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…
Delivering Full-cycle and Corporate Returns Efficiently Converting Resources into Earnings 0 2,000 4,000 6,000 8,000 0 6 12 18 24 30 36 Single Well Economics (Half-cycle) Proportional Facility and Appropriate Timing…
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 ?…
Long-term Plan Update Optimizing ARC?s Long-term Plan with a Focus on Profitability and Efficiency Montney Sustaining Capital Montney Sustaining Capital Montney Growth Capital Montney Growth Capital Cardium Capital Cardium…
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…
Montney Growth Engine ARC?s Montney Assets Are Strategically Located Geographic Optionality ? Proximity of ARC Montney land base enables: ? Capital and operating efficiencies ? Application of learnings across areas ? Holds ~1,200…
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…
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$…
? Significant drilling results and large inventory of future drilling locations provides support for favourable economics at Dawson Phase III, Dawson Phase IV, and Sunrise Phase II ? Sunrise Phase II economics have improved due to…
Creating Sustainable Businesses in the Montney ? ARC is investing in three infrastructure growth projects to grow production by ~50,000 boe/day over a 2.5-year period Businesses Will Sustain Production at Low Reinvestment Rates Field…
0.00 1.00 2.00 3.00 4.00 Appalachian Average ARC Dawson Gas Cdn$/Mcfe 2016 Netback Comparison (2)(3)(4) (Cdn$/Mcfe) ARC?s Gas Is Competing Continentally Superior Gas Economics in the Montney ARC Dawson Gas Single Well…
0.00 15.00 30.00 45.00 60.00 Permian Average ARC Tower Oil Cdn$/boe 2016 Netback Comparison (2)(3)(4) (Cdn$/boe) ARC?s North American Oil Competitiveness Competitive Cost Structure in the Montney WTI (Cdn$) ARC?s cash costs…
Physical Marketing Strategy Integrated Strategy Ensures Market Access at Optimal Netback Pricing ? Secure long-term pipeline contracts for future development opportunities Market Access ? Physical and financial diversification ?…
Natural Gas Diversification Strategy ? A combination of financial and physical diversification tools shift ARC?s natural gas price exposure to downstream pricing on a significant portion of our portfolio ARC Continues to Physically and…
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 ? 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…
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 ? Multi-layer Development Confidence in Predictability of Results Supports Magnitude of Resource and Next Stage of Development ARC Gas Plants ARC Wells Competitor Wells ARC 13-36 Gas Plant (60 MMcf/day) & Phase II Gas…
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 Pilots ? Planning for the Future Attachie West: ? 6 pilot wells are on production through third-party facilities ? 5 wells will be drilled in Q4 2017, including one Lower Montney pilot ? Secured takeaway on TCPL?s North…
Ante Creek ? Development Potential ? New well design, including monobore, cemented sleeves and pinpoint fracs, is showing improved results New Well Design Is Delivering Promising Upside and Has Extended Development Area ? Type curves…
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