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CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd.

Arc Resources Ltd. · Feb 7, 2013 · 59 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. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 1
    ARC Resources Credit Suisse Energy Summit February 7, 2013
  2. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 2
    CORPORATE OVERVIEW Production (2012 Annual) 93,500 boed Liquids 36,400 boed Natural gas 343 mmcfd Crude Oil Reserves (2P Gross) 607 mmboe NE BC/ NW AB Liquids-rich Gas 17.5 year RLI (1) Dry Gas NORTH AB Current monthly dividend…
  3. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 3
    2012 FINANCIAL AND OPERATIONAL PERFORMANCE Three Months Ended Year Ended December 31 December 31 (CDN millions, except per share and per boe amounts) 2012 2011 2012 2011 Production (boe/d) 95,725 92,021 93,546 83,416 Gas 61% 64% 61%…
  4. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 4
    VALUE PROPOSITION We believe that top performing companies all have the following attributes: Great assets Operational excellence Capital discipline Management that delivers results Strong balance sheet with financial flexibility…
  5. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 5
    PRODUCTION GROWTH Production Growth - Montney and Non-Montney 100,000 Montney Gas (boe/d) Montney Oil/Liquids (bbls/d) Non-Montney Gas (boe/d) Non-Montney Liquids (boe/d) 80,000 Forecast Total Non-Montney production…
  6. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 6
    INCOME AND GROWTH ARC HAS DELIVERED BOTH ARC has a 16 year history of risk managed value creation - Provided an 18% annual total return since inception - Paid out 4.6 billion in total dividends - 28.68/share - Grown absolute…
  7. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 7
    SUSTAINABLE DIVIDEND 4.6 BILLION IN DIVIDENDS SINCE INCEPTION The dividend is a critical component of our business strategy Sustained dividend levels through commodity price cycles due to quality of assets, active hedging program and…
  8. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 8
    Reserves and Resources The discussion in this presentation in respect of reserves and resources is subject to a number of cautionary statements, assumptions and risks as set forth below and elsewhere in this presentation. See also the…
  9. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 9
    200 PER CENT RESERVE REPLACEMENT IN 2012 2012 is the fifth consecutive year of greater than 200% reserve replacement Increase in 2P reserves of 6% to 607 mmboe Replaced 214% of crude oil and liquids reserves, increasing 9% to 186…
  10. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 10
    KEY RESERVE INFORMATION 18% COMPOUND ANNUAL GROWTH Reserves as of December 31, 2012 (mmboe) - Proved Producing 201 (100 mmboe liquids, 607 bcf gas) - Total Proved 364 (127 mmbbls liquids, 1.4 Tcf gas) - Proved Plus Probable 607 (186…
  11. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 11
    CAPITAL EFFICIENCY EXCELLENT FD&A PERFORMANCE IN 2012 Replaced 200% of production at an all in FD&A cost of 9.34/boe(1) 2012 recycle ratio of 2.7 times based on F&D of 9.01/boe(1) and pre-hedging netback of 24.17/boe Three year FD&A…
  12. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 12
    NE B.C. MONTNEY VAST RESOURCE BASE We engaged GLJ to provide a resources evaluation of our properties at Dawson, Parkland, Tower, Sunrise/Sunset, Attachie, Septimus, Sundown and Blueberry located in northeastern British Columbia and at…
  13. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 13
    MONTNEY LANDS WORLD CLASS RESOURCE NE BC Montney lands are a major growth engine. Significant opportunity to grow liquids production. Total BC Montney production of 235 mmcf/d natural gas and 2,600 bbls/d oil and liquids with…
  14. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 14
