ARC Resources Macquarie Connections Future of Energy 2012: Global Energy Conference May 17, 2012
CORPORATE OVERVIEW Production (Q1 2012) 94,970 boed Liquids 36,136 boed Natural gas 353 mmcfd Reserves (2P Gross) 572 mmboe NE BC/ NW AB 17 year RLI (1) NORTH AB Current monthly dividend 0.10 Annualized total return 17.1% (2)…
2012 FINANCIAL AND OPERATIONAL PERFORMANCE Three months ended March 31 % Change (CDN millions, except per share and per boe amounts) 2012 2011 Production (boe/d) 94,970 73,880 29 Gas 62% 56% - Liquids 38% 44% - Revenue 366.0 324.2…
2012 FOCUS ON OIL AND LIQUIDS OPPORTUNITIES 600 million capital program in 2012 to drill 150 gross operated wells focused on oil and liquids opportunities at Ante Creek, Pembina, SE Sask/Manitoba and Tower PARKLAND/TOWER Q1…
2012 GROWING OIL AND LIQUIDS Drilled 59 gross operated wells in first quarter 2012 (98% oil and liquids-rich) Grew crude oil and liquids production 10% to 36,136 boe/d in Q1 2012 (relative to Q1 2011) with significant growth at Ante…
2012 FOCUS ON OIL AND LIQUIDS Oil and liquids comprised 38% of first quarter 2012 production while contributing 77% of first quarter revenue Active hedging program in place to protect crude oil prices with approximately 55% of crude…
GROWTH VS. INCOME 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…
INCOME AND GROWTH BOTH ARE POSSIBLE ARC has a 15 year history of risk managed value creation - Provided a 17% annual total return since inception - Paid out 4.3 billion in total dividends - 27.78/share - Grown absolute production…
PRODUCTION GROWTH Production Growth - Montney and Non-Montney 100,000 Montney Gas (boe/d) Montney Oil/Liquids (bbls/d) 90,000 Non-Montney Gas (boe/d) Non-Montney Liquids (boe/d) 80,000 70,000 Total Non-Montney production…
CORPORATE STRATEGY OVERVIEW 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…
CORPORATE STRATEGY CREATING VALUE CAPITAL DISCIPLINE Highest rate of return projects receive funding RESOURCE PLAY DEVELOPMENT Unlock the value in existing plays OPERATIONAL EXCELLENCE Technical expertise, capital efficiency and…
FINANCIAL STRATEGY Maintain a strong balance sheet - targeted low debt levels (1.0x 1.5x debt to cash flow) to enable the company to weather low commodity price cycles. APPROACH Finance capital expenditures necessary to sustain…
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…
WESTERN CANADA BASED 2012 CAPITAL PROGRAM 2012 Budget 2011 Actual NEBCNWAB NORTHAB Capital Expenditures* 660 726 Gross Operated Wells Drilled 150 164 Average Production REDWATER (boe/d) 92,000-95,000 83,416 * Excludes land and…
Ante Creek A Montney Oil Success Story
ANTE CREEK ASSET DETAILS Net Production: 8,700 boed (Q1 2012) 26.4 mmcfd; 4,371 bbls/d Production split: 50% Oil & NGLs / 50% Gas Land: 262 Net Montney Sections Working Interest: 97% Reserves (2P): 47.2 mmboe (162 Bcf; 20.2…
ANTE CREEK GROWING OIL AND LIQUIDS Ante Creek - 109% Increase in Oil & Liquids Production 9,000 8,000 gas 7,000 Acquired producing oil & liquids properties 2,000 boe/d 6,000 (50% oil and liquids) 5,000 Boe/d 4,000…
ANTE CREEK HZ WELLS ANTE CREEK KAYBOB 1200 30 Day Average Daily IP Rate (boe/d) 1000 Gas Liquids 800 600 ARC Median Well Boe/d 377 boe/d Industry Median Well 400 231 boe/d 200 0 (1) All reported wells from…
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…
Pembina Revitalizing a Mature Oil Field
PEMBINA ASSET DETAILS Net Production: Cardium production 8,862 boe/d net WI Total area production - 10,816 boe/d net WI Production split: 79% Oil & NGLs/ 21% gas Land: 132 Net Sections Working Interest: 78% Reserves (2P):…
PEMBINA OIL AND LIQUIDS GROWTH Pembina - 23% Increase in Oil & Liquids Production 12,000 10,000 8,000 Boe/d 6,000 Q1 2012 - 8,500 boe/d oil Q1 2006 - 6,900 boe/d oil and liquids and liquids 4,000 2,000 gas oil &…
PEMBINA CARDIUM AREA IP AVERAGE (3 MONTH RATE) 3 Month Average Daily Rate 500 450 ARCs Wells 400 350 300 (boe/d) 250 ARC Median Well 200 Industry Median Well 148 boepd 143 boepd 150 100 50 0
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 &…
