April 11-12, 2011 CIBC 2011 Energy & Infrastructure Conference
ARC RESOURCES Launched July 1996 as ARC Energy Trust - 19% annual return since inception (to March 30) - 26.38 per unit in total distributions (to March 30) -Total distributions of 3.9 billion (to March 30) - Converted to a dividend…
INCOME AND GROWTH BOTH ARE POSSIBLE ARC has a 14 year history of risk managed value creation - Provided a 19% annual return since inception - Distributed 3.9 billion in total distributions - 26.38 / unit - Grown absolute production…
EXCELLENT FD&A PERFORMANCE Replaced 502% of production in 2010 at an all in FD&A of 9.21/boe Drill bit F&D was 6.47/boe FD&A 25 20 15 10 5 0 2002 2003 2004 2005 2006 2007 2008 2009 2010
500 PER CENT RESERVE REPLACEMENT Third successive year of greater than 200% reserve replacement from the drill bit Proved plus probable reserves increased 29% to 487 mmboe Development Acquisitions 700% 600% 500% 400% 300% 200%…
KEY RESERVE INFORMATION 19% COMPOUND ANNUAL GROWTH Reserves as of December 31, 2010* (mmboe) - Proved Producing 213 (104 mmboe liquids, 652 bcf gas) - Total Proved 336 (124 mmboe liquids, 1,274 bcf gas) - Proved Plus Probable 487…
10% COMPOUND ANNUAL GROWTH IN RESERVES PER UNIT (ADJUSTED) An investor who participated in the distribution re-investment plan since inception would have enjoyed a 10% compound annual growth in the reserves attributed to their…
2011 CAPITAL PROGRAM TARGETS 12 PER CENT GROWTH ( Millions) 2009 (a) 2010(a) 2011(b) Development 187 354 409 Development Facilities 73 72 54 Maintenance 11 15 29 Optimization 8 11 18 Land & Seismic 11 65 17 Unconventional Gas 16 1 5…
Total Company 2011 BUDGET - UNCONVENTIONAL OPPORTUNITIES FORM THE BASE NEBCNWAB 228 MM NORTHAB Capital Avg Gross 35,400 boe/d 122.7 MM mm Volumes Wells 35 wells 10,100 boe/d (boe/d) 19 wells Operated 560 72,000 166 74,000 Non-…
Total Company 2011 BUDGET 86% of WELLS DRILLED WILL BE HORIZONTAL NORTH AB 1 TOTAL OPERATED 2011 18 NE BC/NW AB 24 Horizontal Vertical 7 REDWATER 142 28 1 PEMBINA 86% of wells are Horizontal 13 1 41 CENTRAL AB SE…
ARC RESOURCES TOP TIER GROWTH PLUS INCOME According to recent Credit Suisse estimates, ARC has one of the highest expected total returns as measured by organic growth rate plus free cash flow yield in the Canadian Energy group…
PROPERTY OVERVIEW
DAWSON BRITISH COLUMBIA
MONTNEY LANDS MAJOR GROWTH ENGINE Dawson and the West ATTACHIE Montney lands are a significant growth engine for ARC With greater than 10 Tcf 0.8 Tcf of gas classified as DGIIP, ARCs current plans call 5.5 Tcf for the…
MONTNEY LANDS MAJOR GROWTH ENGINE ARC had our independent reserves evaluator assess the resource potential of our main BC Montney lands, excluding Attachie Reserves and Resources - December 31, 2010 (1) Estimated Economic…
MONTNEY LANDS RESERVE GROWTH OVER TIME The first horizontal well was drilled in 2005. Success of this well lead to the recognition that considerably more gas could be accessed then had previously been thought. Over time, ARC has…
HORIZONTAL WELLS 30 DAY IP RATES MARCH 2011: Glacier - Town 12000 ARC Others 10000 8000 Production Rate (mcf/d) ARC P50 6000 P50 4000 2000 0 1 51 101 151 201 251 301 351 401 451 501 P50 All Wells 3.3…
