Bank of America Merrill Lynch 2011 Global Energy Conference Miami November, 2011
ARC RESOURCES Launched July 1996 as ARC Energy Trust -19% annual return since inception (to October 31) - Current dividend 0.10 per month - 27.18 per share in total dividends (to October 31) -Total dividends of 4.1 billion (to…
WHY INVEST IN ARC RESOURCES Production History Top-tier, growth plus income opportunity Balance sheet strength, with hedges 100,000 Gas Liquids providing near-term stability 80,000 Experienced management team BOE/D…
INCOME AND GROWTH BOTH ARE POSSIBLE ARC has a 15 year history of risk managed value creation - Provided a 19% annual return since inception - Paid out 4.1 billion in total dividends - 27.18 / share - Grown absolute production from…
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 SHARE (ADJUSTED) An investor who participated in the dividend re-investment plan since inception would have enjoyed a 10% compound annual growth in the reserves attributed to their…
2012 CAPITAL PROGRAM ( Millions) 2010 (actual) 2011(e) 2012(b) Development 352 395 524 Development Facilities 72 100 86 Maintenance 15 20 31 Optimization 11 15 16 Exploration & Seismic 24 93 56 Enhanced Oil Recovery (EOR) 17 19 28…
Total Company 2012 BUDGET ARCS OPPORTUNITIES Capital Year Avg. Gross NORTHAB MM Volumes Wells NEBCNWAB 259.9 MM Operated 709.5 80,250 195 175 MM 13,450 boe/d 38,200 boe/d 55 wells Non-Operated 50.7 12,250 44 13 wells Total…
2012 BUDGET ALL PROPERTIES- 760 MM 15%
Total Company 2012 BUDGET 94% WILL BE HORIZONTAL WELLS NORTHERN AB TOTAL OPERATED 2011 6 NE BC / NW AB 12 Horizontal 1 49 Vertical REDWATER 183 12 10 94% of wells are Horizontal PEMBINA 2 SE SK / MB 41 S AB / SW SK…
PROPERTY OVERVIEW
BRITISH COLUMBIA MONTNEY
MONTNEY LANDS MAJOR GROWTH ENGINE Dawson and the West Montney lands are a significant growth engine for ARC With greater than 10 Tcf of gas classified as DGIIP, ARCs current plans call for 0.8 Tcf the construction of two 60…
MONTNEY PRODUCTION ARC IS CURRENTLY THIRD LARGEST 500 Field (mmcfe) 450 Dawson 165 400 350 Parkland 48 300 Pouce 15 250 Sunrise* 23 200 Total 250 150 *non-operated 100 50 0 Source: BMO Report (Geoscout) (May production)
HORIZONTAL WELLS 30 DAY IP RATES JULY 2011: Glacier - Town 12000 10000 ARC Others 8000 Production Rate (mcf/d) ARC P50 6000 P50 4000 2000 0 1 108 215 322 429 536 643 P50 All Wells 3.4 mmcf/d Dawson/…
DAWSON DEEP INVENTORY OF WELLS READY FOR PRODUCTION Status Vertical Horizontal Total Producing 2 44 46 Shut In 74 18 92 Drilled (not completed) 1 3 4 Tied In (have not been on production) 0 8 8 Completed (completed not tied…
DAWSON DEVELOPMENT ECONOMICS P10 Type Curve P90 7,000 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 6 8…
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 Theoretical Liquid Yield (BBLS/MMCF)…
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…
TOWER LIQUID RICH OPPORTUNITY Northern portion of the R18 R17 R16 16 15 14 13 18 17 16 15 14 13 18 17 16 15 14 13 T82 9 12 T82 Parkland property is in 10 11 12 7 8 9 10 11 12 7 8 9 10 11 U liquids rich window 4 C 3 2…
WEST MONTNEY RESOURCE 5.5 TCF GAS 5.5 Tcf of gas classified as DGIIP in Septimus, Sunrise/Sunset and Sundown - P+P Reserves of 253 Bcf at year-end 2010 (approximately 5 per 5.5 Tcf cent of DGIIP) Current production of…
ATTACHIE
ATTACHIE NEW OPPORTUNITY A UNDEFINED POTENTIAL I R26 R25 R24 R23 R22 R21W6 Prospective land C V T86 I C G base of 106 sections 1 6 1 6 1 6 1 6 1 6 36 31 36 31 36 31 36 31 36 31 First horizontal well G G…
MONTNEY GROWTH POTENTIAL 450 Actual Projection 400 Undefined 350 Next - Attachie, Sunrise Phase 2 300 Dawson, Tower Sunrise Phase 1 Sunrise/Sunset 250 Sunrise Pilot 200 Parkland Base Parkland 150 Dawson Phase 2 100 Dawson…
ANTE CREEK ANOTHER MONTNEY SUCCESS
ANTE CREEK - ANOTHER MONTNEY SUCCESS ARC entered the Ante Creek area through an acquisition in late 2000 and has since completed several acquisitions to build a 265 gross (257 net) section land base. Horizontal multi stage…
