIFFERENTIALS Prices for Canadian crude oil relative to WTI have seen volatility over the past year which is mainly attributed to: Production Increases Growth in Canadian and Bakken production Refinery Capacity…
NGL MARKETS Infrastructure Western Canadian NGL infrastructure market dominated by a few major players Infrastructure has not kept pace with development Expansions are planned to come on-line in 2015 Western Canadian NGL Market…
NATURAL GAS MARKET US Production continues to stay strong at 64 bcf/d Prices have recovered from decade lows seen in 2012 as increased heating demand has helped alleviate inventory concerns
NATURAL GAS ARC NATURAL GAS MARKETING Two-phased approach of diversification both physically (to minimize operational risk) and financially (to manage price exposure) The majority of ARCs production has access to three major pipeline…
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 analysis…
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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