Why Invest in ARC? A Differentiated Investment Financial Discipline High-quality Asset Portfolio Proven Execution and Development Model Operational and Organizational Excellence ? Sector-leading balance sheet ? Disciplined…
Corporate Profile Corporate Summary Production (Q2 2017) 113,410 boe/day Reserves (2P Gross ? YE 2016) (1) 737 MMboe Reserve Life Index (2P) (1)(2) 16.4 years Monthly Dividend $0.05 per share Annualized Returns since Inception (3)…
Q2 2017 Financial and Operating Highlights Financial Results ? Net income of $124.0 million ($0.35 per share) ? Funds from operations of $169.8 million ($0.48 per share) ? Strong financial position with net debt to annualized funds…
Guidance On Track to Meet Annual Production Guidance of 120,000 ? 124,000 boe/day 2017 Guidance 2017 Revised Guidance 2017 YTD Production Crude oil (bbl/d) 25,000 - 28,000 25,000 - 27,000 23,921 Condensate (bbl/d) 5,000 - 5,500…
ARC?s History and Future In the past 20 years, ARC has successfully achieved the following: 20-year History Has Set the Stage for Another 20+ Years of Value Creation $6 Billion of Distributions / Dividends & 13% Annualized Total…
Consistent and Sustainable Strategy Delivering on Our Strategy of Risk-managed Value Creation Montney Growth Assets RISKMANAGED VALUE CREATION High-Quality, Long-Life Assets Financial Flexibility HSE and Operational…
Financial Flexibility ? Objective to fully fund ARC?s dividend and sustaining capital from FFO over the long term ? Following the sale of certain non-core assets, ARC will outspend its cash inflows over the next two to three years ?…
Physical Marketing Strategy Ensuring Market Access at Optimal Netback Pricing Guiding Principles ? Proactively planning for future development opportunities ? Keep abreast of changing infrastructure environment Market Access ?…
ARC?s Crude Oil & Condensate Production Mix Crude Oil & Condensate Marketing ? Continued focus on Montney assets has resulted in ARC?s production mix being primarily light and medium crude oil grades and condensate ? Premium products…
ARC Continues to Physically and Financially Diversify to Downstream Markets to Achieve Optimal Pricing (4) Based on production assumptions for sanctioned projects. (5) ?Hedged? includes all physical and financial fixed price swaps and…
Environmental, Social & Governance Performance ARC?s Leadership Culture Is Reflected in Its ESG Practices Recognitions and Rankings: ? MSCI Global Sustainability Index ? Jantzi Social Index ? CDP Participant for eight consecutive…
Montney Growth Capital Montney Growth Capital Cardium Capital Non-core & Corporate Capital Cardium Capital Non-core & Corporate Capital 0 150 300 450 600 750 900 2017 Revised Budget Drilling & Completions Infrastructure…
Long-term Plan Update ? Project Resequencing ? Resequencing of projects to deliver improved capital efficiencies, greater production growth and enhanced long-term optionality ? Deliberate long-term planning and pace of asset…
Focused Asset Base Investing in Optionality in the Montney and Cardium BC AB Blueberry Red Creek Attachie Septimus Tower Parkland Sunset Sunrise Dawson Pouce Coupe Ante Creek Sundown Montney Overview Q2 2017 Average Daily…
Proven Development Model Inventory at All Stages Allows for Self-funding and Full-cycle ROACE Across Portfolio Dawson Phase I & II Sunrise Phase I Attachie Parkland/Tower Phase I & II Net Cash Flow + Blueberry Sundown Attachie…
Oil and Liquids Dry Gas Blueberry Red Creek Attachie Septimus Tower Parkland Sunset Sunrise Sundown Dawson Pouce Coupe Ante Creek 1,000m 2,000m 3,000m 1,000m 2,000m Montney Erosional Edge Lower Montney 10 kPa/m…
