ARC Resources Ltd. Bank of America Merrill Lynch Global Energy Conference November 14, 2012
CORPORATE OVERVIEW Production (2012 YTD) 92,800 boed Liquids 36,000 boed Natural gas 341 mmcfd Crude Oil Reserves (2P Gross) 572 mmboe NE BC/ NW AB Liquids-rich Gas 17 year RLI (1) Dry Gas NORTH AB Current monthly dividend 0.10…
2012 FINANCIAL AND OPERATIONAL PERFORMANCE Q3 2012 YTD 2012 (CDN millions, except per share and per boe amounts) 2012 2011 2012 2011 Production (boe/d) 89,511 85,178 92,814 80,517 Gas 60% 64% 61% 61% Liquids 40% 36% 39% 39% Revenue…
2012 FOCUS ON OIL AND LIQUIDS Oil and liquids comprised 40% of third quarter 2012 production while contributing 78% of third quarter revenue Drilled 106 gross operated wells year-to-date (99% oil and liquids-rich) Grew crude oil and…
VALUE PROPOSITION 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…
PRODUCTION GROWTH Production Growth - Montney and Non-Montney 100,000 Montney Gas (boe/d) Montney Oil/Liquids (bbls/d) Non-Montney Gas (boe/d) Non-Montney Liquids (boe/d) 80,000 Forecast Total Non-Montney production…
INCOME AND GROWTH ARC HAS DELIVERED BOTH ARC has a 16 year history of risk managed value creation - Provided a 18% annual total return since inception - Paid out 4.5 billion in total dividends - 28.38/share - Grown absolute…
Corporate 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,…
RISK MANAGED VALUE CREATION Understand our Advantaged Position Leverage our Advantaged Position Make time to Think Strategically Financial Operational Flexibility Excellence RISK MANAGED VALUE CREATION High Quality, Top…
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…
2013 Budget and Guidance
2013 BUDGET The 2013 Budget will: Focus on oil and liquids opportunities Invest in high rate of return natural gas opportunities to sustain current production Leverage dominant presence and technical expertise in resource plays…
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. NE BC - 324MM(1) 36 grossNE…
2013 BUDGET 2013/2014 Production Growth 2013 Budget - Volumes (BOED) All Properties PO DEV OPT EXPLORE 2014 base production, does 140,000 not show 2014 CAPEX program 120,000 100,000 80,000 Base Decline 22% Base Base…
2013 BUDGET FOCUS ON OIL AND LIQUIDS 91% of budget focused on oil/liquids drilling and infrastructure 2013 Capital by Commodity ( millions) 22 NE BC/NW AB 56 NORTHERN AB 171 581 75% spending on oil and 100% spending on oil…
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…
Pembina Revitalizing a Mature Oil Field
PEMBINA ASSET DETAILS Net production (boe/d) Q3 2012 11,300 Cardium production 80% Production split % (liquids/gas) 75%/25% Land (Cardium net sections) 132 Working Interest 78% Reserves (2P mmboe) Cardium 41.6 Reserve Life…
PEMBINA OIL AND LIQUIDS GROWTH ARC HAS GROWN LIQUIDS PRODUCTION IN THIS MATURE FIELD Pembina 19% Increase in Oil & Liquids Production since 2006 14,000 12,000 10,000 8,000 Boe/d Q3 2012 - 8,200 boe/d 6,000 Q1 2006 -…
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 &…
PEMBINA 2013 BUDGET 131MM 2013 Budget - Volumes (BOED) Operated and Non-Operated PO DEV OPT 14,000 12,000 10,000 8,000 Base DeclineBase 23%Decline 23% Base Decline 23% 6,000 4,000 Drill 54 gross operated wells…
Ante Creek A Montney Oil Success Story
ANTE CREEK ASSET DETAILS Net production (boe/d) Q3 2012 10,500 Liquids (bbls/d) 5,400 Gas (mmcf/d) 31 Production split % (liquids/gas) 50/50 Land (Montney net sections) 263 Working Interest 99% Reserves (2P mmboe) 47.2…
ANTE CREEK GROWING OIL AND LIQUIDS EXPANDED CAPACITY WILL FACILITATE GROWTH IN 2012/2013 Ante Creek 45% Increase in Liquids Production during 2012 12,000 10,000 gas oil & liquids 8,000 45% growth in Q4 2012 liquids production…