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…
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% NE B.C. Montney DPIIP 25.5 Tcf (0%) of TPIIP at 3% cut-off (4.2% at 0% cut-off). Best Estimate ECR…
British Columbia Montney Gas and Liquids
MONTNEY LANDS WORLD CLASS RESOURCE Eagleford, Texas Montney, BC and AB EAGLEFORD GAS, GAS CONDENSATE AND OIL FAIRWAY 350 miles Dawson 300 miles Ante Creek MONTNEY GAS, GAS CONDENSATE AND OIL FAIRWAY Source: Ross…
MONTNEY LANDS MAJOR GROWTH ENGINE NE BC Montney lands are a major growth engine Significant opportunity to grow liquids production. DPIIP of 25.5 Tcf ECR of 4.1 Tcf and 101 mmbbls of NGLs 2P Reserves 1.9 Tcf of gas and 21 mmbbls…
Parkland/Tower Liquids Rich Gas
PARKLAND ASSET DETAILS Net Production: 9,191 boe/d (Q1 2012) 48.5 mmcf/d; 1,100 bbls/d liquids Liquids-rich gas 20 -30 bbls/mmcf Land: 23 Net Sections Working Interest: 64% Reserves (2P): 49.7 mmboe (247 Bcf and 8.4 mmbbl)…
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…
TOWER EVALUATING POTENTIAL Net Production: 300 boe/d (Q1 2012) 1.0 mmcfd; 140 bbls/d liquids Land: 48 Net Sections Working Interest: 83% Reserves (2P): 4.5 mmboe (19.2 Bcf and 1.4 mmbbl) Reserve life index: 37.0 years Drilled…
Attachie New Opportunity Undefined Potential
ATTACHIE NEW OPPORTUNITY UNDEFINED POTENTIAL Prospective land base of 119 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: 28,500 boe/d (Q4 2011) (Gas 167 mmcfd; NGLs 721 bbls/d) Production split: 97% Gas Land: 129 Net Montney Sections Working Interest: 93% Reserves (2P): 174 mmboe (1,012 Bcf, 5.0 mmbbl) Reserve…
DAWSON 30 DAY HZ IP RATES DAWSON/PARKLAND 14,000 ARC Others 12,000 Production Rate (mmcf/d) 10,000 8,000 ARC Wells P50 = 5.2 Mmcf/d 6,000 Other Wells P50 = 3.3 Mmcf/d 4,000 2,000 0 1 101 201 301 401 501 601…
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: 2,500 boe/d (Q1 2012) 15 mmcf/d; Land: 50 Net Sections Working Interest: 76% Reserves (2P): 82.8 mmboe (483 Bcf gas; 2.3 mmbbl liquids) Reserve life index: 54.7 years
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 resource base with high quality oil and natural gas development opportunities provides optionality through…
PRODUCTION GROWTH Production Growth - Montney and Non-Montney 100,000 Montney Gas (boe/d) Montney Oil/Liquids (bbls/d) 90,000 Non-Montney Gas (boe/d) Non-Montney Liquids (boe/d) 80,000 70,000 Total Non-Montney production…
HEDGE POSITIONS AS OF MAY 2, 2012 Summary of Hedge Positions as at May 2, 2012 (1)(2) Q2 2012 Q3 2012 Q4 2012 2012 2013 Crude Oil WTI: (US/bbl) US/bbl bbl/d US/bbl bbl/d US/bbl bbl/d US/bbl bbl/d US/bbl bbl/d Sold Call 91.11…
ACCESS TO CAPITAL DEBT Debt raised from three different sources: 1. Bank Credit Facility - 1 billion plus 25 million overdraft facility 12 banks in ARCs bank credit facility The credit facility was extended to August 3, 2015…
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 695.6 million allows for significant flexibility to repay…
MAJOR PROPERTIES BY PRODUCTION 30,000 2012 Q1 Average Daily Production 25,000 20,000 Liquids (boe/d) Gas (boe/d) (boe/d) 15,000 10,000 5,000 -
MAJOR PROPERTIES BY RESERVES 2011 Year End P+P Reserves - Major Properties 200 180 Reserves as of December 31, 2011* (mmboe) 160 - Proved Producing 209 (100 mmboe liquids, 655 bcf gas) - Total Proved 360 (123 mmboe liquids, 1,419…
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 BC MONTNEY RESERVES AND RESOURCES Significant resources exist in each of our prospects in the NE B.C. Montney 25% 13% 74% 23% 62% Attachie Parkland/Tower DPIIP 6 Tcf DPIIP 2.4 Tcf 7% 23% Dawson DPIIP 70% 8 Tcf…
KEY RESERVE INFORMATION 19% COMPOUND ANNAL 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 (170…
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…
EXCELLENT FD&A PERFORMANCE Replaced 385% of production at an all in FD&A cost of 5.24/boe* 2011 recycle ratio of 5.3 times based FD&A* FD&A Costs and Recycle Ratio* 25.00 6.0 FD&A 5.0 20.00 F&D Recycle Ratio 4.0 Recycle…
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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