Multiple Layers to Develop Significant Future Delineation Opportunities Attachie Septimus Sunrise Tower Parkland Dawson Pouce Coupe Lower Montney Upper Montney Montney A Montney B Montney C Montney D Montney E Existing…
Lower Montney Potential Building Confidence in the Lower Montney Fairway (1) (1) Only Lower Montney wells are displayed. ARC Lower Montney wells with completion operations conducted during H1 2017 Existing ARC Lower Montney…
NE BC Montney Reserves and Risked Resources NE BC Montney TPIIP: 101.5 Tcf of Shale Gas and 10.5 Billion Barrels of Oil ? Independent Resources Evaluation conducted by GLJ effective December 31, 2016. ? Contingent Resource and…
0 400 800 1,200 1,600 Dawson Parkland / Tower Sunrise / Sunset Attachie Other Montney Number of Locations Total HZ Wells Drilled to YE2016 2P Booked Undeveloped Locations Development Pending ECR Booked Locations Development…
Montney Development Economics Strong Rates of Return Across the Montney Portfolio (1) IRR (half-cycle after-tax rate of return) run at US$50/bbl WTI and Cdn$2.50/GJ AECO flat pricing. (2) Breakeven prices are US$ per barrel WTI or Cdn$…
? Significant drilling results and large inventory of future drilling locations provides support for favourable economics at Dawson Phase III, Dawson Phase IV, and Sunrise Phase II ? Sunrise Phase II economics have improved due to…
Competing Continentally (1) Financial data from company reports. (2) Assumes exchange rate of Cdn$/US$1.3248 and US royalty rate of 25%. (3) Permian average includes: CPE, FANG, LPI, PE, PXD, RSPP. (4) Assumes exchange rate of…
Creating Sustainable Businesses in the Montney ? ARC is investing in three infrastructure growth projects to grow production by ~50,000 boe/day over a 2.5-year period Businesses Will Sustain Production at Low Reinvestment Rates Field…
Septimus (Phase I, II) Parkland/Tower (Phase III, IV) Attachie (West Phase I, II; Central Phase I, II; East Phase I, II) Ante Creek Expansion Sunrise (Phase II, III) Dawson (Phase III, IV, V) Base Cardium Production Base Montney…
Low-cost Producers Deliver Superior Returns over Time Group Average ARC Dawson Gas ARC NE BC Oil & Gas ARC ARC Group Average ARC Sunrise Gas ARC Dawson Gas ARC NE BC Oil & Gas ARC Sunrise Gas 500 1,000 1,500 2,000 2,500…
Significant Reduction in Drilling Times ? Utilizing state of the art technology to improve performance and to increase efficiencies Applying Learnings Across Portfolio for Reduced Drill Times and Cost Savings 0 1,000 2,000 3,000…
Investing in Learnings Applying Learnings across ARC?s Portfolio of Assets Integrating Learnings at All Stages of Development Further Our Understanding of the Asset Establish Project Sequencing Determine Well Designs…
Key Projects Update Advancing Projects across ARC?s Portfolio Key Projects Update Dawson ? Phase III started up, sanctioned Phase IV ? Delineating and proving up Lower Montney Parkland/Tower ? Refining development strategy and well…
Dawson ? Asset Details Poised for Next Stage of Development at Dawson Phase IV (1) Dawson Phase III Gas Plant was started up in mid-June 2017. The facility has 90 MMcf/day of gas processing and 7,500 bbl/day of liquids-handling…
Dawson ? Development Potential Significant Upside Remaining in Both Upper and Lower Montney Lower Montney 2P Reserves Booked as at December 31, 2016 Upper Montney Development Plan ARC Identified Drilling Locations ARC Wells ARC…
Dawson ? Upper Montney NGLs Potential ? Liquids ratio at Dawson varies across Upper and Lower Montney ? Majority of development to-date focused on the Upper Montney A, which has lower liquids yields (core is defined by yellow…
