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 (Q3 2017) 129,526 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)…
Q3 2017 Financial and Operating Highlights Financial Results ? Net income of $48.5 million ($0.14 per share) ? Funds from operations of $163.8 million ($0.46 per share) ? Strong financial position with net debt to annualized funds…
Our Plan 2017 Reduced the dividend Sold Saskatchewan assets Eliminated DRIP and SDP plans 118,000 boe per day 2018 Sustain Montney businesses Progress Sunrise Phase II Advance Attachie piloting activities 130,000 to…
2017 and 2018 Guidance Focused on Profitability and Long-term Value Creation 2017 Revised Guidance (1) 2017 YTD 2018 Guidance Production Crude oil (bbl/d) 25,000 - 27,000 24,291 25,000 - 27,000 Condensate (bbl/d) 5,000 - 5,500 5,199…
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 $6.1 Billion of Distributions / Dividends & 12% 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…
Sunrise Type Curves & Single-well Economics (Half-cycle) 8,000 6,000 4,000 2,000 0 0 ? 2018 Type Curve (New Well Design: 2,440 m) ? 2017 Type Curve (Previous Well Design: 2,000 m) 10 20 30 40 Months on Production…
ARC?s Funding Model ? Objective is to fully fund ARC?s dividend and sustaining capital with funds from operations over the long term ? ARC will continue to review non-core dispositions to bridge funding gap ? ARC currently has a…
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 ?…
49% 12% 38% 1% 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…
ARC Continues to Physically and Financially Diversify to Downstream Markets to Achieve Optimal Pricing Malin $2.86 $0.17 $0.53 $2.16 Henry Hub Sumas $2.77 $0.12 $0.27 $2.38 Station 2 $1.52 $0.12 $1.40 Chicago $3.08…
ARC Natural Gas Price Diversification (4)(5) Hedged AECO Floating Station 2 Floating Midwest US Floating Henry Hub Floating Pac-NW US Floating Dawn Floating 15% 4% 11% 21% 23% 9% 9% 7% 10% 31% 30% 26% 24% 9% 11% 2% 4% 7%…
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…
2018 Budget of $690 Million Capital Budget Focuses on Overall Capital Efficiency and Profitability and Delivers Production of 130,000 to 134,000 boe per day BC AB Blueberry Attachie Red Creek Septimus Tower Parkland Sunset…
2018 Guidance Focused on Profitability and Long-term Value Creation $690 million Invest to drill 64 gross Allowing ARC to: While managing operating costs at $6.50 ? $6.90/boe Maintain Balance Sheet Strength Facilitate an Orderly…
Focused Asset Base Investing in Optionality in the Montney and Cardium BC AB Blueberry Red Creek Attachie Septimus Tower SunsetParkland Sunrise Dawson Pouce Coupe Ante Creek Northeast Sundown British Columbia Northern…
Proven Development Model Inventory at All Stages Allows for Self-funding and Full-cycle Returns across Portfolio Dawson Phase I & II Sunrise Phase I Attachie East Parkland/Tower Phase I & II Net Cash Flow + Blueberry Sundown…
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 Montney A Montney B Montney C Montney D Montney E Existing Horizontal Wells, Development…
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…
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$…
Montney Full-cycle Economics Robust Project Economics for Next Growth Platforms ? Significant drilling results and large inventory of future drilling locations provides support for favourable economics at Dawson Phase III, Sunrise…
ARC\'s Efficient Cost Structure Competes with the Best Producers across North America ARC Tower Oil Single Well Economics ARC Sunrise Gas Capital/Well Cdn$4.8MM Canadian 2P Finding & Development Cdn$7.91/boe Capital/Well…
Building Sustainable Businesses in the Montney Businesses Sustain Production and Generate Free Cash Flow at Low Reinvestment Rates 0 30,000 60,000 90,000 120,000 150,000 2009 Non-core Dispositions 2010 2011 2012 2013 2015 2015…
Montney Cash Flow Models ? ARC is investing in three infrastructure growth projects to grow production by ~40,000 to 50,000 boe/day over a 2.5-year period Next Three Growth Projects Will Contribute Significant Free Cash Flow Field…
ARC?s Strong Pipeline of Projects Depth of Portfolio Will Support Profitable Development in the Montney and the Cardium 2017 Montney Capital Efficiencies: ? Sustaining: ~$9,000/boe/day ? Gas Development: ~$6,500 to $9,000/boe/day ?…
Montney Assets Deliver Profitable Growth and Value 014 Quality Assets and Capital Discipline Has Resulted in >600% Montney Production Growth since 2009 150,000 120,000 60,000 CP.Gik O 60,000 130/0 since inception in 1996 to Q3…
500 1,000 1,500 2,000 2,500 2014 2015 2016 Completion $/Tonne Completion Cost per Tonne in NE BC 0 400 800 1,200 1,600 2014 2015 2016 $/Lateral Foot Drilled Drilling Cost per Lateral Foot in NE BC 40% Reduction…
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…
Montney Exploitation Approach Improves Efficiencies ARC Has Advanced Its Understanding of the Full-stack Development Potential for All Project Areas in Order to Execute Efficiently (1) Represents Sunrise full-stack model. Spacing and…
