Value Proposition Risk Managed Value Creation Long-term view with a commitment to value creation through profitable growth and income Focus on cost management and capital discipline Significant exposure to early stage development of…
Corporate Profile Corporate Summary Production (Q2 2014) 110,165 boe/d Reserves (2P Gross YE 2013) (1) 634 mmboe Reserve Life Index (2P) (1) 15.5 years (2) Annualized Dividend / Dividend Yield 1.20 per share / 3.8% (3) Annualized…
Unique Strategy Risk Managed Value Creation is Central to ARCs Strategy Targeting net debt to 200% Reserve funds from operations Replacement through the between 1.0 1.5x drill bit for the past 6 consecutive years One of the…
Risk Managed Value Creation 18% Compound Annual Production Growth Since Inception boe/d Forecast
Growing Oil and Liquids Since 2009 Meaningful Oil And Liquids Production and Reserves Growth 7% CAGR(1) total Liquids production 2009 2015 Forecast 5% CAGR(1) total 2P Liquids reserves 2008 - 2013 Liquids Production 2009 2015F
Growing Our Low Cost Gas Business Significant Natural Gas Production and Reserves Growth 15% CAGR(1) total Natural Gas production 2009 - 2015 Forecast 21% CAGR(1) total 2P Natural Gas reserves 2008 - 2013 (1) Compound annual growth…
ARCs Proven Development Model Inventory of Opportunities at all Stages FULL CYCLE GROWTH AND INCOME PROVIDER Dawson, Pembina, SE Sask/Manitoba, Redwater OPTIMIZE COMMERCIALITY Ante Creek, Parkland/Tower EXPANSION REPEAT…
Financial Flexibility
Financial Flexibility Balance Sheet Strength Targeting net debt to funds from operations between 1.0 1.5x Net Debt to FFO (1) H1 2014 Net Debt to FFO was calculated based on annualized Funds from Operations for the six months…
Sustainable Dividend Committed to the Dividend While Delivering Profitable Growth 19% annualized total return since inception, 5 billion of dividends (30.48/share) Cumulative Dividends and Historic Payout Ratio
High Quality Long Life Assets
Operations Overview Western Canadian Producer Strategic Optionality Montney
Montney Growth Assets 3rd Largest Montney Landholder with 950 Net Sections in BC and Alberta 500 km
Why the Montney Recoverable Resource exceeds equivalent of 3 Haynesville Shales or 6 Barnett Shales Massive thickness Superior Lithology and Fracability High permeability Higher recovery factors Reservoir Attribute Montney…
ARC in the Montney Montney ARCs Growth Engine
NEBC Montney Reserves & Resources NEBC Montney TPIIP 55 Tcf of Gas and 2.2 Billion Barrels of Oil Corporate 2P Reserves of 634 mmboe OIL RESERVES 11.3 mmbbls 2.2 Tcf NGL 27.6 mmbbls OIL ECONOMIC CONTINGENT RESOURCE 10.7…
Montney - Infrastructure Optionality Well Positioned For Market Access Area is currently well served with three major pipelines providing access to North American Markets: TransCanada Canada & US ARC Lands Alliance Chicago…
Montney - Multiple Layers to Develop Attachie Septimus Sunrise Tower Parkland Dawson Pouce Coupe Montney A Upper Montney Montney B Montney C Montney Lower Montney D Montney E - Existing Horizontal…
Dawson Gas World Class Gas Resource
Dawson Asset Details Excellent Free Cash Flow Net production (boe/d) Q2 2014 27,700 Liquids (bbls/d) 970 Gas (mmcf/d) 160 Production split % (liquids/gas) 97% gas Land (Montney net sections) 133 Working Interest 96%…
Dawson A Cash Flow Machine Low Reinvestment Ratio to Maintain Significant Free Cash Flow Grown production from approximately 50 Mmcfe/d in 2009 to 165 Mmcfe/d by mid 2012 At Cdn3 gas 30% Reinvestment Ratio to sustain Cash Flow and…
Dawson Gas Type Curve Growth Frac Technology Advancements = Improvements in Well Performance Completions 2009-2011 2012 2014 Type curve growth over time due to Frac spacing (m) 180 150 85 improvements in well design, focused on…
Parkland/Tower Reaping Acquisition Benefits