HORIZONTAL WELLS 30 DAY IP RATES MARCH 2011 ARC ONLY 12000 10000 8000 Production Rate (mcf/d) ARC P50 6000 4000 2000 0 1 21 41 61
DAWSON PRODUCTION TARGET 165 MMCF/D IN Q2 2011 Gas MMcf/d 120.0 100.0 80.0 60.0 40.0 20.0 0.0 First 60 mmcf/d gas plant on stream May 2010, second 60 mmcf/d gas plant under construction April 1, 2011 start-up date targeted…
RECENT WELL PERFORMANCE REMAINS STRONG ARC constrains production to approximately 5.3 mmcf/d to limit abrasion on pipes and fittings this results in productive capacity being understated, but lengthens the time that wells will…
DAWSON DEVELOPMENT ECONOMICS 7,000 P10 Type Curve P90 IP (1mo) MMcf/d 5.9 5.0 3.3 6,000 IP (12mo) MMcf/d 4.4 3.7 2.1 5,000 EUR (Bcf) 7.7 6.2 3.8 Gas Rate mcf/d 4,000 3,000 2,000 (26 mos) 1,000 0 (49 mos) 0 2 4…
DAWSON 2011 BUDGET PLANS Capital: Total Capital 98 MM Drilling (14 wells): Horizontal 13 Vertical 1 Oil/Gas 0/14 Production: Year End 2010 110 mmcf/d Year End 2011 165 mmcf/d Year Average 150 mmcf/d Strategy: Grow production…
2010 DAWSON GAS PLANT Dawson 5-35 Gas Plant (Phase 2) Mechanical construction complete Electrical wiring complete Tie-in of Phase 2 facilities to Phase 1 facilities is in final stages On track for an early April 2011 start-up of…
PARKLAND LIQUIDS RICH GAS 0.8 TCF GAS 0.8 Tcf of gas classified as DGIIP - P+P Reserves of 227 Bcfe booked on 17 net sections Current production of 40 mmcf/d plus 1,200 b/d liquids FIELD LIQUIDS CONTENT (BBLS/MMCF) Parkland…
PARKLAND TIGHT OIL OPPORTUNITY Proposed 2010 2011 locations Northern portion of the ARC operated Parkland property is in Tourmaline operated liquids window Several vertical wells swabbed light oil on test ARC plans to drill a well…
PARKLAND DEVELOPMENT ECONOMICS 7,000 P10 Type Curve P90 6,000 IP (1mo) MMcf/d 6.4 5.0 3.7 5,000 Gas Rate mcf/d IP (12mo) Mcf/d 2.0 1.6 1.1 4,000 EUR Bcf 5.6 4.8 3.3 3,000 2,000 1,000 0 0 2 4 6 8 10 12 14 16 18 20 22…
PARKLAND 2011 BUDGET PLANS Capital: Total Capital 67 MM Drilling (13 wells): Horizontal 11 Vertical 2 Oil/Gas 0/13 Production: Year-End 2010 8,000 boe/d Year-End 2011 10,070 boe/d Year Average 8,435 boe/d Strategy: Grow…
REGIONAL SCHEMATIC CROSS SECTION A B Total Net Pay3% (m) 103 78 43 36 Total Net Pay6% (m) 30 2 23 4 DGIIP (BCF/Section)* 100 60 45 20 B Lower Upper Montney Montney A [1] Discovered Gas Initially in Place (DGIIP) is the…
WEST MONTNEY RESOURCE 5.5 TCF GAS 5.5 Tcf of gas classified as ATTACHIE DGIIP - P+P Reserves of 253 Bcf at year-end 2010 (approximately 5 per cent of DGIIP) 5.5 Tcf Current production of approximately 7 mmcf/d net to ARC…
SUNRISE/SUNSET 2011 BUDGET PLANS Capital: ATTACHIE Total Capital 25 MM Drilling (3 wells): Horizontal 2 Vertical 1 Oil/Gas 0/3 Production: 5.5 Tcf Year End 2010 0 boe/d Year End 2011 2,301 boe/d Year Average 609 boe/d…
ATTACHIE NEW OPPORTUNITY UNDEFINED POTENTIAL 13 mmcfd test Prospective land base of 101 sections Land offsets a 13 mmcf/d Montney test from a third party ARC plans to drill 4 verticals and 2 horizontals by the end of 2011
ANTE CREEK
ANTE CREEK ASSET DETAILS Current production 8,000 boe/d Reserves 47 mmboe Working interest 98% Reserve life index 16 years (based on current production) Production split 42% oil & NGLs / 58% natural gas ARC owns a large oil battery…