Dawson ? Phase I & II vs. Phase III New Area Development for Phase III ? Increased Liquids Content Driving Strong Economics ? Type curves are internal estimates based on analog wells and reservoir modeling. ? Assumed cycle time (from…
(100) (50) 0 50 100 150 200 250 2010 2011 2012 2013 2014 2015 2016 MMcfe/day $ millions Dawson ? Sustainable Cash Flow Model Low Reinvestment Ratio to Maintain Significant Free Cash Flow $3.91 $3.48 $2.28 $3.00 $4.19 $2.62…
Dawson Phase IV Sanctioning Leveraging Pre-investment in Dawson Phase III for Superior Capital Efficiencies in Dawson Phase IV Dawson Phase III Sanctioning Checklist Inventory High confidence Well Execution No concerns Facility…
Parkland/Tower ? Asset Details Building a Profitable Business Parkland Tower Net Production (boe/day) ? Q2 2017 9,470 14,170 Liquids (bbl/day) 2,010 7,760 Gas (MMcf/day) 45 38 Land (Montney Net Sections) 37 57 Working Interest ~90%…
Tower ? Strong Oil Production Industry-leading Oil Well Performance ? Type curves are internal estimates based on analog wells and reservoir modeling. ? Assumed cycle time (from spud to on-production): five months. ? Lateral length of…
Tower ? Optimizing Development Our Pace of Development Is Enabling Learnings to Be Incorporated in Subsequent Investments ? Type curves are internal estimates based on analog wells and reservoir modeling. ? Chart based on sales…
Sunrise/Sunset ? Asset Details Confidence in Predictability of Results Supports Magnitude of Resource and Next Stage of Development (1) Sunrise Phase II Gas Plant expansion includes 120 MMcf/day of incremental natural gas production…
Sunrise ? Multi-Layer Development Three-layer Development in Upper Montney ? Strong Reservoir, Low Capital and Plant Costs ? Type curves are internal estimates based on analog wells and reservoir modeling. ? Assumed cycle time (from…
0 2,000 4,000 6,000 8,000 0 10 20 30 40 50 60 Cumulative Gas (MMcf) Months on Production Sunrise ? Proven Performance Results in Upper Montney Horizon Validate Type Curves ? Type curves are internal estimates based on analog…
Sunrise Phase II Expansion Significant Natural Gas Resource Base with High Well Deliverability and Strong Full-cycle Economics Sunrise Phase I 60 MMcf/day sales capacity Phase II sales and processing capacity increased to 180…
Attachie ? Planning for the Future Taking Next Steps Forward at Attachie West Single-well Appraisals 2014 to 2017 Applying Learnings Multi-well Pad 2017 to 2018 Commercial Development 2019 to 2020 Applying Learnings & TCPL…
Ante Creek ? Asset Details Significant Cash Flow with Substantial Growth Opportunities Net Production (boe/day) ? Q2 2017 15,270 Liquids (bbl/day) 7,130 Gas (MMcf/day) 49 Production Split % (Liquids / Gas) 47% / 53% Land (Montney…
Ante Creek ? 2017 Plans New Well Design Is Delivering Promising Upside Key Metrics 2017 Type Curve DCET Capex/Well ($ millions) 3.8 Internal 2P Reserves (Mboe) 440 IP (1 month) (boe/day) 365 IP (12 months) (boe/day) 260 Half-cycle…
Ante Creek ? Development Potential ? Large land base and down-spacing has resulted in significant drilling inventory ? Continued delineation of Lower Montney prospect in southeast Ante Creek New Well Design Is Delivering Promising…
Pembina ? Asset Details High Working Interest of Light Oil Production, Competitive Operating Netbacks Net Production (boe/day) ? Q2 2017 10,760 Liquids (bbl/day) 8,770 Gas (MMcf/day) 12 Land (Cardium Net Sections) 218 Working…
Pembina ? Cardium Geology ? Future drilling will target the entire Cardium pay zone with a focus on the low-recovery bioturbated zone Optimizing Existing Production, Exploiting New Unconventional Reserves Pembina Cardium Schematic…
