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March 2019 Corporate Presentation – Arc Resources Ltd.

Arc Resources Ltd. · Mar 13, 2019 · 51 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 1
  2. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 2
    Corporate Profile Corporate Summary Production (Q4 2018) 136,502 boe/day Reserves (2P Gross – YE 2018) (1) 879 MMboe Reserve Life Index (2P) (1)(2) 17.4 years Monthly Dividend $0.05 per share Annualized Returns since Inception (3)…
  3. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 3
    2018 Results & 2019 Guidance 2018 Financial and Operational Results Were in Line, or Better Than, Guidance 2018 Guidance 2018 Actuals 2019 Guidance Production Crude oil (bbl/day) 23,000 - 24,000 23,460 18,000 - 22,000 Condensate…
  4. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 4
    Lookback to 2014 from operationSince 2014, ARC Has Delivered Long-term Shareholder Value with Its Share Count Unchanged since 2016 Dividends • >$1 billion in dividends • Current yield of 6% • Fully funded Production • Increased…
  5. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 5
    ARC Has Delivered on Its Commitments 2017 Monthly dividend of $0.05 per share Sold Saskatchewan assets Eliminated DRIP and SDP plans 118,671 boe per day 2018 2019 Bring on Sunrise Phase II to full capacity Progress multiple…
  6. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 6
    ARC’s Three-year Plan 2020 2021 Three-year Capital Investment Program Will Result in Meaningful Liquids Production and Cash Flow per Share Growth Maintain Share Count Bring on Dawson Phase IV in Q2 Bring on Ante Creek expansion in…
  7. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 7
    Building Sustainable Businesses in the Montney ARC’s Production Compound Annual Growth Rate from 2011 to 2018 Is 14 Per Cent after Adjusting for Dispositions Montney Businesses ~$575 Million Facility Investment $360 Million Facility…
  8. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 8
    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…
  9. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 9
    Creating a Sustainable Dividend-paying E&P Company 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…
  10. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 10
    • 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 • Once the productive capacity at Dawson Phase IV is…
  11. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 11
    2019 Budget of $775 Million Delivers Annual Production of 135,000 to 142,000 boe per day and Advances Multi-year Infrastructure Development Projects Attachie $184MM • 6 wells 3,000 boe/day Attachie West Phase I sanctioned and…
  12. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 12
    Three-year Infrastructure Investment Plan Advancing Multiple Projects to Add Significant Processing Capacity; Production to Grow into Infrastructure Capacity over Time Processing Capacity 2017 2018 2019 2020 2021 2022 Oil and…
  13. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 13
    Physical Marketing Activities 64% of ARC’s 2018 overall sales revenue derived from crude oil and liquids production Crude Oil & Condensate Benchmark Pricing ARC’s Crude Oil & Liquids Sales Mix 80% of ARC’s liquids production is made…
  14. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 14
    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…
  15. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 15
    Optionality in the Montney 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 Line…
  16. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 16
    Multiple Layers to Develop Significant Future Delineation Opportunities with the Efficient Development of Sustainable Resource Base Attachie Septimus Sunrise Tower Parkland Dawson Pouce Coupe Montney A Montney B Montney C…
  17. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 17
    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…
  18. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 18
    Montney Reserves and Risked Resources (1) Extensive Development Potential from Montney Assets with TPIIP of 14.3 Billion Barrels of Oil and 101.8 Tcf of Shale Gas Oil 17 MMbbl Condensate & NGLs 157 MMbbl 2.8 Tcf ECONOMIC CONTINGENT…
  19. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 19
    Large Inventory of Development Opportunities (1) • Pembina area has ~600 future drilling opportunities in the Cardium based on ARC’s internal evaluation GLJ Has Recognized over 3,500 Future Drilling Locations across ARC’s Montney…
  20. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 20
    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$…
  21. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 21
    Greater Dawson Area – Lower Montney Production Lower Montney CGRs Range from 25 to 200 bbl/MMcf Strong Liquids Results to Produce into Integrated Infrastructure of Greater Dawson Area Parkland F11-4 12 month cum: • 124 Mbbl…
  22. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 22
    Three-year FD&A Costs (2015 - 2017) (1)(2)(3) ($/boe) (1) Three-year 2P FD&A Costs (2015 - 2017) includes future development capital. Source: Peters & Co. “2017 Reserves Comparison – E&P Producers” April 4, 2018. (2) Refer to ARC’s…
  23. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 23
    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…
  24. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 24
    Strong 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 focused on safety and…
  25. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 25
    Environmental, Social & Governance Performance Responsible Development Has Shaped the Company We Are Today and Underpins Sustainable Future Growth For more information and to view our 2018 Sustainability Report, visit…
  26. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 26
    Why Invest in ARC? A Differentiated Investment with Tremendous Opportunity Top-tier Assets • Owned Infrastructure • Industry-leading Operational Efficiencies • Market Access • Concentrated Asset Base • Strong Expertise Balance…
  27. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 27
    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…
  28. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 28
