Arc Resources — Investor Day (November 2014)
153 slides from Arc Resources's investor day presentation, Nov 24, 2014
Slide 1: Investor Day – Calgary and Toronto, November 2014
November 24, 2014 – Calgary November 25, 2014 – Toronto
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking information as to ARC’s internal projections, expectations or beliefs relating to future events or future performance and includes information as to our future well inventory in our core areas, our exploration and development dril
Slide 3: Investor Day Agenda
Investor Day Agenda • Welcome and Introductions – David Carey • Corporate Strategy – Myron Stadnyk (15 min) • Asset Overview – Terry Anderson, Neil Groeneveld, Karen Nielsen (1:30 min) • Montney Growth Assets • Base Assets • 2015 Capital Budget and 2016 Outlook • Finance Strategy – Van Dafoe (20 min
Slide 4: Proven Leadership Team
Proven Leadership Team Committed Management Team Employee Since Myron Stadnyk President and Chief Executive Officer 1997 Terry Anderson Sr. VP and Chief Operating Officer 2000 Van Dafoe Sr. VP and Chief Financial Officer 1999 David Carey Sr. VP Capital Markets 2001 Terry Gill Sr. VP Corporate Servic
Slide 5: Experienced Board of Directors
Experienced Board of Directors Respected Board of Directors Board Member Since Mac Van Wielingen Chairman 1996 Myron Stadnyk Director 2013 John Dielwart Director 1996 Fred Dyment Director 2003 Tim Hearn Director 2011 James Houck Director 2008 Hal Kvisle Director 2009 Kathleen O’Neill Director 2009 H
Slide 6: Value Proposition
Value Proposition Clear Line of Sight to Long-term Value Creation
Slide 7: Value Creation Culture
Value Creation Culture Culture Focused on Organizational Learning Drives Ongoing Success Technology Efficiency Opportunity Applying New Focus on Operational Building for the Technology: Efficiency: Long-Term: Longer Laterals Managing Operating Significant Land Optimize Frac Costs Base Spacin
Slide 8: Corporate Profile
Corporate Profile Corporate Summary Production (Q3 2014) 115,530 boe/d Reserves (2P Gross – YE 2013) (1) 634 mmboe Reserve Life Index (2P) (1) 15.5 years (2) Annualized Dividend / Dividend Yield $1.20 per share / 4.3% (3) Annualized Returns (4) Since Inception 18% 5 Year Trailing 11% Market Summary
Slide 9: Unique Strategy
Unique Strategy Risk Managed Value Creation is Central to ARC’s Strategy Targeting net debt to funds >200% Reserve Replacement from operations between through the drill bit for the 1.0 – 1.5x past 6 consecutive years One of the longest RLI Highly skilled team of 560 compared to peers at 15.5 employe
Slide 10: High Quality Long Life Assets
High Quality Long Life Assets 200% or Greater Reserve Replacement Over the Past 6 Years Annual Reserve Replacement 700% Development 600% Acquisitions 500% 400% 300% 200% 100% 0%
Slide 11: Operational Excellence – Capital Efficiencies
Operational Excellence – Capital Efficiencies Managing Declines and Driving Down Costs All In Capital Efficiencies $/boe/d(1) 3 Year Avg. Capital Efficiencies $/boe/d(2) $40,000 $40,000 ARC Competitors $30,000 $30,000 $ per boe/d $ per boe/d $20,000 $20,000 $10,000 $10,000 $0 $- 2009 2010 2011 2012
Slide 12: Operational Excellence – Cost Management
Operational Excellence – Cost Management Low Cost Producers Deliver Superior Returns Over Time • Focused assets, characterized by high working interest, operatorship and ARC owned/operated facilities, provides control over costs and operations $30 3 Year FD&A $/boe(1)(2) $20 2013 Operating Costs $/b
Slide 13: Financial Flexibility – Balance Sheet Strength
Financial Flexibility – Balance Sheet Strength Targeting Net Debt to Funds from Operations Between 1.0 – 1.5x Net Debt to FFO $1,400 2.0 Net Debt to Funds from Operations $1,200 1.5 $1,000 $ millions $800 1.0 $600 $400 0.5 $200 $0 - 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q3 2014F 201
Slide 14: Financial Flexibility – Balance Sheet Strength
Financial Flexibility – Balance Sheet Strength Strong Balance Sheet Provides Stability Through Cycles • ARC is at the low end of the scale compared to peers for both debt to funds from operations and debt to capitalization 4.5 Net Debt to Cash Flow 2014F(1) 50% Net Debt to Enterprise Value(1) 4.0 3.
Slide 15: People and Talent Leadership
People and Talent Leadership Putting People First • Invest in Employee Development & Training • Trusted and Respected Management and Board • Culture of Innovation and Accountability • Focus on High Employee Engagement directly supports superior business performance
Slide 16: Health & Safety Leadership
Health & Safety Leadership Health & Safety is our Top Priority • Target zero lost-time accidents • Proactive approach to asset integrity • Work to build culture of safety among employees and contractors
Slide 17: Environmental Leadership
Environmental Leadership Committed to High Standards of Environmental Performance • Investment in facility upgrades andHealth & Safety low-emissions technology results in improved Leadershipimpact over the long-term efficiencies and ultimately reduced environmental • Responsible operating practices
Slide 18: Risk Managed Value Creation
Risk Managed Value Creation 15% Compound Annual Production Growth (CAGR) Since Inception boe/d Forecast
Slide 19: Sustainable Dividend
Sustainable Dividend Committed to the Dividend While Delivering Profitable Growth • 18% annualized total return since inception, ~$5.2 billion of dividends ($30.78/share) $5,500 Cumulative Dividends and Historic Payout Ratio 120% $5,000 $4,500 100% Cumulative Total Dividends $ Millions $4,000 80% $3
Slide 20: Growth in Per Share Production and Cash Flow
Growth in Per Share Production and Cash Flow Delivering Value with Profitable Growth and Income • 38% increase in production per share and 69% increase in Funds from Operations per share over five year period Production per Share(1) Funds From Operations per Share(2) 6% CAGR Q3 2009 – Q3 2014 11% CA
Slide 21: Superior Returns
Superior Returns 18% Annualized Total Return Since 1996 ARC Total Return Performance vs. Indices 2800% 5 year – 33% 3 year – 9% 2300% 1800% ARX – 18% Total Return 1300% 800% STOILP – 7% 300% SPTSX – 8% -200% Total return to November 14, 2014 from inception assuming DRIP participation.