Pembina ? Inventory of Strong Cash Flow Locations Benefits from Half-cycle Economics as Infrastructure Is Already in Place Key Metrics 2017 Type Curve DCET Capex/Well ($ millions) 2.5 Internal 2P Reserves (Mboe) 200 IP (1 month)…
Pembina ? Outlook Founding Property Continuing to Deliver Value through Free Cash Flow Growth ? 2016 acquisitions increased ARC?s working interest which allows for control of pace of development and improved efficiencies through core…
Septimus (Phase I, II) Parkland/Tower (Phase III, IV) Attachie (West Phase I, II; Central Phase I, II; East Phase I, II) Ante Creek Expansion Sunrise (Phase II, III) Dawson (Phase III, IV, V) Base Cardium Production Base Montney…
Reserve Replacement ? Montney assets have been the centerpiece to ARC?s strategy of organic reserves and resource growth and provide continued upside potential ? Finding and development costs of $4.02/boe for proved plus probable…
0 200 400 600 800 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2P Reserves (MMboe) Natural Gas Liquids Key Reserve Information Reserves at year-end, December 31, 2016 ? Proved Producing 212 MMboe ? Total Proved 426 MMboe…
Dawson ? Development Potential Additional Development Layer Below Core Acreage Upper Montney Lower Montney Dawson Lower Montney Booked Reserves* Upper Montney A Booked Reserves* Existing Horizontal Wells, Pilots Existing…
Parkland/Tower ? Development Potential Incremental Reserves Potential With Multi-layer Development Upper Montney A Booked Reserves* Upper Montney A+ Booked Reserves* Lower Montney Booked Reserves* Upper Montney Lower Montney…
ARC Montney Lands ARC Montney Lands with 2P Reserves booked as of YE 2016 ARC Montney Lands with 2P Reserves booked as of YE 2016 0 250 500 750 Wells Drilled to YE 2016 Drilling Opportunities at YE 2016 Wells Drilling…
Q2 & H1 2017 Operating and Financial Highlights Key Performance Indicators for Q2 and H1 2017 Three Months Ended Six Months Ended (Cdn$ millions, except per share and per boe amounts) March 31, 2017 June 30, 2017 June 30, 2016 June 30,…
Canadian Benchmarking: 2017E Net Debt / 2017E Cash Flow (1)(2) 13.1x 15.8x E&P Leverage Analysis ARC Has One of the Strongest Balance Sheets in the Sector US Benchmarking: 2017E Net Debt / 2017E Cash Flow (1)(3) (1) Estimates as per…
? The fair value of ARC?s risk management contracts at June 30, 2017 was a net asset of $272.6 million Program Executed with a Long-term View (1) 2017 Forecast based on actuals for the six months ended June 30, 2017 and forecast for…
Risk Management Contract Positions Summary of Risk Management Contract Positions as at August 3, 2017 (1) H2 2017 2018 2019 2020 2021 Crude Oil ? WTI (2) US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day…
For further information about ARC Resources Ltd. please visit our website www.arcresources.com Or contact: Investor Relations E-mail: ir@arcresources.com T 403.503.8600 F 403.509.6417 Toll Free 1.888.272.4900 ARC Resources Ltd.…
FINANCIAL AND OPERATING HIGHLIGHTS ($ millions, except per share amounts) 2017 2016 2015 FINANCIAL Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Sales of crude oil, natural gas, condensate, NGLs and other income 297.0 309.2 331.8 265.6 234.9 231.2 285.9…
CORPORATE AND SHAREHOLDER INFORMATION DIRECTORS Harold N. Kvisle (1) Chairman Myron M. Stadnyk President and Chief Executive Officer David R. Collyer (2) (3) John P. Dielwart (2) (4) Fred J. Dyment (1) (3) Timothy J. Hearn (1)…
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