ARC Resources Ltd. Investor Presentation Photo Caption copy area November 2023
Corporate Profile Premium investment opportunity for Montney exposure, one of the most profitable assets in North America 1 Shares outstanding 609 million 2 Canadas Market capitalization 13.7 billion largest Long-term debt 1…
Scale in a World-class Resource Play Largest Montney producer, Canadas largest condensate producer and 3rd largest gas producer Mboe/day BC and Alberta Montney Producers Mbbl/day Montney Condensate & Liquids Producers 400 160…
Transformation to the Largest Montney Producer Large concentrated asset base drives efficiency, well positioned for the future 2014 2023 NEBC Pouce Prestville Valhalla Chinchaga 1 million Hotchkiss NEBC Montney acres Hawk Hills 1…
Investment Case for ARC Disciplined Growth Five-year plan to more than double free funds flow per share Achieved by unlocking Montney development and reducing the share count Speaker: Dale Commitment to Shareholder Returns…
2024 Capital Budget
2024 Guidance Production & Expenses 2024 Guidance Production Crude oil and condensate (bbl/day) 87,000 - 91,500 Natural gas (MMcf/day) 1,325 1,340 NGLs (bbl/day) 42,000 - 45,000 Total production (boe/day) 350,000 - 360,000 Expenses…
2024 Guidance Capital Expenditures & Production Attachie 600 MM1 Ante Creek 2,500 boe/day 50MM 14 wells 18,000 boe/day Greater Dawson 260 MM 36 wells Kakwa 95,000 boe/day 630MM 42 wells 175,000 boe/day Sunrise 115MM 11…
Dawson III & IV, BC Strategic Overview and Long-term Plan
Five-Year Outlook Delivers Significant Value Disciplined plan to grow free funds flow per share1 Boe/day Base Production Attachie I Attachie II 425,000 400,000 130% Free Funds Flow Per Share Growth 375,000 (20% CAGR4) 350,000…
Long-term Resource Optionality Unmatched inventory runway in a world-class asset Boe/d Production Outlook 600,000 500,000 400,000 300,000 200,000 100,000 0 2023 2024 2025 2026 2027 2028 Gas NGL Condensate Future…
Global Leader in Responsible Energy Development Providing reliable, affordable and sustainable energy to global demand markets Targeting up to 25% Exposure to International Pricing 12
Kakwa, AB Capital Allocation
Track Record of Capital Discipline A disciplined investment framework fundamental to profitable growth Return on Average Capital Employed1 40% 30% Average 12% 20% 10% 0% -10% -20% 14 1) Non-GAAP Financial…
Capital Allocation Lower reinvestment requirement allows for profitable growth and superior return on capital Reinvestment Rate1 2 Reinvestment Rate Average (Build Out & De-Risk Phase) Average (Staged Development) 120% 100%…
Five-Year Outlook Disciplined investment drives free funds flow per share growth Capital Expenditures1 2 Free Funds Flow2 millions millions 2,000 3,000 WTI 50/AECO 2.50/GJ WTI 70/ AECO 3.50/GJ WTI 80/AECO 4.50/GJ 1,000 2,500…
Free Funds Flow Per Share1 2 Growth Sustainable per share growth per share 5.00 4.00 3.00 2.00 1.00 0.00 2023 2025 2028 Montney investment and share repurchases drive 20% free funds flow per share CAGR3 17 1)…
Free Funds Flow Allocation Committed to returning essentially all free funds flow to shareholders Capital Allocation Priorities 2024 Capital Allocation 2028 Capital Allocation billions Balance Sheet Strength 5.0 Investment-grade…
Return of Capital Strategy Balancing sustainable dividend growth with share repurchases Dividend per share Dividend payout ratio Outstanding shares Shares (millions) 10% 1.20 800 Dividend Per Share Growth CAGR3 15% 700 1.00…
Parkland, BC Asset Portfolio Overview
Montney Overview ARCs competitive advantage in a world-class asset 1,600 Montney sections 5,000+ Tier 1 drilling locations 87% of these locations are unbooked 1.5 Bcf/d Owned-and-operated infrastructure 21 21