Slide 22: ARC’s Proven Development Model
ARC’s Proven Development Model Inventory of Opportunities at all Stages
Slide 23: Looking Beyond 2016
Looking Beyond 2016 Diverse Portfolio Provides Strategic Optionality • ARC has a well balanced inventory of value creating opportunities which may be pursued beyond 2016 Project Options 2016 - 2020+ • Dawson Phase 3 • Pouce Commercialization • Ante Creek Expansion • Sunrise Phase 2 Forecast • Attach
Slide 24: Long-Term Value Creation
Long-Term Value Creation Significant Accomplishments, Considerable Future Opportunities 2014 2015 2016 2017+ 110,000-114,000 boe/d - Parkland/Tower/Ante Creek/Sunrise Growing 120,000-125,000 boe/d - Tower, Sunrise Profitable >128,000 boe/d - Tower, Sunrise Production Dawson, Ante Creek Filled Parkla
Slide 25: Asset Overview
Asset Overview
Slide 26: Operations Overview
Operations Overview Western Canadian Producer – Strategic Optionality BRITISH COLUMBIA ALBERTA SASKATCHEWAN MANITOBA NE British Columbia Northern Alberta Redwater Pembina Southern Alberta SE Sask and Manitoba
Slide 27: Understanding ARC’s Assets
Understanding ARC’s Assets Balanced Portfolio Provides Strategic Optionality • Portfolio includes growth and free cash flow generating assets • Optionality for oil, liquids and natural gas development dependent upon commodity prices • Maintaining a greater than 5 year inventory of defined opportunit
Slide 28: Focused Production and Reserves
Focused Production and Reserves Montney Comprises ~ 70% of Production and 2P Reserves Production (boe/d) Q3 2014 2P Reserves (Mmboe) YE 2013(1) 40,000 200 180 Montney Montney 160 30,000 80,000 boe/d (70%) 457 mmboe (72%) 140 120 20,000 Base 100 Base 35,000 boe/d (30%) 80 177 mmboe (28%) 60 10,000 40
Slide 29: Complimentary Asset Base
Complimentary Asset Base Montney Production and Cash Flow Growth Supported by Base Assets • ARC’s Montney assets are expected to deliver ~$800 million of total field cash flow in 2014, up from ~$100 million in 2009 Field Cash Flow(1) - Base and Montney Assets $1,500 ($ millions) Montney Field Netbac
Slide 30: Complimentary Asset Base
Complimentary Asset Base Montney Growth Assets Underpinned by Free Cash Flow Generating Base Assets • Invested ~$2.3 billion of capital in Montney growth assets during 2009 – 2014F • Base assets generated ~$1.6 billion of free cash flow during the period 2009 – 2014F • Base production decline due to
Slide 31: Early Stages of Property Development
Early Stages of Property Development* Large Identified Opportunity for Future Growth Gross Drilling Locations 1,600 Montney > 4,000 Gross Drilling Locations 1,400 1,200 1,000 800 600 400 200 0 Dawson Parkland/ Tower Sunrise/ Sunset Ante Creek Other Montney Pembina Total Hz wells forecast to YE2014 2
Slide 32: Montney Assets
Montney Assets
Slide 33: Why the Montney
Why the Montney Total Recoverable Resource Ranks High Amongst North American Resource Plays • Massive thickness • Large areal extent (>500km) • Superior lithology and “fracability” • High permeability • Over pressured Montney • Higher recovery factors • Repeatable performance Marcellus • Dry gas, li
Slide 34: Montney Growth Assets
Montney Growth Assets Growing our Montney Land Base 120 Net Montney Sections in 2003 >970 Net Montney Sections Today 500 km 500 km
Slide 35: Significant Montney Land Position
Significant Montney Land Position 3rd Largest Montney Landholder With Over 620,000 Net Acres 1,400 Top Montney Acreage Holder(1) 000 acres 1,200 1,000 Montney Acres (000's) ~70% of ARC’s Montney land is 800 undeveloped, providing significant future opportunity 600 400 200 0 ATH TET BIR ARX ECA TOU N
Slide 36: Montney Geology
Montney Geology World Class Resource Play Montney Stratigraphy Charlie Lake Unconformity Halfway Doig Doig Phosphate Upper Montney Montney Lower Montney Belloy Halfway – Montney Schematic East/West Cross-Section Modified from Macquarie Research – Lower Montney, October 2014
Slide 37: Montney Geology
Montney Geology Expertise = Confidence Upper Montney Lower Montney • Laminated coarse silt and fine silt • Laminated fine silt with higher clay content • Variable bioturbation than Upper Montney • Up to 3% TOC • Bioturbation is absent • Less organics Porosity: 6.5% Porosity: 4.5% Permeability: 0.05
Slide 38: Montney Geology
Montney Geology Upper and Lower Montney – Meaningful, Exploitable Thickness Lower Montney Isopach Upper Montney Isopach
Slide 39: Upper Montney Fairway
Upper Montney Fairway ARC is Positioned in Dry Gas, Liquids-Rich Gas and Oil Windows • LARGE TPIIP(1) Montney is an unconventional accumulation 10 • We are pursuing generated 13 hydrocarbon that is trapped in the source and adjacent tight rocks (1) See “Reserves and Resources Disclosure” and “Defini
Slide 40: Multiple Layers to Develop
Multiple Layers to Develop Attachie Septimus Sunrise Tower Parkland Dawson Pouce Coupe Montney A Upper Montney Montney B Montney C Lower Montney Montney D Montney E Existing Horizontal Wells, Development Potential Horizontal Wells Existing Horizontal Wells, Pilots
Slide 41: ARC in the Montney
ARC in the Montney 40% Annual Montney Growth over 5 Year Period (2009 – 2014) ~40% CAGR – 2009 – 2014 2015 100,000 Sunrise ~30% CAGR – 2000 - 2014 Development 2014 90,000 Parkland Gas 2013 Plant: Phase 1 80,000 Construction begins on 70,000 2012 Parkland Phase 1 Ante Creek Gas 60,000 2011 Plant Daws
Slide 42: NE BC Montney Reserves & Resources
NE BC Montney Reserves & Resources NE BC Montney TPIIP 55 Tcf of Gas and 2.2 Billion Barrels of Oil Corporate 2P Reserves of 634 mmboe OIL RESERVES 11.3 mmbbls 2.2 Tcf NGL 27.6 mmbbls OIL ECONOMIC CONTINGENT RESOURCE 10.7 mmbbls 4.5 Tcf NGL 116.5 mmbbls PROSPECTIVE RESOURCE NGL 3.9 Tcf 114.1 mmbbls