Parkland/Tower Asset Details Material Value Creation in 2014 Parkland Tower Net production (boe/d) 16,100 4,450 Q2 2014 Liquids (bbls/d) 3,500 2,810 Gas (mmcf/d) 76 9.8 Land (net sections) 23 57 Working Interest 84% 92%…
Tower Dual-Layer Development Tower also has Dual-Layer Montney Development Opportunity Parkland and Tower have similar geology Tower Type Well Parkland Type Well Montney A Upper Montney B Montney Montney C Montney…
Tower Strong Well Performance Early Days.Promising Results at Tower Tower 12-16 Pad (8 wells) Cumulative Production Cumulative Oil Production (Mbbls) Cumulative Total Production (Mboe) Restricted to 100 bopd MRL due to…
Sunrise Long-Term Growth Opportunity
Sunrise/Sunset Asset Details Sunrise/Sunset Moving Forward with Full Scale Development Sunrise has progressed from pilot to full scale development Net production (boe/d) Q2 2014 5,100 Liquids (bbls/d) 0 Gas (mmcf/d) 30.6 Land…
Sunrise Development Planning Multiple Zones with Economies of Scale Sunrise Development Sunrise Type Well Proposal Montney A Montney B Montney C Montney D Montney Existing E Horizontal Wells
Sunrise Outperforming Expectations 2014 Drilling Results Prove up Four Layer Development Model C02-25Hz (MTYE): 2010 Completion - 130m interfrac spacing -- proposing reducing interfrac spacing going forward
Sunrise Outperforming Expectations Type Curve Improvements over time due to improvements in well design Completions 2009-2011 2014 Frac spacing (m) 120 80 Fracs per well 16 25 Cost per frac (000) 173 111 Hybrid / Fluid system…
HSE and Operational Excellence
Ante Creek Asset Details Significant Cash Flow with Substantial Growth Opportunity Net production (boe/d) Q2 2014 17,800 Liquids (bbls/d) 9,900 Gas (mmcf/d) 47 Production split % (liquids/gas) 56/44 Land (Montney net sections)…
Operational Excellence Ante Creek Reducing Business Cycle Times with Optimized Frac Design Drilling Longer Laterals in Fewer Days Lower Cost/Frac, Optimizing Frac Intensity Frac Design 20T, Nitrified Foam Fracs with Open Hole…
Top Talent and Strong Leadership Culture
Top Talent and Strong Leadership Culture Commitment to People, Health, Safety and Environment Delivers Results People & Talent Health & Safety Environmental Leadership Leadership Leadership Low Employee Attrition Target Zero Lost…
Risk Managed Value Creation
Montney Pilots Proving Up Future Value before Full Scale Development West Attachie: Pilot Production on-stream since Q2 Parkland: 2014 Lower Montney well on-stream Q3 2014 East Attachie: Pouce Coupe: Monitoring Pilot Lower…
Montney Development Economics Strong Rates of Return Across the Montney Portfolio Half Cycle Economics Cdn 95/bbl Oil and Cdn4/GJ Gas Parkland Tower Dawson Sunrise Ante Creek 70% IRR 35% IRR 85% IRR 80% IRR 70% IRR 4.2x Recycle…
Improving Capital Efficiencies Managing Declines and Driving Down Costs All In Capital Efficiencies /boe/d (1) 3 Year Avg. Capital Efficiencies /boe/d (2) (1) 2013 Costs include Infrastructure spending, related production…
Cost Management Lowering Costs = Increasing Profitability F&D Costs including change in future development capital. Netback before hedging.
Growth in Per Share Production and Cash Flow Delivering Value with Profitable Growth and Income 23% increase in production per share and 72% increase in Funds from Operations per share since 2009 Production per Share (1) Funds From…
Summary
Why Invest in ARC Clear Line of Sight to Long-term Value Creation Long-term view and commitment to value creation through profitable growth and income Focus on cost management and capital discipline Significant exposure to early…
Looking Beyond 2015 Diverse Portfolio Provides Strategic Optionality Well balanced inventory of value creating opportunities which may be pursued beyond 2015 Option to grow at a rate estimated to be similar to growth for the period…
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