North American Natural Gas Inventory ARC has a 25-year inventory life economic below US2.50/MMbtu 22 Source Enverus Intelligence Research
Montney Track Record of Execution Early movers to consolidate asset base at a low cost and deliver sustained profitable growth Boe per day 2028 Attachie 440,000 Montney Crude Oil & Liquids (bbl/d) 2025 Phase II Montney Natural Gas…
Large Network of Owned-and-operated Infrastructure Owned infrastructure results in approximately 300 million of cost avoidance annually Dawson Phase I & II 1.5 Bcf/d Attachie Phase I 120 MMcf/day 90 MMcf/day3 processing capacity…
Deep Inventory of Development Opportunities ARC has substantial Montney drilling inventory at each of our producing and growth assets Locations 2,000 15 years of 20 years of Inventory Inventory 1,000 10 years of Inventory…
Kakwa Overview Liquids-rich asset offering a long runway of development…
Kakwa Outperformance Improved efficiencies via systematic design progressions Widened Inter-Well Spacing Single Layer Development 135 meters to 175 meters Trialed where layers differ in reservoir quality, and drilling and completion…
Dawson Overview Flagship asset delivering superior free funds flow2 with a long inventory runway 1 Tcf Natural Gas Produced Developed (33%) SCALE Undeveloped (67%) UMA 67% Undeveloped 20 Years of Inventory at current drilling…
Sunrise Overview Scale, low-cost, near-zero emissions the key ingredients to supply West Coast LNG Highly efficient EFFICIENT dry natural gas play due to stacked UMA development layers Developed (37%) Undeveloped (63%)…
Septimus and Sundown Overview Capable of delivering approximately 1 Bcf per day of combined production for 15 years Quick Facts Sundown land position1 36,600 acres Septimus land position1 19,100 acres Inventory 15 years at 1…
Attachie, BC Attachie Phase I
Attachie Overview ARCs largest and most economic undeveloped asset Scale to Replicate Kakwa READINESS EFFICIENT SCALE UMA 300 net sections in condensate-rich Montney LMA Consolidated Land Base Drives Efficiencies 3 Phases…
Attachie Phase I Overview Aiming to deliver the most efficient Montney development to-date 740 MM to construct and fill facilities 40 Mboe/d Processing capacity 2025 Targeting full production capacity Natural Gas Sales Line…
Attachie Phase I Performance replicates Kakwa Cum Condensate (Mbbl) PERFORMANCE Condensate (bbl/d) Well performance at Attachie Phase I replicates Kakwa core for both gas and liquids Month Month EFFICIENT Cum Gas…
Attachie Phase I Economics Full production anticipated in 2025; project payout in 2027 Economic Outlook Economics (2023 to 2032) millions 740 million of capital to build and fill the facility 5,000 500 million of netback3 in 2025+…
Sunrise, BC LNG & Marketing Strategy
Our Marketing Strategy Accessing global demand markets at the lowest cost Market Market Price Access Diversification Optimization Securing long-term Accessing diversified Increasing revenues transportation arrangements markets…
Condensate Supply and Demand Outlook 35% of WCSB condensate demand 2022 Canadian Oil Sands Blending Demand is met by supply imported from the 700 Mbbl/d U.S. market Import pipelines run at high utilization 2022 WCSB Production 450…
Natural Gas Marketing Strategy Portfolio with well-diversified North American exposure is driving strong realizations Natural Gas Financial Exposure1 2 ARCs Current Natural Gas Portfolio 12% 9% 9% 14% 23% 8% 10% 10% 8% 8% 7%…
Natural Gas Price Realization Benchmarking Physical diversification to end markets is a competitive advantage Realized Natural Gas Price1 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 2018 2019 2020 2021 2022…