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…
ANTE CREEK 2013 BUDGET 186MM OPERATED 2013 Budget - Volumes (BOED) Operated PO DEV OPT 16,000 14,000 12,000 10,000 8,000 Base Decline 28% 6,000 Drill 34 wells and grow production to 15,000 boed by the end of 2013.…
British Columbia Montney Gas and Liquids
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 LANDS WORLD CLASS RESOURCE NE BC Montney lands are a major Blueberry growth engine. Significant opportunity to grow liquids production. Total BC Montney production of 240 mmcf/d with Dawson contributing approximately 160…
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% of TPIIP at 3% cut-off (4.2% at 0% cut-off). Best Estimate ECR estimated to be 4.1 Tcf resulting in…
ARC RESOURCES MONTNEY GAS WELLS EXCEEDING EXPECTATIONS ARCS MONTNEY GAS WELLS HAVE THE BEST INITIAL PRODUCTIVITY
Parkland/Tower Liquids Rich Gas
PARKLAND/TOWER EVALUATING POTENTIAL AND DEVELOPING EXISTING LANDS Parkland Tower Net production (boe/d) 7,200 800 Tower Liquids (bbls/d) 930 500 Gas (mmcf/d) 39 1.7 Land (net sections) 23 56 Working Interest 84% 90%…
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/PARKLAND 2013 BUDGET 249MM OPERATED 2013 Budget - Volumes (BOED) Operated PO DEV OPT 25,000 20,000 2014 base production, does not include 2014 CAPEX program 15,000 10,000 Base Decline 21% 5,000 Drill 24…
Dawson
DAWSON ASSET DETAILS Net production (boe/d) YTD 2012 25,300 Liquids (bbls/d) 700 Gas (mmcf/d) 160 45 mmcf/d Compressor Production split % (liquids/gas) 97% gas Station 120 mmcf/d Land (Montney net sections) 130 Gas Plant…
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…
DAWSON 2013 BUDGET 52MM OPERATED 2013 Budget - Volumes (BOED) Operated PO DEV 35,000 30,000 25,000 20,000 Base Decline 28% 15,000 10,000 5,000 Dawson is a world-class asset that continues to exceed expectations.…
Sunrise/Sunset/Sundown
SUNRISE/SUNSET/SUNDOWN ASSET DETAILS Net production (boe/d) Q3 2012 2,700 Attachie Production split % (liquids/gas) 100% gas Land (Montney net sections) 52 Working Interest 76% Tower Septimus Reserves (2P mmboe) 82.8 Parkland…
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 land position in top quality resource plays provides significant growth opportunity. Significant near-term oil…
PRODUCTION GROWTH Production Growth - Montney and Non-Montney 100,000 Montney Gas (boe/d) Montney Oil/Liquids (bbls/d) Non-Montney Gas (boe/d) Non-Montney Liquids (boe/d) 80,000 Forecast Total Non-Montney production…
Appendix
ACCESS TO CAPITAL DEBT Debt raised from three different sources: 1. Bank Credit Facility - 1.9 billion plus 25 million overdraft facility, 12 banks under facility nil drawn under credit facility as at September 30, 2012 The credit…
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 1.2 billion (after debt and equity proceeds) allows for…
HEDGE POSITIONS AS OF NOVEMBER 7, 2012 Summary of Hedge Positions as at November 7, 2012 (1) Nov Dec 2012 2013 2014 2015 - 2017 Crude Oil WTI (2): (US/bbl) US/bbl bbl/d US/bbl bbl/d US/bbl bbl/d US/bbl bbl/d Ceiling 91.11…
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…
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…
MONTNEY HORIZONTAL WELLS 30 DAY HZ IP RATES GLACIER - TOWN ARCS DAWSON/PARKLAND WELLS HAVE EXCEEDED EXPECTATIONS 14,000 12,000 10,000 Production Rate (mcf/d) ARC Others 8,000 ARC P50 5.2 Mmcf/d 6,000 Other Wells P50…
ATTACHIE NEW OPPORTUNITY UNDEFINED POTENTIAL Prospective land base of 117 sections ARC has drilled four 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…
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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