    MONTNEY GROWTH ASSETS RESERVES AND RESOURCES Independent Resources Evaluation conducted by GLJ effective December 31, 2012 In addition to the 50.1 Tcf of natural gas resource, an oil resource of 1.5 billion barrels was identified at…
  15. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 15
    MONTNEY GROWTH ASSETS RESERVES AND RESOURCES 2012 Best 2011 Best Reserves and Economic Contingent Resources (1)(2) Estimate Estimate Natural Gas (Tcf) Reserves (3) 2.1 1.9 Economic Contingent Resources 4.2 4.1 Natural Gas Liquids…
  16. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 16
    2013 Budget
  17. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 17
    2013 CAPITAL PROGRAM SETTING THE STAGE FOR 2014 PRODUCTION GROWTH 830 million capital program (178 gross operated wells) with majority of spending in oil and liquids-rich gas plays and infrastructure. NE BC - 324MM(1) 36 grossNE…
  18. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 18
    2013 BUDGET 2013/2014 Production Growth 2013 Budget - Volumes (BOED) All Properties PO DEV OPT EXPLORE 140,000 2014 base production, does not show 2014 CAPEX program 120,000 100,000 80,000 Base Decline 22% Base Base…
  19. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 19
    ASSET OVERVIEW WESTERN CANADA Montney Growth Assets Base Assets Blueberry Attachie Tower Septimus Parkland Sunset/Sunrise Dawson Sundown Ante Creek Redwater Natural Gas Pembina Liquids-rich gas Hatton Crude Oil…
  20. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 20
    Ante Creek A Montney Oil Success Story
  21. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 21
    ANTE CREEK ASSET DETAILS Net production (boe/d) Q4 2012 10,300 Liquids (bbls/d) 5,100 Gas (mmcf/d) 32 Production split % (liquids/gas) 50/50 Land (Montney net sections) 267 Working Interest 99% 10-07 Gas Plant Reserves (2P…
  22. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 22
    ANTE CREEK OIL OPERATIONAL EXCELLENCE INDUSTRY LEADING CAPITAL EFFICIENCY ARCs Ante Creek/Kaybob Montney drill and complete costs…
  23. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 23
    ANTE CREEK MONTNEY DEVELOPMENT ECONOMICS 450 Key Metrics DCET Capex per well (MM) 4.0 400 Reserves per well (Mboe) 283 IP (1 mo) (boe/d) 400 350 IP (12 mo) (boe/d) 245 Economics (85/bbl) 4/GJ 3/GJ 300 IRR (% AT) 45% 35%…
  24. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 24
    ANTE CREEK 2013 BUDGET 186MM OPERATED 2013 Budget - Volumes (BOED) Operated PO DEV OPT 16,000 14,000 12,000 10,000 8,000 Base Decline 28% 6,000 4,000 Drill 34 wells and grow production to 15,000 boed by the end of…
  25. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 25
    Parkland/Tower Liquids Rich Gas
  26. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 26
    PARKLAND/TOWER EVALUATING POTENTIAL AND DEVELOPING EXISTING LANDS Parkland Tower Net production Q4 2012 (boe/d) 7,600 1,200 Liquids (bbls/d) 940 770 Gas (mmcf/d) 40 2.5 Land (net sections) 23 56 Working Interest 84% 90%…
  27. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 27
    PARKLAND LAYERED DEVELOPMENT Producing Formation: Upper Montney Gross thickness 100m Net pay 90m Porosity 6% Permeability 0.01 to 0.1 mD Large DGIP volumes in Parkland, currently have modest recoveries per well 100 Bcf DGIP per…
  28. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 28
    PARKLAND MONTNEY DEVELOPMENT ECONOMICS Key Metrics 7,000 DCET Capex per well (MM) 5.2 Reserves per well (Bcf) 5.8 6,000 IP (1 mo) (MMcf/d) 5.0 IP (12 mo) (MMcf/d) 4.0 Economics (85/bbl) 4/GJ 3/GJ 5,000 IRR (% AT) 79% 54% Gas…
  29. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 29
    TOWER 2012 ACCOMPLISHMENTS Tower Production 2012 Accomplishments: 2,500 2012 Operated Program average 30 day IP rate: 375 boe/d per well 2,000 Gas (Forecast) Production volumes limited due to Liquids (Forecast) liquid handling…