Slide 43: Montney Development Economics
Montney Development Economics Strong Rates of Return Across the Montney Portfolio Half Cycle Economics – Cdn$85/bbl Oil and Cdn$3/GJ Gas Parkland Tower Dawson Sunrise Ante Creek 50% IRR 50% IRR 65% IRR 50% IRR 50% IRR 4.2x Recycle 4.3x Recycle 4.2x Recycle 5.1x Recycle 3.1x Recycle <$1.00/mcf Breake
Slide 44: NE BC/NW AB Montney First Year Cumulative Gas
NE BC/NW AB Montney First Year Cumulative Gas ARC’s Montney Gas Wells Outperform Industry by ~65% on First Year Average NE BC / NW AB Montney Gas Only First Year Cumulative Gas 3,000 2,500 Others (1297 wells) ARC (121 wells) ARC P50 = 1,428 MMcf (First Yr Avg Rate = 3.9 MMcf/d) 2,000 Cumulative Gas
Slide 45: New Technology Continues to Unlock Value
New Technology Continues to Unlock Value Montney Fracture Stimulation Intensity is Evolving Montney - EUR vs Proppant – Normalized by Lateral Foot Drilled • Increased frac intensity over time primarily by tightening up inter-frac spacing along wellbores ARX Sunrise • High rate, high intensity fractu
Slide 46: Montney Infrastructure Optionality
Montney Infrastructure Optionality Well Positioned For Market Access • Area is currently well served with three major pipelines providing access to North American Markets: • TransCanada – Canada & US ARC Lands • Alliance – Chicago • Spectra - Westcoast • Multiple pipelines planned to support the pro
Slide 47: Dawson Gas
Dawson Gas World Class Resource, Unlimited Potential *Breakeven – Cdn$ per bbl or mcf price as indicated defined as price at which NPV10 is equal to zero. *IRR – Half cycle after tax rate of return based on C$85/bbl Edm MSW and C$3/GJ AECO *Free Cash Flow – Defined as Revenue – royalties – op costs
Slide 48: Dawson Asset Details
Dawson Asset Details Excellent Free Cash Flow Net production (boe/d) – Q3 2014 28,000 ARC Proposed Gas Plant (90 mmcfd & 7,500 Liquids (bbls/d) 920 bbls/d liquids) Gas (mmcf/d) 162 ARC 1-34 Production split % (liquids/gas) ~97% gas Compressor Station ARC 5-35 (45 mmcfd) Gas Plant Land (Montney net s
Slide 49: Dawson Development Potential
Dawson Development Potential Additional Development Layer Below Core Acreage Dawson • Dawson core development has been Upper Upper Montney A Montney Booked Reserves* focused on Upper Montney A; 55% of lands currently have no reserves booked in this layer • ARC drilled our first Lower Lower Montney i
Slide 50: Dawson – Upper Montney Liquids Story
Dawson – Upper Montney Liquids Story Dawson Rich Gas Window is Larger than the Core Dry Gas Window Liquids rich gas window • Liquids content increases Dew Point Plant: 5 – 10 bbl/mmscf Cold Plant: 15 – 35 bbl/mmscf away from core dry gas window • Lean gas window is narrower than initially thought ba
Slide 51: Operational Excellence – Dawson
Operational Excellence – Dawson Continual Learning in Frac Design = Lower Costs + Improved Economics Lower Cost per Frac, Increasing Frac Intensity Longer Laterals, Tighter Frac Spacing $300,000 30 2,100 200 180 $250,000 25 2,050 160 Lateral Length (metres) Frac Spacing (metres) 140 $200,000 20 2,00
Slide 52: Dawson Gas Type Curve Growth
Dawson Gas Type Curve Growth Frac Technology Advancements = Improvements in Well Performance • Type curve growth over time due to Completions 2009-2011 2012 2013- 2015 2014 improvements in well design, focused on completions and tighter frac spacing Frac spacing (m) 180 150 85 80 Fracs per well 10 1
Slide 53: Dawson Development Economics
Dawson Development Economics 65% Rate of Return at Flat $3/GJ AECO and C$85/bbl Key Metrics 7,000 DCET Capex per well ($MM) 5.5 Reserve estimate (Bcf) 7.4 6,000 IP (1 mo) (MMcf/d) 6.2 IP (12 mo) (MMcf/d) 5.4 5,000 Half Cycle Economics (Cdn$85bbl) C$4/GJ C$3/GJ Gas Rate (Mcf/d) 4,000 IRR (% AT) 110%
Slide 54: Dawson – “A Cash Flow Machine”
Dawson – “A Cash Flow Machine” Low Reinvestment Ratio to Maintain Significant Free Cash Flow • Grown production from ~ 50 Mmcfe/d in 2009 to 165 Mmcfe/d by mid 2012 • At Cdn$3 gas ~30% Reinvestment Ratio to sustain cash flow and generate ~$100 million of free cash flow annually for >15 years based o
Slide 55: Dawson – 2014 and Beyond
Dawson – 2014 and Beyond Better with Age, Facility Expansion Planned 2015 Budget* 35,000 Capital ($MM) $110 • Continues to perform, Total (boe/d) 27,300 delivering significant cash flow 30,000 Wells (HZ) 9 • Facilities producing at capacity 25,000 • Plan to drill and test 2 Lower Boe/d Montney wells
Slide 56: Dawson Infrastructure
Dawson Infrastructure New Facility Planned For 2017 On-stream • New Dawson Phase III Gas Plant • 90 mmscfd with 7,500 bbls/day of liquids handling • New site ideally situated in the Lower Montney/Liquids Rich play • Designed to handle inlets of 45 bbl/MMscf of NGL’s and over 40 bbl/MMscf of Condensa
Slide 57: Parkland/Tower
Parkland/Tower Reaping Acquisition Benefits *Breakeven – Cdn$ per bbl or mcf price as indicated defined as price at which NPV10 is equal to zero. *IRR – Half cycle after tax rate of return based on C$85/bbl Edm MSW and C$3/GJ AECO *Free Cash Flow – Defined as Revenue – royalties – op costs - transpo
Slide 58: Parkland/Tower – Asset Details
Parkland/Tower – Asset Details Material Value Creation in 2014 Parkland Tower Net production (boe/d) – 18,200 6,880 Q3 2014 Liquids (bbls/d) 3,700 4,940 Gas (mmcf/d) 87 11.6 Land (net sections) 23 57 Working Interest ~84% ~92% Reserves (2P mmboe) 58.0 24.6 Liquids (mmbbls) 9.7 14.0 Gas (bcf) 290 63.