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 Sunrise ? FEED investments and initial earthwork at Sunrise Phase II; repatriate third-party volumes in 2019 ? Piloting fifth layer of development…
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 Testing Four-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…
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…
Dawson ? Asset Details Poised for Next Stage of Development at Dawson Phase IV (1) Dawson Phase III Gas Plant was started up in June 2017. The facility has 90 MMcf/day of gas processing and 7,500 bbl/day of liquids-handling capacity.…
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…
0 2,000 4,000 6,000 8,000 0 6 12 18 24 30 36 Production Rate (Mcf/day) Months on Production 24 to 32 bbl/MMcf * 5 bbl/MMcf Dawson ? Phase I & II vs. Phase III & IV New Area Development for Phase III ? Increased Liquids Content…
Dawson-Parkland ? 2017 Lower Montney Results Strong Results from 2017 Lower Montney Appraisal Program Setting the Stage for 2018 Development Activities 0 250 500 750 1,000 1,250 1,500 0 50 100 150 200 250 300 Cumulative Gas…
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…
0 50 100 150 200 250 (150) (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…
Parkland/Tower ? Asset Details Building a Profitable Business Parkland Tower Net Production (boe/day) ? Q3 2017 9,870 19,170 Liquids (bbl/day) 2,460 10,130 Gas (MMcf/day) 44 54 Land (Montney Net Sections) 37 57 Working Interest…
0 1,500 3,000 4,500 6,000 0 5 10 15 20 25 30 35 40 Gas Production Rate (Mcf/day) Months on Production Parkland ? 2018 Upper Montney Development Liquids-rich Natural Gas Wells to Complement Tower Development Key Metrics 2018 Type…
Tower ? Strong Oil Production Industry-leading Oil Well Asset ? 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 1,750…
0 25 50 75 100 125 150 0 100 200 300 400 500 600 Cumulative Oil & Condensate Production (Mbbl) Days on Production Attachie 4-20 Attachie 13-14 Tower 7-12 West Tower 12-16 East Tower & Attachie ? Integrated Learnings…
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) ? Q3 2017 15,760 Liquids (bbl/day) 7,370 Gas (MMcf/day) 50 Production Split % (Liquids / Gas) 47% / 53% Land (Montney…
Ante Creek ? New Well Design New Well Design Is Delivering Upside Key Metrics 2018 Type Curve DCET Capex/Well ($ millions) 4.0 Internal 2P Reserves (Mboe) 600 IP (1 month) (boe/day) 490 IP (12 months) (boe/day) 330 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) ? Q3 2017 10,300 Liquids (bbl/day) 8,340 Gas (MMcf/day) 12 Land (Cardium Net Sections) 219 Working…
Transformation Has Allowed ARC to Manage a Profitable Business through the Cycles Production Split 100% 75% 50% 25% 25% 20% 15% 10% 5% 0% (5%) (10%) 0% Transition to the Montney Montney Growth Production 2009…
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 $4.02/boe for proved plus probable…
0 200 400 600 800 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2P Reserves (MMboe) Natural Gas Liquids Key Reserve Information Reserves at year-end, December 31, 2016 ? Proved Producing 212 MMboe ? Total Proved 426 MMboe…
Dawson ? Development Potential Additional Development Layer Below Core Acreage Lower Montney Booked Reserves Upper Montney A Booked Reserves ARC Montney Lands ARC Montney Lands with 2P Reserves booked as of YE 2016 ARC Montney…
Parkland/Tower ? Development Potential Incremental Reserves Potential With Multi-layer Development Upper Montney A Booked Reserves Upper Montney A+ Booked Reserves Lower Montney Booked Reserves ARC Montney Lands ARC Montney Lands…
Sunrise ? Development Potential Proven Productivity from Four-layered Development, Piloting Six-layered Development Upper Montney A Booked Reserves Upper Montney A+ Booked Reserves Upper Montney B Booked Reserves Lower Montney…
0 100 200 Wells Drilled to YE 2016 Drilling Opportunities at YE 2016 Wells Drilling Inventory Wells Drilled 2P Booked Locations Ante Creek ? Development Potential Large Land Base and Down-spacing = Significant Drilling…
Q3 & YTD 2017 Operating and Financial Highlights Key Performance Indicators for Q3 and YTD 2017 Three Months Ended Nine Months Ended (Cdn$ millions, except per share and per boe amounts) June 30, 2017 September 30, 2017 September…
Canadian Benchmarking: 2017E Year-end 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 Year-end Net Debt / 2017E Cash Flow (1)(3)…
50) 0 50 100 150 200 250 2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F $ millions Realized Gains (Losses) on Risk Management Contracts (1)(2)(3) Crude Oil Natural Gas Foreign Exchange & Power Total…
Risk Management Contract Positions Summary of Risk Management Contract Positions as at November 9, 2017 (1) Q4 2017 2018 2019 2020 2021 2022 Crude Oil ? WTI (2) US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day US$/bbl…
Definitions of Oil and Gas Reserves and Resources Project Maturity Subclass Development Unclarified as a contingent resources that requires further appraisal to clarify the potential for development and has been assigned a lower chance…
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.…
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