Global LNG Supply and Demand Outlook Structural long-term outlook for global natural gas demand Bcf/d Historical Natural Gas Pricing Global LNG Supply and Demand Outlook 100 JKM (Asia) Henry Hub (North America) 80 80 70 60 60…
Long-term Agreements Shell (40% interest in LNG Cheniere Corpus Christi Cedar LNG2 Canada) Stage III Volumes 150 MMcf/day 140 MMcf/day 200 MMcf/day Term Long-term 15 years 20 years Pricing Premium to JKM1 JKM2 Structure…
LNG Economics Long-term supply agreements to diversify and access global natural gas pricing LNG Revenue Enhancement Sensitivity LNG access is an 800 775 MM Annual Incremental Net Revenue relative to AECO extension of ARCs…
ESG Strategy & Performance
Leading Emissions Profile ARC has one of the lowest emissions profiles amongst Canadian E&P companies 2021 GHG Emissions Intensity1 2021 Methane Intensity1 (Scope 1 and 2) 0.0100 0.0800 Emissions Intensity (tCo2e/year)…
ESG Leadership 1 Northeast BC Infrastructure NEBC Absolute GHG emissions reduction Production (Boed) Absolute Emissions (tCO2e) 160,000 400,000 140,000 Attachie Parkland Electrified in 2018 120,000 Septimus 300,000…
ESG Leadership Through Innovation Driving operational efficiencies and enabling top-quartile emissions performance OUR APPROACH ARC has committed to invest Invest 50 in emerging technologies directly (equity) or indirectly (funds)…
Ante Creek, AB Appendix
Financial Strength Strong financial position has been a foundation of ARC for 26 years 1 2023 forecasted net debt sensitivities Long-term notes repayment schedule billions, ratio Cdn millions 1.5x 600 1.5 450 1.0x 1.0 300 0.5…
Debt Strategy ARC is a balance sheet first organization millions Simple Investment Grade Capital Structure 3,000 1.0 billion low-cost, long-term notes provide stability DBRS BBB (stable) 2,500 Weighted average interest rate 2.9%…
NEBC Montney Operational Excellence ARC outperforms industry peers on both drilling and completions operating metrics Completions Efficiency Completions Efficiency Proppant Pumped/Day1 Lateral Completed/Day1 Tonnes/day m/day 3,000…
Greater Kakwa Montney Operational Excellence ARC continues to deliver top-quartile completions and drilling efficiencies in Kakwa Completions Efficiency Completions Efficiency Proppant Pumped/Day1 Lateral Completed/Day1 ARC m/day…
Reserves Replacement ARC has replaced 140% of production for 15 consecutive years 500% 400% 300% 200% 100% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 53
Risk Management Contracts Positions ARCs long-term focus is to reduce downside risk and create certainty in cash flows 1 As at September 30, 2023 Remainder 2023 2024 2025 2026 2027 2028 Crude Oil WTI US/bbl bbl/day US/bbl bbl/day US/bbl…
ESG Ratings and Rankings View ARCs ESG performance and highlights at www.arcresources.com/sustainability Member of MSCI Global Sustainability Index Member of Sustainalytics Jantzi Social Index MSCI ESG Rating: AAA Environment…
Advisory Statements
Advisory Statements Non-GAAP Financial Measures Capital Expenditures ARC uses capital expenditures to measure its capital investment level compared to the Companys annual budgeted capital expenditures. ARCs budgeted capital…
Advisory Statements Non-GAAP Ratios Netback per boe ARC calculates netback per boe as netback divided by weighted average daily production. Netback is a non-GAAP financial measure component of netback per boe. Management believes…
Investor Relations Contacts Dale Lewko General Investor Relations Enquiries Manager, Capital Markets 403.503.8600 403.503.8696 1.888.272.4900 DLewkoarcresources.com IRarcresources.com
Loading...