Slide 59: Parkland/Tower Development Potential
Parkland/Tower Development Potential Incremental Reserves Potential with Multilayer Development • Upper Montney Upper Montney A supports two layers Booked Reserves* of development at Upper Montney Parkland and Tower • At year end 2013, ~55% of WI lands had reserves Lower booked to Upper Montney Mont
Slide 60: Operational Excellence – Tower
Operational Excellence – Tower Optimal Frac Design and Significant Efficiency Gains in Tight Oil Play 60% Decrease in Cost/Frac, 2X Increase in Applying Learnings in Well Length and Frac Intensity Frac Spacing $160,000 70 2,500 90 80 $140,000 Lateral Length (metres) Frac Spacing (metres) 60 2,000 70
Slide 61: Tower Completions Advancement
Tower Completions Advancement Advanced Completion Design = Improved Performance 1,200 Completions 2014 2015 2014 Type Curve Frac spacing (m) 40 25 1,000 Fracs per well 44 60 2015 Type Curve Production Rate (boe/d) Avg. tonnage 50 45 per frac 800 Cost per frac ($000) 80 60 Frac type Plug & perf Plug
Slide 62: Tower Development Economics
Tower Development Economics 50% Rate of Return at Flat $3/GJ AECO and C$85/bbl 1400 Key Metrics 1200 DCET Capex per well ($MM) 6.5 Reserve Estimate (Mboe) 600 1000 IP (1 mo) (boe/d) 1000 IP (12 mo) (boe/d) 400 800 Half Cycle Economics (C$3/GJ) Cdn$95/bbl Cdn$85bbl BOE/d IRR (% AT) 60% 50% 600 Recycl
Slide 63: Tower 2014 Wells
Tower 2014 Wells New Completions Delivering Breakthrough Performance Total Production (boe/d) Oil Production (bbl/d) Old completion 12-16 Pad design 5-14 Pad (2014) New completion 8-15 Pad (2014) design 2015 Type curve 2015 Type curve 2014 Type curve 2014 Type curve *Smoothed data using 6 day moving
Slide 64: Tower Cumulative Production
Tower Cumulative Production New Wells are Exceeding Type Curve Total Production (boe) Oil Production (bbl) 2015 Type curve 2015 Type curve 2014 Type curve 2014 Type curve Old completion 12-16 Pad design 5-14 Pad (2014) New completion 8-15 Pad (2014) design *Smoothed data using 6 day moving average
Slide 65: Tower – 2014 and Beyond
Tower – 2014 and Beyond Strong 2014 Results = Accelerated 2015 Development 14,000 • Tower oil is ~50 degree API; 12,000 2015 Budget* realized condensate pricing Capital ($MM) $145 10,000 Total (boe/d) 8,800 • Initial production at new wells Wells (HZ) 19 is often constrained due to infrastructure an
Slide 66: Operational Excellence – Parkland
Operational Excellence – Parkland Learnings from Dawson = Advanced Frac Design and Improved Results at Parkland Optimizing # Fracs, Lowering Costs Optimizing Well Length and Frac Spacing $300,000 35 2,050 110 $250,000 30 2,000 100 Lateral Length (metres) 1,950 Frac Spacing (metres) 25 90 Fracs/well
Slide 67: Parkland Development Economics
Parkland Development Economics Targeting Liquids With Step Out From Core Completions 2012 2013 2014 2015 Frac spacing (m) 180 100 80 70 1,200 2012 Type Curve (Dry Gas) Fracs per well 10 15 22 30 Avg. tonnage per 100 60 60 100 2013 Type Curve (Dry Gas) frac (T) 1,000 2014 Type Curve (Dry Gas / Liquid
Slide 68: Parkland Development Economics
Parkland Development Economics 50% Rate of Return at Flat $3/GJ AECO and C$85/bbl 1200 Key Metrics DCET Capex per well ($MM) 5.7 1000 Reserve Estimate (Bcfe) 5.8 IP (1 mo) (boe/d) 1080 800 IP (12 mo) (boe/d) 645 Half Cycle Economics BOE/d (Cdn$85bb) C$4/GJ C$3/GJ 600 IRR (% AT) 70% 50% Recycle Ratio
Slide 69: Parkland – 2014 and Beyond
Parkland – 2014 and Beyond Drilling and New Facilities Delivered Significant Growth in 2014 25,000 2015 Budget* • New wells brought on Capital ($MM) $50 systematically through 2014 to 20,000 fill capacity of new facility Total (boe/d) 18,200 (commissioned in late 2013) Wells (HZ) 4 • Transition to s
Slide 70: Parkland/Tower 2015
Parkland/Tower 2015 ~115% Year-over-Year Increase in 2014F Production Parkland/Tower 35,000 • Dry gas areas in 2015 Budget* Parkland have 30,000 Capital ($MM) $195 delivered strong results Total (boe/d) 27,000 in 2014 25,000 Wells (HZ) 23 • 23 Gross Operated 20,000 Wells Planned for 2015 Forecast (1
Slide 71: Parkland/Tower Infrastructure
Parkland/Tower Infrastructure Expansion of Oil Battery in 2015 to 10,000 bbl/day 2013 New Facility • 60 mmscfd of sales gas processing/ 3,000 bbls/day LPG production/ 5,000 bbls/day oil production • Capacity largely filled over the course of 2014 with preference to Tower oil volumes • Sales gas conn
Slide 72: Sunrise
Sunrise Long-term Growth Opportunity *Breakeven – Cdn$ per bbl or mcf price as indicated defined as price at which NPV10 is equal to zero. *IRR – Half cycle after tax rate of return based on C$85/bbl Edm MSW and C$3/GJ AECO *Free Cash Flow – Defined as Revenue – royalties – op costs - transportation
Slide 73: Sunrise/Sunset Asset Details
Sunrise/Sunset Asset Details Sunrise/Sunset Moving Forward with Full Scale Development Sunrise has progressed from pilot to full scale development Net production (boe/d) – Q3 2014 7,050 Liquids (bbls/d) 0 Gas (mmcf/d) 42.3 Land (net Montney sections) 32 Working Interest ~89% Reserves (2P mmboe) 113
Slide 74: Sunrise Development Potential
Sunrise Development Potential Proven Productivity from Four Layered Development • Known reserves exist in Upper Montney A. 2014 Upper Montney A Booked Reserves* drilling program has proved Upper Montney Upper Montney Upper Montney A+ A+ productivity Booked Reserves* • With four layered development a
Slide 75: Operational Excellence – Sunrise
Operational Excellence – Sunrise Incorporating Learnings into Early Development = Excellent Initial Results Doubling Fracs/well over 3 years Efficient Lateral Lengths 2,500 140 $250,000 35 120 30 2,000 Lateral Length (metres) Frac Spacing (metres) $200,000 25 100 Fracs/well $ per Frac $150,000 1,500
Slide 76: Sunrise Outperforming Expectations