  30. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 30
    TOWER OPERATIONAL EXCELLENCE - MINIMIZING FOOTPRINT Pad drilling will substantially minimize surface land footprint Expect 8 to 16 wells per pad depending on reservoir characteristics Considerable cost savings related to pad…
  31. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 31
    TOWER MONTNEY DEVELOPMENT ECONOMICS 600 Key Metrics DCET Capex per well (MM) 5.3 Reserves per well (Mboe) 400 500 IP (1 mo) (boe/d) 500 IP (12 mo) (boe/d) 260 Economics (85/bbl) 4/GJ 3/GJ 400 IRR (% AT) 41% 37% Production Rate…
  32. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 32
    TOWER/PARKLAND 2013 BUDGET 249MM OPERATED 2013 Budget - Volumes (BOED) Operated PO DEV OPT 25,000 20,000 2014 base production, does not include 2014 CAPEX program 15,000 10,000 Base Decline 21% 5,000 Drill 24…
  33. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 33
    Dawson World Class Asset
  34. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 34
    DAWSON ASSET DETAILS Net production (boe/d) Q4 2012 28,800 Liquids (bbls/d) 800 Gas (mmcf/d) 168 45 mmcfd Compressor Production split % (liquids/gas) 97% gas Station 120 mmcfd Land (Montney net sections) 130 Gas Plant Working…
  35. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 35
    DAWSON TYPE CURVE GROWTH 2008 type curve analysis was completed using initial production results and verified with a vertical well production multiplier 2009-2011 Type curve used P90 IPs with decline analysis and assigned decline…
  36. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 36
    DAWSON MONTNEY DEVELOPMENT ECONOMICS 7,000 Key Metrics DCET Capex per well (MM) 5.2 6,000 Reserves per well (Bcf) 7.1 IP (1 mo) (MMcf/d) 5.0 IP (12 mo) (MMcf/d) 4.8 5,000 4/GJ 3/GJ Economics (85/bbl) IRR (% AT) 72% 44% Gas Rate…
  37. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 37
    DAWSON 2013 BUDGET 52MM OPERATED 2013 Budget - Volumes (BOED) Operated PO DEV 35,000 30,000 25,000 20,000 Base Decline 28% 15,000 10,000 5,000 Dawson is a world-class asset that continues to exceed expectations.…
  38. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 38
    BASE ASSETS Natural Gas Redwater Crude Oil Pembina Hatton Weyburn Goodlands Jenner Lougheed Midale
  39. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 39
    Pembina Revitalizing a Mature Oil Field
  40. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 40
    PEMBINA ASSET DETAILS Net production (boe/d) Q4 2012 12,300 Cardium production 82% Production split % (liquids/gas) 75%/25% Land (Cardium net sections) 134 Working Interest 79% Reserves (2P mmboe) Cardium 49.4 Reserve Life…
  41. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 41
    PEMBINA OIL AND LIQUIDS GROWTH ARC HAS GROWN LIQUIDS PRODUCTION IN THIS MATURE FIELD Pembina 33% Increase in Oil & Liquids Production since 2006 14,000 12,000 10,000 8,000 Boe/d Q4 2012 - 9,200 boe/d 6,000 Q1 2006 -…
  42. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 42
    PEMBINA OIL OPERATIONAL EXCELLENCE INDUSTRY LEADING CAPITAL EFFICIENCY ARCs average drill and complete costs are 80% of industry average ARC 1.9 MM per well vs. Industry 2.4 MM per well (1) ARCs Cardium well performance is…
  43. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 43
    PEMBINA CARDIUM DEVELOPMENT ECONOMICS 250 Key Metrics DCET Capex per well (MM) 2.3 Reserves per well (Mboe) 171 200 IP (1 mo) (boe/d) 227 IP (12 mo) (boe/d) 90 Economics (85/bbl) 4/GJ 3/GJ IRR (% AT) 52% 50% 150 Recycle Ratio…
  44. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 44
    PEMBINA 2013 BUDGET 131MM 2013 Budget - Volumes (BOED) Operated and Non-Operated PO DEV OPT 14,000 12,000 10,000 8,000 Base DeclineBase 23%Decline 23% Base Decline 23% 6,000 4,000 Drill 52 gross operated Hz wells…
  45. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 45
    Summary
  46. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 46
