Peters & Co. Limited 2015 Energy Conference Profitable Gas Development September 15, 2015
Unique Strategy Risk Managed Value Creation is Central to ARCs Strategy Targeting net debt to funds Operating costs reduced by from operations between 20% since 2009: 1.0 1.5x 10.19/boe in 2009 8.05/boe in Q2 2015 200% Reserve…
Corporate Profile Corporate Summary Production (Q2 2015) 109,900 boe/day Reserves (2P Gross YE 2014) (1) 673 MMboe Reserve Life Index (2P) (1) 16 years (2) Annualized Dividend / Dividend Yield 1.20 per share / 6.1% (3) Annualized…
Risk Managed Value Creation Montney Assets Delivering Profitable Growth and Value 140,000 Production Profile 120,000 100,000 80,000 boe/d Forecast 60,000 40,000 20,000 0 Non-Montney Liquids Montney…
Growing Our Low Cost Gas Business 15% CAGR(1) Total Natural Gas Production 2009 2015 Forecast ARC divested of certain non-core, non-Montney shallow gas assets in 2014 and 2015 with associated production of approximately 4,800…
Operational Excellence Cost Management Low Cost Producers Deliver Superior Returns Over Time Focused assets, characterized by high working interest, operatorship and ARC owned/operated facilities, provides control over costs and…
Moving to a Lower Cost Model High-Grading Asset Base for Long-Term Efficiency and Cost Benefits Strategic divestment of certain non-core shallow gas assets in 2014 and 2015 leading to numerous benefits: Efficiency Gains Cost…
Sustainability Balancing Inflows and Outflows for Long-Term Sustainability Objective to fully fund ARC's Dividend and Sustaining Capital from Funds from Operations (FFO) over the long-term Profitable Growth Capital will be funded…
FOCUS ON MONTNEY GAS
Montney Growth Assets Growing our Montney Land Base ARC has added 165 net Montney sections since Q2 2014 70% of ARCs Montney land is undeveloped, providing significant future opportunity 120 Net Montney Sections in 2003 1,100 Net…
ARC in the Montney 33% Compound Annual Montney Growth - 5 Year Period 120,000 2015 100,000 Sunrise Gas Plant & Tower Liquid Expansion 2014 Parkland Gas Plant: Phase 1 80,000 boe/d 2012 Ante Creek Gas Plant 60,000…
NE BC Montney Reserves & Resources NE BC Montney TPIIP 67.4 Tcf of Gas and 2.3 Billion Barrels of Oil 2014 Resource evaluation conducted by GLJ saw significant growth in Gas TPIIP, which is mainly attributed to newly-acquired land in…
Multiple Layers to Develop Attachie Septimus Sunrise Tower Parkland Dawson Pouce Coupe Montney A Upper Montney Montney B Montney C Lower Montney Montney D Montney E Existing Horizontal Wells,…
Montney Development Economics Strong Rates of Return Across the Montney Gas Portfolio Parkland Dawson Sunrise Half Cycle Economics C55/bbl 55% IRR 95% IRR 65% IRR MSW 4.3x Recycle Ratio 5.0x Recycle Ratio 6.2x Recycle Ratio…
Competitive Montney Economics ARCs Montney Competes with Some of the Lowest Break-Evens Marcellus vs Montney Break-evens Assumes F/X Parity Break-even NYMEX (US/Mcf) Lowest Highest Source: ITG IR; raw data provided by Drilling…
NE BC/NW AB Montney First Year Cumulative Gas ARCs Montney Gas Wells Outperform Industry by 55% on First Year Average NE BC / NW AB Montney Gas Only First Year Cumulative 4,000 3,500 Others (1553 wells) 3,000 ARC (137 wells)…
Dawson Gas World Class Resource, Unlimited Potential Low Cost Superior Significant Gas Economics Resource Op cost 0.57/Mcf 95% IRR 13.7 Tcf C55/bbl & C3/GJ of gas resource F&D 0.60/Mcf Multi-layer Capital Breakeven…
Dawson A Cash Flow Machine Low Reinvestment Ratio to Maintain Significant Free Cash Flow Field Netback ( millions) Capex ( millions) 250 200 Net Cash Flow ( millions) 200 Production (MMcfe/d) 160 MMcfe/d 150 120…
Dawson Development Potential Additional Development Layer Below Core Acreage Dawson Dawson core development has been Upper focused on Upper Montney Montney A; 65% of Upper Montney A Booked Reserves* lands have reserves booked in…
Dawson Gas Type Curve Growth Frac Technology Advancements = Improvements in Well Performance Completions 2009- 2012 2013- 2015 2015 Type curve growth over time due to 2011 2014 Revised* improvements in well design, focused Frac…
Sunrise Long-term Growth Opportunity Significant Strong Four Layer Resource Economics Development 6.6 Tcf 65% IRR Currently producing of gas resource C55/bbl & C3/GJ from all four layers 2015 Growth Breakeven Low Cost…
Sunrise Development Potential Proven Productivity from Four-Layered Development Known reserves exist in Upper Montney A. 2014 Upper Montney A Booked Reserves* drilling program proved Upper Montney A+ Upper Montney…
Sunrise Outperforming Expectations Drilling Results Prove Four-Layer Development Model 10,000 2015 Type Curve (11.3 Bcf) 2013/14 Type Curve (11 Bcf) 9,000 2012 Type Curve (9.7 Bcf) Estelle July 6, 8,000 2011 Type Curve (7…
Colo Strategic Montney Infrastructure com cons Building Montney Infrastructure to Support Resource Development Tower Battery Coming 2015 Parkland Gas Plant On-Stream 2013 Attachie Tower Pouce Coupe Septimus Parkland…
Keys for a Low Cost Business Cost Competitiveness is Critical High Working Interest and Low Well Count = Manpower Efficiencies Low Cost Structure FD&A Costs Operating Costs Capital Efficiencies Facility Ownership Leads to Cost…
Looking Beyond 2016 Diverse Portfolio Provides Strategic Optionality ARC has a well balanced inventory of value creating opportunities which may be pursued beyond 2016 140,000 Project Options 2016 - 2020+ Production Profile…
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