ANTE CREEK - ANOTHER MONTNEY GROWTH STORY 9,000 8,000 Gas 7,000 Liquids 6,000 5,000 4,000 3,000 2,000 1,000 - 2002 01 2001 01 2001 04 2001 07 2001 10 2002 04 2002 07 2002 10 2003 01 2003 04 2003 07 2003 10 2004…
30 Day IP Gas and Oil Rates (boe/d) 0 100 200 300 400 500 600 700 800 900 00/11-24-065- 25W5 Oil 00/05-13-065- Gas 25W5 00/08-17-067- 24W5 00/06-23-065- 25W5 02/02-24-067- 25W5 00/05-10-066- 25W5…
ANTE CREEK MEASURED INITIAL PRESSURE HORIZONTAL WELLS AnteCreek North Triassic E Pool 18000 16000 14000 Well Initial Pressure 12000 Pool Virgin Pressure (kPa) Pressure = 16.3MPa 10000 8000 Infill Horizontals…
ANTE CREEK FUTURE OPPORTUNITIES R26 R25 R24 R23 R22W5 T69 W G _ T69 Land holding of 245 gross and 238 net 1 36 6 31 1 36 6 31 1 36 6 31 1 36 6 31 sections - post closing W…
ANTE CREEK DEVELOPMENT ECONOMICS Case Top 3 Avg. Well Bottom 3 600 IP (1 mo) boe/d 550 385 285 IP (12 mo) boe/d 350 235 140 Normalized Production Rate (BOE/d) 500 EUR (mboe) 445 265 140 400 300 200 100 0 0 3 6 9…
PEMBINA ALBERTA
PEMBINA ARCs HOLDINGS Gross Operated Wells in the Pembina Cardium Wells Penn West 2,458 39% ARC 1,423 23% Bonterra 694 11% Imperial 362 6% Enerplus 334 5% PetroBakken 118 2% ARC is the second largest operator in the Pembina…
PEMBINA CARDIUM STRUCTURAL CROSS SECTION A A 1375m CARDIUM 1494m UNIT Rge 8 Rge 7 Rge 6W5 Twp 49 Conglomerate unit Upper Sand Unit Twp 48 Middle Unit Twp 47 5 km Lower Sand Unit
PEMBINA HORIZONTAL DRILLING PLANS 2010 drilled 25 horizontals and 3 vertical wells Initial production results are encouraging average IP rates are 150 200 boe/d but with variability Geology of the Pembina field is quite variable…
PEMBINA 30 DAY INITIAL PRODUCTION RATES ALL WELLS ARCs Wells Median Well approximately 150 boe/d
PEMBINA 30 DAY INITIAL PRODUCTION RATES CORE WELLS ARCs Wells Median Well approximately 120 boe/d
HORIZONTAL WELL RESULTS Given the vertical and horizontal variability in the reservoir, it is not surprising that there is great variability in production results Which is the type curve
HORIZONTAL WELL RESULTS ARC WELLS ONLY
PEMBINA OPPORTUNITY ARC is optimistic about the opportunity for increased recovery at Pembina from the application of horizontal drilling and completion technology: In the heart of Pembina, excluding the halo lands, a 1% increase in…
SUMMARY
WHERE TO FROM HERE Our vision remains the same: Leading oil and gas entity as measured by: Quality of assets Leadership Long-term return to investors Risk managed value creation We expect to continue to provide both growth and…
APPENDIX
2010 OPERATING PERFORMANCE ( millions except per share and per boe numbers) 2010 2009 Change Production full year (boe/d) 73,954 63,538 16% 4th Quarter 84,686 62,520 35% Cash flow from operating activities 186 143 +30% Per share…
HEDGING UPDATE As Of Jan. 31, 2011 Liquids 2011 2012 Oil (bbls/d) 20,000 16,000 Sold Call (US/bbl)* 89.43 90.00 Bought Put (US/bbl) 84.43 90.00 Sold Put (partial volumes) 61.04 60.00 Gas 2011 2012 Gas (mcf/d) 162,800 66,500…
PEMBINA 90 DAY INITIAL PRODUCTION RATES ALL WELLS ARCs Wells Median Well proximately 130 boe/d
PEMBINA 90 DAY INITIAL PRODUCTION RATES CORE WELLS ARCs Wells Median Well approximately 150 boe/d
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