Sunrise Outperforming Expectations 2014 Drilling Results Prove Four Layer Development Model 10,000 2014 Type Curve (11.7 Bcf Raw) 9,000 08-24Hz (MTYA) 8,000 C09-13Hz (Lower (UpperMTYA) MTYA+) 7,000 B02-25Hz (MTYB) - see note C02-25Hz (MTYD) - see note Gas Rate (Mcfd) 6,000 5,000 4,000 3,000 2,000 1,
Slide 77: Sunrise Continuous Improvements
Sunrise Continuous Improvements Enhanced Well Design = Type Curve Improvement Completions 2009-2011 2013-2014 2015 7,000 2015 Type Curve (11.5 Bcf) Frac spacing (m) 120 80 80 6,000 # Fracs per well 16 25 25 2013/14 Type Curve (11 Bcf) Avg. tonnage per frac (T) 60 100 100 2012 Type Curve (9.7 Bcf) 5,
Slide 78: Sunrise Development Economics
Sunrise Development Economics 50% Rate of Return Flat at $3/GJ AECO and C$85/bbl 7,000 Key Metrics DCET Capex per well ($MM) 6.0 Reserve Estimate (Bcf) 11.5 6,000 IP (1 mo) (MMcf/d) 6.2 IP (12 mo) (MMcf/d) 5.4 5,000 Half Cycle Economics (Cdn$85bbl) C$4/GJ C$3/GJ Gas Rate, mcf/d 4,000 IRR (% AT) 75%
Slide 79: Sunrise Infrastructure
Sunrise Infrastructure New Facility Setting the Stage to Double Production in Late 2015 • 100% owned and operated gas plant will double processing capacity at Sunrise • Construction has commenced on the 60 mmscfd sweet gas plant • Expect to commission plant in Q4 2015 and fill by year end 2015 • Sal
Slide 80: Sunrise – 2014 and Beyond
Sunrise – 2014 and Beyond Commercial Development of Sunrise with 60 mmcf/d Exit 2014 25,000 2015 Budget* • New wells brought Capital ($MM) $155 on-stream through third 20,000 Total (boe/d) 12,800 party processing facility Wells (HZ) 9 through second half Boe/d 15,000 of 2014 • Montney B suggests 10,
Slide 81: Montney Pilot Projects
Montney Pilot Projects Significant Future Potential
Slide 82: Montney Pilots
Montney Pilots Proving Future Value Before Full Scale Development West Attachie: Pilot Production on-stream since Parkland: Q2 2014 Red Creek Lower Montney well on-stream Q3 Attachie 2014 East Attachie: Pouce Coupe: Monitoring Pilot Tower Lower Montney Production since pilot production Septimus Park
Slide 83: Montney Pilots – Attachie
Montney Pilots – Attachie Continued Evaluation on Liquids Rich Land Attachie Western Pilot Wells 9 900 Condensate Rate (bbld), CGR (bbl/mmscf) 8 800 7 700 Raw Gas Rate (mmscfd) 6 600 Montney Pilot Wells 5 500 4 400 • Two pilot horizontal wells on the western 3 300 side of lands have produced 0.8 Bcf
Slide 84: Montney Pilots – Septimus
Montney Pilots – Septimus Early Days…..Promising Property • Production is facility constrained at ~5 mmcf/d Septimus Pilot (A13-11) 6 60 Condensate Rate (bbld), CGR (bbl/mmscf) 5 50 Raw Gas Rate (mmscfd) 4 40 3 30 2 20 Montney Pilot Well 1 10 0 0 0 50 100 150 Days on Production Raw Gas Rate Condensa
Slide 85: Montney Pilots – Lower Montney Potential
Montney Pilots – Lower Montney Potential ARC’s Land Base is in the Sweet Spot Estimated Gross Lower Montney Land • ARC is well positioned in optimal zone 160,000 Position in Liquids-Rich Window for Lower Montney development 140,000 • Greater Dawson Lower Montney play 120,000 yields favorable economi
Slide 86: Ante Creek
Ante Creek A Montney Success Story *Breakeven – Cdn$ per bbl or mcf price as indicated defined as price at which NPV10 is equal to zero. *IRR – Half cycle after tax rate of return based on C$85/bbl Edm MSW and C$3/GJ AECO *Free Cash Flow – Defined as Revenue – royalties – op costs - transportation c
Slide 87: Ante Creek Asset Details
Ante Creek Asset Details Significant Cash Flow with Substantial Growth Opportunity Net production (boe/d) – Q3 2014 17,800 Liquids (bbls/d) 9,300 Gas (mmcf/d) 51 Production split % (liquids/gas) ~52/48 Land (Montney net sections) 351 Working Interest ~99% Reserves (2P mmboe) 50.9 Liquids (mmbbls) 24
Slide 88: Ante Creek Significant Drilling Inventory
Ante Creek Significant Drilling Inventory Large Land Base and Down-spacing = Significant Drilling Inventory • Booked reserves exist on ~30% of ARC held mineral rights • Significant opportunity to prove up this large land base with delineation drilling • Continue to step out from existing drilled lan
Slide 89: Operational Excellence – Ante Creek
Operational Excellence – Ante Creek Reducing Business Cycle Times with Optimized Frac Design Drilling Longer Laterals in Fewer Days Lower Cost/Frac, Optimizing Frac Intensity 2,500 20 $180,000 180 19 $160,000 160 Lateral Length (metres) 2,000 Frac Spacing (metres) $140,000 140 18 $120,000 120 Drill
Slide 90: Ante Creek Delivering Results
Ante Creek Delivering Results Type Curve Consistency Moving Out of the Core Completions 2012 2013 2014 2015 Ante Creek Normalized Type Curves for Montney Horizontal Wells Frac spacing (m) 120 100 100 80 500 # Fracs per well 14 17 16 27 450 Avg. tonnage per frac (T) 12 14 20 22 2015 400 2014 Cost per
Slide 91: Ante Creek Development Economics
Ante Creek Development Economics 50% Rate of Return at Flat $3/GJ AECO and C$85/bbl 400 Key Metrics 350 DCET Capex per well ($MM) 4.2 Reserve Estimate (Mboe) 290 300 IP (1 mo) (boe/d) 375 IP (12 mo) (boe/d) 210 250 Half Cycle Economics (C$3/GJ) Cdn$95/bbl Cdn$85bbl BOE/d IRR (% AT) 64% 50% 200 Recyc
Slide 92: Growing Our Alberta Montney Presence
Growing Our Alberta Montney Presence Ante Creek Land Base has Grown >16x Since 2000 • Grew land position in 2014 through tuck-in acquisitions and crown land sales 2000 Ante Creek 2014 Ante Creek 21 sections 351 sections
Slide 93: Ante Creek Oil Leading Capital Efficiency
Ante Creek Oil Leading Capital Efficiency ARC’s Ante Creek Montney Capital Efficiency Outperforms Industry 1,200 30 Day Average Daily IP Rate (BOE/d) ARC Gas ARC Liquids 1,000 Other Gas Other Liquids 800 Ante Creek D&C Costs ARC $3.6 MM/well vs. Industry $5.2 MM/well(3) ARC ~70% of Industry Average
Slide 94: Ante Creek – 2014 and Beyond
