Corporate Profile Corporate Summary Production (Q3 2018) 135,410 boe/day Reserves (2P Gross – YE 2017) (1) 836 MMboe Reserve Life Index (2P) (1)(2) 17.4 years Monthly Dividend $0.05 per share Annualized Returns since Inception (3)…
Sustainable Dividend-paying E&P Company ARC’s Business Model Supports Profitable Future Growth Portfolio Montney land base is focused with inventory for decades of sustainable investment Balance Sheet 23-year history of…
Building Sustainable Businesses in the Montney Businesses Sustain Production and Generate Free Cash Flow at Low Reinvestment Rates Montney Businesses ~$575 Million Facility Investment $360 Million Facility Investment 540 MMcf/day of…
ARC Delivered through Its Transformation 2017 Monthly dividend of $0.05 per share Sold Saskatchewan assets Eliminated DRIP and SDP plans 118,671 boe per day 2018 Sustained Montney businesses Built 3,000 bbl per day battery at…
ARC’s Three-year Plan 2020 2021 Three-year Capital Investment Program Will Result in Meaningful Liquids Production and Cash Flow per Share Growth 2019 Execute capital program of $775 million Bring on Sunrise Phase II to full…
ARC’s Focus Has Improved – The Results Are Clear Delivering Industry-leading Returns via per Share Growth and Dividends Disciplined Capital Allocation Physical Market Access and Financial Risk Management Focus on Efficiency…
2018 & 2019 Guidance Investing in Infrastructure to Grow Liquids Production and Deliver Per Share Growth over the Long Term 2018 Guidance 2018 Revised Guidance (1) 2018 YTD Actuals 2019 Guidance (2) Production Crude oil (bbl/day)…
ARC’s continued focus on maintaining a strong balance sheet, targeting a 25 per cent payout ratio, improving capital efficiencies to preserve operating netbacks, targeting decline rates below 30 per cent, and delivering superior…
ARC’s Funding Model ARC’s current funding model includes the reinvestment of proceeds from 2016 and 2018 non-core dispositions, allowing ARC to fund infrastructure and profitably grow the business • Post Dawson Phase IV, ARC expects to…
2019 Budget of $775 Million Advances Projects to Deliver Near-term Annual Production of 135,000 to 142,000 boe per day and Multi-year Growth BC AB Attachie Red Creek Septimus Tower Parkland Sunset Sunrise Sundown Dawson Pouce…
Three-year Infrastructure Investment Plan ARC Will Advance Multiple Projects to Add Significant Processing Capacity; Production Will Grow into Development Projects Processing Capacity 2017 2018 2019 2020 2021 2022 Oil and Condensate…
Physical Marketing Activities ARC’s Crude Oil & Liquids Sales Mix Oil Condensate NGLs 80% of ARC’s liquids production is made up of oil and condensate 41% 39% 20% Crude Oil & Condensate Benchmark Pricing Mixed Sweet Blend WTI…
Natural Gas Integrated physical marketing and financial risk management strategies enable ARC to effectively execute on its long-term plans • Market Access – Firm transportation pipeline agreements to support existing production and…
Optionality in the Montney Significant Resource Potential • Total petroleum initially-in-place (1) identified across ARC’s NE BC and Pouce Coupe assets includes: • 10.5 billion barrels of tight oil • 106.0 Tcf of shale gas…
Multiple Layers to Develop Significant Future Delineation Opportunities with the Development of Efficient and Sustainable Resource Base Attachie Septimus Sunrise Tower Parkland Dawson Pouce Coupe Montney A Montney B Montney C…
Proven Development Model Inventory at All Stages Allows for Self-funding and Strong Full-cycle Returns across Portfolio Dawson Phase I & II Sunrise Phase I Attachie East Parkland/Tower Phase I & II Net Cash Flow + Sundown Attachie…
Competing Continentally ARC’s Efficient Cost Structure Competes with the Best Producers across North America ARC Tower Oil Single Well Economics Capital/Well Cdn$4.8MM Canadian 2P Finding & Development Cdn$7.91/boe ARC Sunrise Gas…
ARC Tower Oil vs. Permian Oil 2017 Netback Comparison (1)(2)(3) (Cdn$/boe) Price Differential & Basis on Gas and Liquids Mineral Production Tax & Royalties Gathering, Compression, Processing & Transport Lease Operating Expense…
DEVELOPMENT NOT VIABLE – RISKED DEVELOPMENT UNCLARIFIED – RISKED DEVELOPMENT PENDING – RISKED PROSPECTIVE RESOURCE – RISKED NE BC Montney Reserves and Risked Resources (1) Tremendous Development Potential from NE BC Montney Assets…
Early Stages of Property Development (1) • Pembina area has ~600 future drilling opportunities in the Cardium Large Identified Opportunity for Future Value Creation Total HZ Wells Drilled to YE 2017 2P Booked Undeveloped Locations…
