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)…
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…
Executing through a Difficult Commodity Backdrop Since 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…
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…
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…
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…
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…
Creating a Sustainable Dividend-paying E&P Company Maintaining a Corporate Decline Rate That Competes with US E&P Companies (2) (1) Payout ratio is calculated as dividends before DRIP and SDP as a percentage of funds from operations.…
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…
2019 Budget of $775 Million Delivers Annual Production of 135,000 to 142,000 boe per day and Advances Multi-year Infrastructure Development Projects BC AB Attachie Red Creek Septimus Tower Parkland Sunset Sunrise Sundown Dawson…
Three-year Infrastructure Investment Plan Advancing Multiple Projects to Add Significant Processing Capacity; Production to Grow into Infrastructure Capacity over Time Projects Processing Capacity 2017 2018 2019 2020 2021 2022 Oil…
Physical Marketing Activities 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…
Physical Marketing Activities 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…
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 Condensate-rich Gas Optionality…
Geographic Optionality • Proximity of ARC Montney land base enables: • Capital and operating efficiencies • Application of learnings across areas • ARC holds ~1,120 net Montney sections (~730,000 acres) • Majority of lands 100%…
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…
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…
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…
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…
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 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…
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…
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…
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…
Why Invest in ARC? A Differentiated Investment with Tremendous Opportunity • Balance Sheet Strength • Full-cycle Returning Projects • Disciplined Execution • Managed Pace and Decline • Technology Deployment • Growth for Future…
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…
Multi-layer Development Potential 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…
Dawson – Asset Details Focus on Liquids with Infrastructure Enhancements at Dawson Phase I & II and Dawson Phase IV (1) Reserve Life Index based on 2019 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 Lower Montney Upper Montney Existing Horizontal Wells, Development Potential…
Parkland/Tower – Asset Details Profitable with Commodity Optionality: Oil, Condensate and Natural Gas Parkland (1) Tower Net Production (boe/day) – Q4 2018 9,880 20,350 Liquids (bbl/day) 2,760 8,850 Gas (MMcf/day) 43 69 Land…
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 Lower Montney Upper Montney…
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…
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 Upper Montney Lower Montney…
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)…
Ante Creek – Development Potential Large Land Base Presents Significant Drilling Inventory ARC Montney Lands with 2P Reserves Booked as of YE 2018 ARC Montney Lands Drilling Inventory 0 200 400 600 800 Wells Drilled to YE 2018…
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…
ARC’s HISTORY
ARC’s History and Future In the past 23 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…
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…
Non-Montney Crude Oil & Liquids (bbl/day) Montney Crude Oil & Liquids (bbl/day) Non-Montney Natural Gas (boe/day) Montney Natural Gas (boe/day) Transformation of Our Business Montney Transformation Has Allowed ARC to Manage a…
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…
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…
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…
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:…
APPENDIX
FINANCIAL AND OPERATIONAL HIGHLIGHTS FINANCIAL Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Sales of crude oil, natural gas, condensate, NGLs and other income 302.5 375.1 344.4 340.2 337.3 276.5 295.0 306.4 Per share, basic 0.86 1.06 0.97 0.96 0.95 0.78…
Total capital expenditures, including undeveloped land purchases 131.8 169.3 164.8 214.4 245.5 255.7 165.7 260.4 Acquisitions — — — 0.2 2.2 — 0.1 0.2 Dispositions (0.9) (96.2) (0.7) (98.3) — — — — Total capital expenditures, land…
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