Ante Creek – 2014 and Beyond Ante Creek is ~ 20% of ARC’s High Value Liquids Production 20,000 18,000 2015 Budget* • ARC’s three plants filled to 16,000 Capital ($MM) $180 capacity in late 2013 with Total (boe/d) 17,300 development drilling 14,000 Wells (HZ) 29 • Successful delineation step 12,000 o
Slide 95: Base Assets
Base Assets
Slide 96: Base Assets
Base Assets BRITISH COLUMBIA ALBERTA SASKATCHEWAN MANITOBA Redwater Pembina Southern Alberta SE Sask and Manitoba
Slide 97: Pembina
Pembina Revitalizing a Mature Oil Field *Breakeven – Cdn$ per bbl or mcf price as indicated defined as price at which NPV10 is equal to zero. *IRR – Half cycle after tax rate of return based on C$85/bbl Edm MSW and C$3/GJ AECO *Free Cash Flow – Defined as Revenue – royalties – op costs - transportat
Slide 98: Pembina Asset Details
Pembina Asset Details Large Oil in Place, Low Risk, Predictable Production Net production (boe/d) – Q3 2014 11,000 Liquids (bbls/d) 9,020 Gas (mmcf/d) 11.9 Land (Cardium net sections) 140 Working Interest ~80% Reserves (2P mmboe Cardium) 53.7 Liquids (mmbbls) 45.7 Gas (bcf) 47.9 Reserve Life Index 1
Slide 99: Operational Excellence – Pembina
Operational Excellence – Pembina Extended Reach of Horizontals with Increased Fracture Intensity Pembina Cost/frac and average fracs/well Pembina Average well length and frac spacing $70,000 30 2,100 120 $60,000 1,900 25 110 Lateral Length (metres) Frac Spacing (metres) 1,700 $50,000 20 100 Fracs/we
Slide 100: Pembina Leading Capital Efficiency
Pembina Leading Capital Efficiency ARC’s Pembina Capital Efficiency Outperforms Industry Pembina Cardium HZ IP3 Average (3 Month Rate) 800 ARC Avg Dly BOE IP3 (143 wells) 700 Others Avg Dly BOE IP3 (286 wells) 600 Pembina Cardium D&C Costs ARC $2.4 MM/well vs. Industry $2.7 MM/well(1) ARC ~84% of In
Slide 101: Pembina Outperforming Expectations
Pembina Outperforming Expectations Slickwater Completions Delivering Strong Results 2015 • Improved recovery through extended Completions 2012 2014 Budget laterals, tighter frac spacing and tailored Frac spacing (m) 90 85 80 stage-by-stage completions design # Fracs per well 15 20 25 300 Avg. tonnag
Slide 102: Pembina Development Economics
Pembina Development Economics 60% Rate of Return at $3/GJ AECO and C$85/bbl 300 Key Metrics 250 DCET Capex per well ($MM) 2.6 Reserve Estimate (Mboe) 190 IP (1 mo) (boe/d) 255 200 IP (12 mo) (boe/d) 115 Half Cycle Economics BOE/d 150 (C$3/GJ) Cdn$95/bbl Cdn$85bbl IRR (% AT) 75% 60% Recycle Ratio 4.9
Slide 103: Pembina – Free Cash Flow
Pembina – Free Cash Flow Consistent Free Cash Flow • High quality light oil – significant free cash flow to fund growth opportunities • Significant drilling inventory to sustain production over several years 250 15,000 Field Netback ($mm) Capex ($mm) Net Cash Flow 200 Production (boe/d) 12,000 $ mil
Slide 104: Pembina Oil – Buck Creek Waterflood
Pembina Oil Buck Creek Waterflood – Inclining Oil Rate and Declining GOR • Waterflood optimization has resulted in: • Inclining Oil rate trend, indicating improved flood efficiency and operational excellence • Declining GOR, showing improvement in pressure maintenance
Slide 105: Pembina Oil – NPCU Horizontal Injection Pilot
Pembina Oil NPCU Horizontal Injection Pilot – Incremental Oil Above Base Decline HZ Injection Pilot R7W5 • Injection started in Dec 2012, cumulative injection of 507 Mbbl Area of influence • Monitoring 14 T48 Wells highlighted in offsetting producers; red are included in the group production plot 5
Slide 106: Pembina – 2014 and Beyond
Pembina – 2014 and Beyond Significant Growth in Oil and Liquids Since 2009 2015 Budget* • Drilled 33 wells to the end of Q3 14,000 Capital ($MM)* $105 2014, and plan to drill 5 wells in Total (boe/d) 11,000 Q4 2014 Wells (HZ)** 32 12,000 • 32 Gross Operated hz wells 10,000 planned for full year 2015
Slide 107: SE Saskatchewan/Manitoba
SE Saskatchewan/Manitoba Solid Long Life Assets *Breakeven – Cdn$ per bbl or mcf price as indicated defined as price at which NPV10 is equal to zero. *IRR – Half cycle after tax rate of return based on C$85/bbl Edm MSW and C$3/GJ AECO *Free Cash Flow – Defined as Revenue – royalties – op costs - tra
Slide 108: SE Sask/Manitoba Asset Details
SE Sask/Manitoba Asset Details Stable Production and High Netbacks Year # Hz Wells Drilled Net production (boe/d) – Q3 2014 10,300 2009 15 Production split 98% liquids 2010 31 Land (net sections) 203 2011 45 Working Interest ~82% 2012 63 2013 48 Reserves (2P mmboe) 48 2014 Forecast 47 Reserve Life I
Slide 109: Goodlands Development Economics
Goodlands Development Economics 65% Rate of Return at Flat $3/GJ AECO and C$85/bbl 140 Key Metrics DCET Capex per well ($MM) 1.3 Reserve Estimate (Mboe) 40 120 IP (1 mo) (boe/d) 115 IP (12 mo) (boe/d) 75 100 Half Cycle Economics (C$3/GJ) Cdn$95/bbl Cdn$85bbl 80 IRR (% AT) 95% 65% BOE/d Recycle Ratio
Slide 110: SE Sask/Manitoba – Free Cash Flow
SE Sask/Manitoba – Free Cash Flow Consistent Free Cash Flow • Stable production and low capital cost • High quality light oil yields highest per boe netback in ARC’s portfolio 250 15,000 Field Netback ($mm) Capex ($mm) Net Cash Flow 200 Production (boe/d) 12,000 $ millions Boe/d 150 9,000 100 6,000
Slide 111: SE Sask/Manitoba 2014 and Beyond
SE Sask/Manitoba 2014 and Beyond Managing Pace of Development to Maximize Capital Efficiency 2015 Budget* • Drilled 36 wells to the end of Capital ($MM) $100 14,000 Q3 2014 and plan to drill 11 Total (boe/d) 11,300 wells in Q4 2014 Wells (HZ) 30 12,000 • 30 Gross Operated hz wells and one vertical i
Slide 112: 2015 Budget and Outlook
2015 Budget and Outlook
Slide 113: 2015 Capital Budget $875 Million
2015 Capital Budget $875 Million 2015 Capital Program Forecast to Deliver Record Production of 120,000-125,000 boe/d • Focus on oil and liquids-rich gas and low cost, high rate of return Montney gas development BRITISH COLUMBIA ALBERTA SASKATCHEWAN MANITOBA NE British $205MM(1) Columbia ~32 gross op