    WHY INVEST IN ARC RESOURCES ARC is a top-tier oil and natural gas producer focused on Risk Managed Value Creation Extensive land position in top quality resource plays provides significant growth opportunity. Significant near-term oil…
  47. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 47
    PRODUCTION GROWTH Production Growth - Montney and Non-Montney 100,000 Montney Gas (boe/d) Montney Oil/Liquids (bbls/d) Non-Montney Gas (boe/d) Non-Montney Liquids (boe/d) 80,000 Forecast Total Non-Montney production…
  48. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 48
    Appendix
  49. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 49
    2013 BUDGET ( millions) 2011 (Actual) 2012 (Actual) 2013 (Budget) Development 396 408 563 Development Facilities 92 73 162 Maintenance 21 23 35 Optimization 14 6 13 Exploration & Seismic 94 49 11 Enhanced Oil Recovery 20 21 27 Land 75 10…
  50. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 50
    2013 GUIDANCE 2012 Guidance 2012 Actual 2013 Guidance Oil (bbls/d) 30,000 31,000 31,454 32,000 34,000 Condensate (bbls/d) 2,100 2,500 2,217 1,800 2,000 Gas (mmcf/d) 340 350 342.9 340 350 NGLs (bbls/d) 2,100 2,600 2,728 2,400 2,800…
  51. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 51
    FOCUS ON OIL AND LIQUIDS 15% OIL AND LIQUIDS PRODUCTION GROWTH IN 2012 Focus on crude oil and liquids development resulted in 15% growth in crude oil and liquids production to 36,400 boe/d in 2012 primarily at Ante Creek, Pembina and…
  52. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 52
    OUR STRATEGY RISK MANAGED VALUE CREATION Understand our Advantaged Position Leverage our Advantaged Position Make time to Think Strategically Financial Operational Flexibility Excellence RISK MANAGED VALUE CREATION High…
  53. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 53
    ACCESS TO CAPITAL DEBT Debt raised from three different sources: 1. Bank Credit Facility - 1.0 billion plus 25 million overdraft facility, 12 banks under facility Undrawn as at December 31, 2012 Term extends to August 3, 2016…
  54. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 54
    DEBT MATURITIES SPREAD OVER TIME ARCs long-term notes are structured so that they mature over a number of years; this reduces refinancing risk ARCs undrawn credit facility of 1.0 billion allows for significant flexibility to repay…
  55. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 55
    HEDGE POSITIONS AS OF FEBRUARY 6, 2013 Summary of Hedge Positions as at February 6, 2013 (1) 2013 2014 2015 - 2017 Crude Oil WTI (2): (US/bbl) US/bbl bbl/d US/bbl bbl/d US/bbl bbl/d Ceiling 104.01 14,992 100.00 2,479 - - Floor…
  56. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 56
    MONTNEY LANDS SIGNIFICANT MONTNEY PRESENCE ARC has a significant presence in B.C. and Alberta Montney First to drill B.C. Montney horizontal well in 2005 at Dawson BC Montney Hz Wells Rig Released by BC Montney Gross Operated Raw…
  57. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 57
    MONTNEY HORIZONTAL WELLS 30 DAY HZ IP RATES GLACIER - TOWN ARCS MONTNEY WELLS HAVE EXCEEDED EXPECTATIONS 16,000 14,000 ARC Others 12,000 10,000 Production Rate (mcf/d) ARC Wells P50 = 5.2 Mmcf/d 8,000 Other Wells…
  58. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 58
    DEFINITIONS OF OIL AND GAS RESERVES AND RESOURCES Reserves are estimated remaining quantities of oil and natural gas and related substances anticipated to be recoverable from known accumulations, as of a given date, based on the…
  59. CREDIT SUISSE ENERGY SUMMIT – Arc Resources Ltd. – slide 59
    DEFINITIONS OF OIL AND GAS RESERVES AND RESOURCES Economic Contingent Resources are those contingent resources which are currently economically recoverable. Undiscovered Petroleum Initially-In-Place (UPIIP) is that quantity of…

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