    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…
  29. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 29
    Asset Details Net Production (boe/day) – Q4 2018 4,120 Liquids (bbl/day) 2,210 Gas (MMcf/day) 11 Land (Montney Net Sections) 306 Working Interest ~99% 2P Reserves (MMboe) 31 Liquids (MMbbl) 14.8 Gas (Bcf) 97 Reserve Life Index…
  30. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 30
    Dawson – Asset Details Focus on Liquids with Infrastructure Enhancements at Dawson Phase I & II and Dawson Phase IV Net Production (boe/day) – Q4 2018 47,390 Liquids (bbl/day) 4,660 Gas (MMcf/day) 256 Production Split % (Liquids /…
  31. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 31
    Dawson – Development Potential Liquids-rich Development Layer Below Core Acreage Development Unclarified ECR Locations Development Pending ECR Locations 2P Booked Locations Wells Drilled ARC Montney Lands with 2P Reserves Booked as…
  32. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 32
    Parkland/Tower – Asset Details Profitable with Commodity Optionality: Oil, Condensate and Natural Gas day) – Q4 2018 9,880 20,350 Liquids (bbl/day) 2,760 8,850 Gas (MMcf/day) 43 69 Land (Montney Net Sections) 37 57 Working Interest…
  33. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 33
    Parkland/Tower – Development Potential Incremental Reserves Potential With Multi-layer Development Tower Parkland Upper Montney A Booked Reserves Upper Montney A+ Booked Reserves Lower Montney Booked Reserves Lower Montney…
  34. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 34
    Sunrise/Sunset – Asset Details Sunrise Phase II: First 60 MMcf per Day of Processing Capacity in Service, Balance Expected to Be in Service in H1 2019 (1) The first 60 MMcf/day of gas processing capacity was in service in the fourth…
  35. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 35
    Sunrise – Development Potential Suited for Multi-layer Development Upper Montney A Booked Reserves Upper Montney A+ Booked Reserves Upper Montney B Booked Reserves Lower Montney Booked Reserves Lower Montney Upper Montney…
  36. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 36
    Ante Creek – Asset Details Strong Cash Flow Generating Asset with Facility Expansion Project Planned for Q2 2020 Net Production (boe/day) – Q4 2018 16,240 Liquids (bbl/day) 7,830 Gas (MMcf/day) 50 Production Split % (Liquids / Gas)…
  37. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 37
    Ante Creek – Development Potential Large Land Base Presents Significant Drilling Inventory Drilling Inventory Development Unclarified ECR Locations Development Pending ECR Locations 2P Booked Locations Wells Drilled Wells Drilled…
  38. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 38
    Pembina – Asset Details High Working Interest Light Oil Production, Competitive Operating Netbacks and Strong Cash Flow Generation Net Production (boe/day) – Q4 2018 10,660 Liquids (bbl/day) 8,830 Gas (MMcf/day) 11 Land (Cardium Net…
  39. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 39
  40. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 40
    ARC’s History and Future In the past 22 years, ARC has successfully achieved the following: Strong Foundation for Continued Success $6.4 Billion of Distributions / Dividends & 10% Annualized Total Return (2) Stayed within Target…
  41. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 41
    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…
  42. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 42
    Transformation of Our Business Montney Transformation Has Allowed ARC to Manage a Profitable Business through Commodity Price Cycles 2018 Payout Ratio of 26% Return on Average Capital Employed (1) Cumulative Dividends and Historic…
  43. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 43
    Record Produced Reserves Replacement in 2018 • Strong 2018 development 2P reserve adds, with 245 per cent of produced reserves replaced • Montney assets have been the centrepiece to ARC’s strategy of organic reserves and resource…
  44. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 44
    Key Reserve Information • Proved Producing 244 MMboe • Total Proved 551 MMboe • Proved plus Probable 879 MMboe • Crude and Tight Oil 98 MMbbl • NGLs 107 MMbbl • Natural Gas 4.0 Tcf • 2P Reserve Life Index (1) 17.4 years Year-end…
  45. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 45
    Risk Management Program • The fair value of ARC’s risk management contracts at December 31, 2018 was a net asset of $266.2 million Program Executed with a Long-term View (1) 2019 to 2023 Forecast values based on the forward price curve…
  46. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 46
    Risk Management Contract Positions at February 7, 2019 2019 2020 2021 2022 2023 2024 Crude Oil – WTI (2) US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day Ceiling 65.78 4,000 61.91 2,000 -…
  47. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 47
    Recognitions and Rankings • MSCI Global Sustainability Index • Jantzi Social Index • FTSE Russell’s FTSE4Good Index Series • CDP Participant for nine consecutive years • Joined the 30% Club in 2018 • Globe and Mail Board Games:…
  48. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 48
  49. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 49
    FINANCIAL AND OPERATIONAL HIGHLIGHTS ($ millions, except per share amounts) 2018 2017 FINANCIAL Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Sales of crude oil, natural gas, condensate, NGLs and other income 302.5 375.1 344.4 340.2 337.3 276.5 295.0…
  50. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 50
    CAPITAL EXPENDITURES Geological and geophysical 1.3 3.4 2.1 4.0 2.5 1.8 2.0 3.2 Drilling and completions 60.5 114.2 102.6 139.1 154.8 119.3 105.9 171.6 Plant and facilities 69.6 51.2 58.8 70.0 87.2 55.5 41.6 78.4 Administrative assets…
  51. March 2019 Corporate Presentation – Arc Resources Ltd. – slide 51
    OPERATING Production Crude oil (bbl/day) 20,092 23,867 24,893 25,037 24,641 25,020 23,813 24,030 Condensate (bbl/day) 8,458 8,158 6,960 5,505 6,989 6,815 4,253 4,504 Natural gas (MMcf/day) 603.3 574.2 537.9 564.9 572.4 549.6 483.9…

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