FirstEnergy/Socit Gnrale East Coast Energy Conference New York March 8, 2012
ARC RESOURCES (ARX-T) Production (Q4 2011) 92,021 boed Liquids 31,803 boed Natural gas 355 mmcfd Reserves (2P Gross) 572 mmboe NE BC/ NW AB 17 year RLI (1) NORTH AB Current monthly dividend 0.10 Annualized total return 19% (2)…
2011 FINANCIAL AND OPERATIONAL PERFORMANCE
2011 FINANCIAL AND OPERATIONAL PERFORMANCE Focus on exploitation of oil and liquids opportunities to capitalize on strength of crude oil prices in 2011 and 2012 Oil and liquids comprised 35% of fourth quarter 2011 production while…
GROWTH vs. INCOME We believe that top performing companies all have the following attributes: Great assets Low cost structure Management that delivers results At ARC our focus since inception has been on Risk Managed Value…
INCOME AND GROWTH BOTH ARE POSSIBLE ARC has a 15 year history of risk managed value creation - Provided a 19% annual total return since inception - Paid out 4.3 billion in total dividends - 27.58/share - Grown absolute production…
PRODUCTION GROWTH Forecast Forecast
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, operating…
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 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…
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…
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…
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…
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 Year-end 2011 Proved plus Probable (2P) reserves increased 48% to 1.9 TCF of gas and 21 MMBBL of liquids. 2P reserves are currently assigned to only 34% of ARCs lands (146 out of 434 net…
NE B.C. MONTNEY RESERVES AND RESOURCES Very early stage in reserve booking cycle: NE B.C. Montney DPIIP 25.5 Tcf (0%) 2P Reserves (1.9 Tcf) plus Cum Prod only 5.3% of TPIIP at 3% cut-off (4.2% at 0% cut-off). ECR Best Estimate…
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…
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 Capital Year Avg. Gross NORTHAB MM Volumes Wells NEBCNWAB 259.9 MM 175 MM Operated 709.5 80,250 195 13,450 boe/d 38,200 boe/d 55 wells 13 wells Non-Operated 50.7 12,250 44 REDWATER…
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…
DAWSON ASSET DETAILS Net Production: 28,260 boe/d (Q4 2011) (Gas 165 mmcfd; NGLs 697 bbls/d) Production split: 98% Gas 45 mmcfd Compressor Land: 129 Net Montney Station 120 mmcfd Sections Gas Plant Working Interest: 93%…
DAWSON DEVELOPMENT ECONOMICS Type Curve IP (1mo) MMcf/d 5.0 6,000 IP (12mo) MMcf/d 4.2 5,000 EUR (Bcf) 6.2 Gas Rate (Mcf/d) 4,000 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…
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 EUR Bcf 4.8 Gas Rate mcf/d 3,000 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…
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…
ATTACHIE
ATTACHIE NEW OPPORTUNITY H UNDEFINED POTENTIAL A R26 R25 R24 R23 R22 R21W6 I G Prospective land base of T86 1 6 1 6 1 6 1 ARC Wells 6 1 6 115 sections 36 31 36 31 36 31 36 31 36 31 Other Wells ARC has drilled three…
ANTE CREEK MONTNEY OIL SUCCESS
ANTE CREEK ASSET DETAILS R26 R25 R24 R23 R22W5 T69 T69 Net Production: 7,095 boed 1 6 J G 1 6 V E 1 C 6 1 6 (Q4 2011) 20.7 mmcfd; 3,648 bbls/d 36 31 L E G J 36 31 36 31 36 31 GJ FJ F C JFF G G G G C…
(boe/d) 0 100 200 300 400 500 600 700 100/01-31-65-23W5 100/07-07-66-24W5 Oil Gas 100/08-17-067-24W5 100/03-13-067-25W5 500 boe/d range 100/02-09-67-24W5 102/02-24-067-25W5 100/10-23-66-25W5 ANTE CREEK…
ANTE CREEK DEVELOPMENT ECONOMICS 450 Type Curve 400 IP (1mo) boe/d 385 350 Production Rate (BOE/d) IP (12mo) boe/d 235 300 EUR mboe 265 250 200 150 100 50 Type Curve 0 0 3 6 9 12 15 18 21 24 27 30 33 36 Months…
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 Forecast Forecast
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…
APPENDIX
HEDGE POSITIONS AS OF FEBRUARY 8, 2012 Summary of Hedge Positions as at February 8, 2012 (1)(2)(3) Q1 2012 Q2 2012 Q3 2012 Q4 2012 2012 2013 Crude Oil (US/bbl) US/bbl bbls/day US/bbl bbls/day US/bbl bbls/day US/bbl bbls/day US/bbl…
MAJOR PROPERTIES BY RESERVES 200 2011 Year End P+P Reserves - Major Properties 180 Reserves as of December 31, 2011* (mmboe) 160 - Proved Producing 209 (100 mmboe liquids, 655 bcf gas) 140 - Total Proved 360 (123 mmboe liquids, 1,419…
MAJOR PROPERTIES BY PRODUCTION (Q4 2011) 30,000 2011 Q4 Average Daily Production 25,000 Gas (boe/d) 20,000 Liquids (boe/d) (boe/d) 15,000 10,000 5,000 -
MONTNEY RESERVES SIGNIFICANT GROWTH 2P Reserves increased nearly 900% since 2007 2P NE B.C. Montney reserves comprise 59% of total 2P reserves DPIIP estimate increased to 25.5 Tcf (0% cut-off) from 10.1 Tcf in 2010 B.C. Montney…
HORIZONTAL WELLS - 30 DAY IP RATES DAWSON/PARKLAND 12000 ARC Others 10000 8000 Production Rate (mcf/d) ARC Wells Dawson/Parkland P50 5.1 Mmcf/d 6000 All Wells P50 3.4 Mmcf/d 4000 2000 0 1 111 221 331…
2012 CAPITAL PROGRAM ( Millions) 2010 2011 2012(b) Development 352 396 524 Development- Facilities 72 92 86 Maintenance 15 21 31 Optimization 11 14 16 Exploration & Seismic 24 94 56 Enhanced Oil Recovery (EOR) 17 20 28 Land 61…
2012 GUIDANCE Production 2010 (Actual) 2011(Actual) 2012 (Budget) Oil (bbls/d) 27,341 27,158 31,000 32,000 NGLs (bbls/d) 4,245 4,496 4,200 5,100 Gas (mmcf/d) 254 311 330 350 Total (boe/d) 73,954 83,416 90,000 95,000 Costs and Expenses…
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 recently extended to August 3, 2015…
ACCESS TO CAPITAL LONG-TERM DEBT As at December 31, 2011: Commitment Drawn Undrawn Fixed or Floating rate Credit Facility & Working Capital Credit Facility 1,025.0 323.8 701.2 Floating Private Notes: Long-term notes USD 300.8…
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 822 million allows for significant flexibility to repay…
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