Slide 114: 2015 Production Outlook
2015 Production Outlook Growing Production in 2014 and 2015 • Managing decline to ~25% annually through paced development 140,000 120,000 100,000 Forecast 80,000 60,000 40,000 20,000 - Non-Operated (boe/d) Oil (bbl/d) Liquids (bbl/d) Gas (boe/d) *** Risks to the plan: commodity prices, timing issues
Slide 115: Growing Oil and Liquids Since 2009
Growing Oil and Liquids Since 2009 ~7% CAGR(1) Total Liquids Production 2009 - 2015F 50,000 Parkland 40,000 Montney Liquids 38% CAGR 2009-2015F Ante Creek, Tower 30,000 bbls/d Cardium 20,000 10,000 SE Sask, Manitoba, Redwater 0 2009 2010 2011 2012 2013 2014(F) 2015(F) (1) Compound annual growth rate
Slide 116: Growing Our Low Cost Gas Business
Growing Our Low Cost Gas Business ~15% CAGR(1) Total Natural Gas Production 2009 - 2015F 500,000 450,000 400,000 350,000 300,000 Mcf/d Montney Gas 250,000 33% CAGR 2009-2015F 200,000 Montney Gas 150,000 100,000 50,000 Non-Montney Gas 0 2009 2010 2011 2012 2013 2014(F) 2015(F) (1) Compound annual gro
Slide 117: Early Stages of Property Development
Early Stages of Property Development* Large Identified Opportunity for Future Growth Gross Drilling Locations 1,600 Montney > 4,000 Gross Drilling Locations 1,400 1,200 1,000 800 600 400 200 0 Dawson Parkland/ Tower Sunrise/ Sunset Ante Creek Other Montney Pembina Total Hz wells forecast to YE2014 2
Slide 118: Looking Beyond 2016
Looking Beyond 2016 Diverse Portfolio Provides Strategic Optionality • ARC has a well balanced inventory of value creating opportunities which may be pursued beyond 2016 Project Options 2016 - 2020+ • Dawson Phase 3 • Pouce Commercialization • Ante Creek Expansion • Sunrise Phase 2 Forecast • Attach
Slide 119: Financial Strategy
Financial Strategy
Slide 120: Financial Strategy
Financial Strategy Financial Flexibility Provides Optionality
Slide 121: Balance Sheet Strength
Balance Sheet Strength Targeting Debt to Cash Flow Ratio Between 1.0x to 1.5x • Targeting debt to cash flow ratio in the 1.0x to 1.5x range during “normal” commodity price cycles enables flexibility during downturn in commodity price cycle Net Debt to FFO $1,400 2.0 Net Debt to Funds from Operations
Slide 122: Low Debt Relative to Peers
Low Debt Relative to Peers Maintaining Financial Flexibility is a Core Strategy at ARC Net Debt to Cash Flow Q3 2014 3.5x 3.0x 2.5x 2.0x Average = 1.7x 1.5x 1.0x 0.5x 0.0x ARC Source: CanOils Includes: ARX, BIR, BNP, BTE, BXE, CNQ, COS, CPG, CR, CVE, ERF, HSE, IMO, LTS, PGF, PWT, PEY, SU, TET, TLM ,
Slide 123: Sustainability
Sustainability Balancing Inflows and Outflows for Long-Term Sustainability • Objective to fully fund ARC's Dividend and Sustaining Capital from Funds from Operations (“FFO”) over the long-term • Profitable Growth Capital will be funded from remaining FFO and other sources 5 Year Total Inflows & Outf
Slide 124: Dividend Policy
Dividend Policy Dividend Provides Meaningful Return to Shareholders Cumulative Dividends and Payout Ratio $5,500 120% • Designed to attract both $5,000 income and growth investors $4,500 100% • Dividend stability is core – Cumulative Dividends $ millions $4,000 only increase the dividend 80% when it
Slide 125: Multiple Sources of Debt
Multiple Sources of Debt Significant Available Credit Capacity of ~$1.1 Billion $2.1 Billion Total Credit Capacity Bank Credit Facility ($1.1 Billion Available) $2.5 • $1 Billion credit facility plus $40 Master Shelf million working capital facility LT Notes $2.0 • 12 banks including the five larges
Slide 126: Note Repayments Spread Over Time
Note Repayments Spread Over Time Debt Repayment Schedule Reduces Financing Risk • Long-term notes structured to mature over a number of years • Repayment will come from existing credit facilities Long-term Notes Principal Repayment Schedule 160.0 140.0 120.0 C$ Millions 100.0 80.0 60.0 40.0 20.0 0.0
Slide 127: Profitability & Taxation
Profitability & Taxation Profitability Through Economic Cycles • ARC has performed consistently with positive earnings through several commodity cycles • Estimated current tax as a percentage of Funds from Operations before tax is approximately 6–8 % for 2014 and 3–8 % for 2015 600 Cash Taxes Relati
Slide 128: Marketing & Financial Risk Management
Integrated Market Strategy Marketing & Financial Risk Management
Slide 129: Integrated Market Strategy
Integrated Market Strategy Physically Deliver To Most Liquid Point And Manage Price Exposure Financially Physical Marketing Financial Risk Management “Ensure the movement of ARC’s “Establish awareness of market upstream liquids and natural gas to dynamics to protect and optimize market at optimal ne
Slide 130: Crude Oil – Marketing
Crude Oil – Marketing 96% Condensate, Light and Medium Crude Oil • Maintain control into liquid market hubs to ensure flexibility and optimize price • Secured firm transportation pipeline agreements to support future development Purchasers 23% 36% Sweet Sour 41% C5+ Heavy BR North/South Processing F
Slide 131: Crude Oil – Global Supply/Demand
Crude Oil – Global Supply/Demand Ongoing Growth in Global Supply and Demand • Non-OPEC supply – US oil production reached 8.8 mmbbls/d (highest month since 1986) • OPEC supply exceeds the 30 mmbbls/d production quota: reduced global outages and a lack of supply response from Saudi Arabia • Oil deman
Slide 132: Crude Oil – Pricing
Crude Oil – Pricing Robust Economics at Current Prices • WTI and Brent prices relatively stable over the past 3 years • Recent price movement is indicator of higher expected volatility and near-term supply/demand imbalances $/bbl WTI & Brent Pricing 130 120 110 $100/bbl 100 $90/bbl 90 80 70 $75/bbl