Montney Development Economics Strong Rates of Return across the Montney Portfolio (1) IRR (half-cycle after-tax rate of return) run at US$60/bbl WTI and Cdn$2.00/GJ AECO flat pricing. (2) Breakeven prices are US$ per barrel WTI or Cdn$…
Greater Dawson Area – Lower Montney Investments 2017 Appraisal Activities and Subsequent 2018 Investments Unlocked Significant Opportunity to Grow Liquids Production Total Lower Montney Wells Drilled/Planned 2018 – 12 wells 2019 –…
Dawson D16-13 Dawson H03-15 Dawson K03-15 Medium Liquids High Liquids Parkland-Dawson – Proven Lower Montney Results Impressive Liquids Results Drove Decision to Interconnect Parkland and Dawson Fields Parkland-Dawson Lower Montney…
Attachie West – Strong Production Results Transferred Learnings between Tower and Attachie Has Resulted in Meaningful Improvements to Type Curves and Well Inventory Cumulative Oil & Condensate Production 100 Mbbl of liquids 450 MMcf…
Cost Management Focused assets, characterized by high working interest, operatorship and owned-and-operated facilities, provide control over costs and operations Low-cost Producers Deliver Superior Returns over Time (1) Three-year 2P…
Continuous Improvement in Safety Performance • ARC’s strong safety performance and capital efficiencies are the result of well-planned and executed operations • Improvements in safety performance are the result of ARC employees being…
ARC’s Attachie West Phase I Business Natural Gas Processing Capacity: 60 MMcf/day Condensate-handling Capacity: 10,000 bbl/day NGLs-handling Capacity: 4,000 bbl/day Profitably Investing in First Major Phase of Development While…
Attachie – Attachie West Phase I Sanctioned Attachie West is a leading development opportunity within ARC’s portfolio due to its: • Condensate-rich production profile • Significantly over-pressured reservoir • Extensive, contiguous…
Asset Details Net Production (boe/day) – Q3 2018 4,360 Liquids (bbl/day) 2,740 Gas (MMcf/day) 10 Land (Montney Net Sections) 306 Working Interest ~99% 2P Reserves (MMboe) 30 Liquids (MMbbl) 14.7 Gas (Bcf) 93 Reserve Life Index…
Dawson – Asset Details Focus on Liquids with Infrastructure Enhancements at Dawson Phase I & II and Dawson Phase IV (1) Reserve Life Index based on 2018 guided production. ARC 13-7 Phase III Gas Plant (90 MMcf/day & 7.5 Mbbl/day)…
Dawson – Development Potential Liquids-rich Development Layer Below Core Acreage Lower Montney Booked Reserves Upper Montney A Booked Reserves 0 200 400 600 800 Wells Drilled to YE 2017 Drilling Opportunities at YE 2017…
Parkland/Tower – Asset Details Profitable with Commodity Optionality: Oil, Condensate and Natural Gas; Parkland-Dawson Interconnect Commissioned in Q3 2018 Parkland Tower Net Production (boe/day) – Q3 2018 7,120 23,530 Liquids…
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 0 250 500 750 1,000 Wells…
Sunrise/Sunset – Asset Details Sunrise Phase II Completed Ahead of Schedule, Under Budget, and with an Excellent Safety Record (1) An initial 60 MMcf/day of gas processing capacity will be operational in the fourth quarter of 2018.…
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…
Ante Creek – Asset Details Significant Cash Flow with Substantial Growth Opportunities Including Facility Expansion Planned for Q2 2020 Net Production (boe/day) – Q3 2018 16,640 Liquids (bbl/day) 8,270 Gas (MMcf/day) 50 Production…
Wells Drilled 2P Booked Locations Ante Creek – Development Potential Large Land Base and Down-spacing = Significant Drilling Inventory ARC Montney Lands with 2P Reserves Booked as of YE 2017 ARC Montney Lands (1) ECR locations not…
Pembina – Asset Details High Working Interest of Light Oil Production, Competitive Operating Netbacks and Free Cash Flow Generation Net Production (boe/day) – Q3 2018 10,650 Liquids (bbl/day) 8,760 Gas (MMcf/day) 11 Land (Cardium Net…
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 and Market Access HSE and…
Record Produced Reserves Replacement in 2017 • 2017 development reserves adds largest in company history, with 320 per cent of produced reserves replaced • Montney assets have been the centerpiece to ARC’s strategy of organic reserves…
Key Reserve Information Reserves at year-end, December 31, 2017 • Proved Producing 230 MMboe • Total Proved 506 MMboe • Proved plus Probable 836 MMboe • Crude and Tight Oil 131 MMbbl • NGLs 73 MMbbl • Natural Gas 3.8 Tcf • 2P…
Risk Management Program • The fair value of ARC’s risk management contracts at September 30, 2018 was a net asset of $71.3 million Program Executed with a Long-term View (1) 2018 Forecast values based on actuals for the nine months…
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