ANTE CREEK - ANOTHER MONTNEY GROWTH STORY 9,000 Gas 8,000 Liquids 7,000 Acquisitions 6,000 5,000 4,000 3,000 2,000 1,000 - 2011 01 2011 04 2007 07 2009 04 2001 01 2001 04 2001 07 2001 10 2002 01 2002 04…
30 Day IP Gas and Oil Rates (boe/d) 0 100 200 300 400 500 600 700 800 900 00/11-24-065-25W5 00/05-13-065-25W5 00/08-17-067-24W5 00/06-23-065-25W5 02/02-24-067-25W5 00/05-10-066-25W5 00/10-26-066-25W5 ANTE CREEK…
ANTE CREEK MEASURED INITIAL PRESSURE HORIZONTAL WELLS Ante Creek North Triassic E Pool 18000 16000 14000 12000 Pool Virgin Pressure (kPa) Pressure = 16.3MPa 10000 8000 Infill Horizontals Encountering Initial Pressure…
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…
SUMMARY
ARC RESOURCES A 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 income to our investors Near-term…
APPENDIX
Q3 2011 OPERATING PERFORMANCE ( millions except per share and per boe numbers) Q3 2011 Q3 2010 Change Funds from operations 213.5 167.7 27% Per share 0.74 0.63 17% Earnings 120.8 90.3 34% Per share 0.42 0.34 24% Dividends 86.2 80.3…
HEDGING UPDATE AS OF OCTOBER 31, 2011 Strong hedge position for 2012 Liquids 2011 2012 Oil (bbls/d) 20,000 16,000 Bought Call (US/bbl) (partial volumes) - 115.00 Sold Call (US/bbl)* 89.19 90.00 Bought Put (US/bbl) 84.19 90.00 Sold…
MONTNEY LANDS MAJOR GROWTH ENGINE ARCs independent reserves evaluator assessed the resource potential of our main BC Montney lands, excluding Attachie, Tower and Doe. Based on a 3% porosity cut-off: Reserves and Resources - December…
MONTNEY LANDS MAJOR GROWTH ENGINE Lands evaluated to date are just a fraction of our total Montney lands ARC uses a 3% porosity cut-off, currently reassessing at lower cut-offs (industry 0 3%) Area Net Acres Net DGIIP Reserves Net…
BC MONTNEY WELLS ARC IS THIRD MOST ACTIVE DRILLER 400 350 300 250 200 150 100 50 0 BCOGC ; Top 35 Montney Operators Since 2003 (Montney and Doig Targets) Wells Rig Released
MONTNEY REGIONAL SCHEMATIC CROSS SECTION X Y Total Net Pay3% (m) 103 78 43 36 Total Net Pay6% (m) 30 2 23 4 DGIIP (BCF/Section)* 100 60 45 20 A Y Lower Upper Montney B Montney X E [1] Discovered Gas Initially in Place…
DAWSON PRODUCTION 165 MMCF/D IN Q2 2011 180.0 Production through Phase 1 was temporarily interrupted during 150.0 the integration of Phase 2 mmcf/d 120.0 90.0 60.0 30.0 0.0 First 60 mmcf/d gas plant on stream May 2010,…
DAWSON TEST RESULTS STAY STRONG Post 2008, ARCs Dawson completions were considerably improved with both an increase in test rates and test pressures
DAWSON STAYING FLAT LONGER ARC typically restricts production rates to approximately 5.4 mmcf per day. Over the past 2 years, the length of time that the Dawson wells are producing at greater than 5 mmcf/d has increased.…
2011 DAWSON GAS PLANT Dawson 5-35 Gas Plant (Phase 2) Construction was completed on time and on budget Early April 2011 start-up of Phase 2 Dawson plant, with full production by the end of the month Progress of the gas plant…
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…
PEMBINA CARDIUM
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 Pembina Area Activity 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 THIRD MONTH: INITIAL PRODUCTION RATES ALL WELLS Cardium Area Initial Production Average (Month 3) Rate ARCs Wells Median Well approximately 140 b/d
PEMBINA THIRD MONTH: INITIAL PRODUCTION RATES ARC WELLS ARCs Cardium Area Initial Production Average (Month 3) Rate MEDIAN (boe/d) 2009 165 2010 171 2011 180
HORIZONTAL WELL RESULTS Given the vertical and horizontal variability in the reservoir, it is not surprising that there is great variability in production results
SWAN HILLS Testing various parts of the reef on non-operated lands 8 (gross) partner wells drilled in 2010 12 (gross) partner wells planned for 2011 2011 Budget on operated lands 2 horizontal wells 2 multi-stage acid frac…
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