Slide 133: Crude Oil – Canadian Pricing
Crude Oil – Canadian Pricing Relative Strength of Canadian Pricing • Although WTI price has weakened significantly, the Edmonton Mixed Sweet benchmark remains supported by a narrow differential and a strong U.S. dollar • Canadian crude differentials remain tight as increased takeaway capacity (rail
Slide 134: Crude Oil – Risk Management
Crude Oil – Risk Management WTI Collars Provide Protection Below $90/Bbl in 2014/2015 • Forward prices currently limit crude oil hedging opportunities Production Guidance and Crude Oil Hedged Volume bbl/d Hedged Hedging Limit 2015 Guidance 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,00
Slide 135: Natural Gas – Commodity Marketing
Natural Gas – Commodity Marketing Diversified Sales Point and Purchasers of ARC’s Natural Gas • Sales are typically 70%/30% monthly/daily dependent upon operations and market environment • Secured adequate take-away to support development until 2019 Destination 7% 70% 23% Station 2 Chicago AECO Purc
Slide 136: Natural Gas – Supply/Demand
Natural Gas – Supply/Demand Continued Growth in Supply and Demand • U.S. Supply continues to grow, led by the Marcellus and Utica; YTD production has averaged 67.7 Bcf/d, a 3.0 Bcf/d gain over the same period in 2013 • U.S. Demand is also growing, but at a slower pace than supply; in the coming year
Slide 137: Natural Gas – Pricing
Natural Gas – Pricing Normal Price Range Affected By Seasonal Factors • Over the long-term the balance of increased structural demand from power generation, industrial sector, Mexican exports and LNG exports and growing supply are defining the balance and equilibrium price range • Seasonal demand fr
Slide 138: Natural Gas – Risk Management
Natural Gas – Risk Management Long-Term Gas Hedge Position Supports Returns on Capital Program • 2014-2019: Nymex Henry Hub price swaps and collars provide floors at $4.00 and ceilings as high as $5.00 • 2014-2019: AECO basis hedged at approximately 90% of Nymex prices Production Guidance and Natura
Slide 139: NGL – Commodity Marketing
NGL – Commodity Marketing NGL Pipeline & Fractionation Capacity Secured ARC’s NGL Exposure • NGL revenue (~5,000 bbl/d) makes up approximately 4% of ARC’s revenue • Ensuring NGL production moves to market protects ARC’s oil & gas production Planned Capacity Expansions • Infrastructure players have a
Slide 140: Hedging Program Results
Hedging Program Results Hedging Program Provides Level of Certainty of Cash Flows and Business Plan Realized Hedging Gains & Losses $100 20.0% $80 $75.8 16.0% $65.4 $66.4 $60 12.0% $40 8.0% $19.4 $15.6 $20 4.0% -6.2% $0 0.0% 3.9% 9.8% 9.0% 9.2% 1.8% ($20) -4.0% ($40) Gains/Losses (Millions) -8.0% %
Slide 141: Hedge Positions – November 5, 2014
Hedge Positions – November 5, 2014 Active Hedging Program Supports Business Plan Summary of Hedge Positions as at November 5, 2014 (1) Remainder of 2014 2015 2016 - 2017 2018 2019 Crude Oil (2) – WTI: (US$/bbl) US$/bbl bbl/d US$/bbl bbl/d US$/bbl bbl/d US$/bbl bbl/d US$/bbl bbl/d Ceiling $100.00 18,
Slide 142: Summary
® Summary
Slide 143: 2014 and 2015 Guidance
2014 and 2015 Guidance 2015 Production of 120,000 – 125,000 boe/day 2014 Q3 YTD 2014 Guidance Actuals 2015 Guidance Oil (bbls/d) 35,000 - 37,000 36,216 37,000 - 39,000 Condensate (bbls/d) 3,500 - 3,800 3,741 3,80 - 4,300 Gas (mmcf/d) 405 - 415 397.3 445 - 460 NGL’s (bbls/d) 4,200 - 4,500 4,331 4,700
Slide 144: Value Proposition
Value Proposition Clear Line of Sight to Long-term Value Creation
Slide 145: Questions
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Slide 146: Appendix
APPENDIX
Slide 147: Q3 2014 Operational and Financial Performance
Q3 2014 Operational and Financial Performance Record Production, Strong Financial Results Three Months Ended Nine Months Ended September 30 September 30 (CDN$ millions, except per share and per boe amounts) 2014 2013 2014 2013 Production (boe/d) 115,530 94,515 110,501 94,471 Gas 61% 62% 60% 61% Liqu
Slide 148: Significant Land & Drilling Inventory
Significant Land & Drilling Inventory Considerable Future Opportunity Avg Well Net Net Drilling Spacing Primary Zones Developed Undeveloped Total Net 2P Reserves Location (Metres) Area Sections(2) Sections(2) Sections(2) (Mmboe) Inventory(1) NEBC Montney 177 323 500 405 200-400 3,100 Montney Alberta
Slide 149: Looking Forward to 2015 and 2016
Looking Forward to 2015 and 2016 Continued Focus on Paced Development Assuming economic conditions remain similar to the current outlook, 2015 would likely entail the following: Ante Creek • Prove up future development and delineate large land base through step out locations • Continue development o
Slide 150: Reserves and Resources Disclosure
Reserves and Resources Disclosure • All reserves and resources volumes for the BC Montney and elsewhere in this presentation are, unless indicated otherwise, as at December 31, 2013 as evaluated by GLJ Petroleum Consultants Ltd. in accordance with the definitions, standards and procedures contained
Slide 151: Definitions of Oil and Gas Reserves and Resources
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 analysis of drilling, geological, geophysical and engineering data; the
Slide 152: Definitions of Oil and Gas Reserves and Resources
Definitions of Oil and Gas Reserves and Resources Economic Contingent Resources (“ECR” are those contingent resources which are currently economically recoverable. Undiscovered Petroleum Initially-In-Place (“UPIIP”) is that quantity of petroleum that is estimated, on a given date, to be contained in
Slide 153: For further information about ARC Resources
This presentation contains forward-looking statements that may be identified by words like “outlook”, “estimates” and similar expressions. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance.