Arc Resources — Investor Presentation (September 2011)
34 slides from Arc Resources's investor presentation, September 2011
Slide 1: Investor Presentation September 2011
Investor In estor Presentation September, 2011
Slide 2: Forward Looking Information
9/6/2011 ARC RESOURCES FORWARD LOOKING INFORMATION 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 explorat
Slide 3: Why Invest in ARC Resources?
9/6/2011 WHY INVEST IN ARC RESOURCES? Production History • Top-tier, growth plus income opportunity 90,000 Gas Liquids • Experienced p management g team 75,000 BOE/D 60,000 • Track record of delivering results 45,000 30,000 • Entering a new era of organic growth 15,000 • Added 60 mmcf/d at Dawson in
Slide 4: Key Reserve Information
9/6/2011 KEY RESERVE INFORMATION 19% COMPOUND ANNUAL GROWTH • Reserves as of December 31, 2010* (mmboe) - Proved Producing 213 (104 mmboe liquids, 652 bcf gas) - Total Pro Proved ed 336 (124 mmboe liquids, liq ids 1,274 1 274 bcf gas) - Proved Plus Probable 487 (167 mmboe liquids, 1,925 bcf gas) -15
Slide 5: Property Overview: British Columbia Montney
9/6/2011 PROPERTY OVERVIEW BRITISH COLUMBIA MONTNEY 4
Slide 6: Montney Lands: Major Growth Engine
9/6/2011 MONTNEY LANDS MAJOR GROWTH ENGINE • ARC had our independent reserves evaluator assess the resource potential of our main BC Montney lands, excluding Attachie, Tower and Doe. Based on a 3% porosity cut-off: Reserves and Resources - December 31, 2010 (1) Estimated E ti t d Economic E i C Cont
Slide 7: Montney Lands: Major Growth Engine
9/6/2011 MONTNEY LANDS MAJOR GROWTH ENGINE • Dawson and the West Montney lands are a significant g g growth engine g for ARC • With greater than 10 Tcf of gas classified as DGIIP, ARC’s current plans call for 0.8 Tcf the construction of two 60 5.5 Tcf mmcf/d gas plants over the 2012 – 2014 time peri
Slide 8: Montney Production – ARC Is Currently Third Largest
9/6/2011 MONTNEY PRODUCTION – ARC IS CURRENTLY THIRD LARGEST 500 Field (mmcfe) 450 400 D Dawson 165 350 Parkland 48 300 Pouce 15 250 Sunrise* 7 200 Total 245 150 *non-operated 100 50 0 Source: BMO Report (Geoscout) BC MONTNEY WELLS ARC IS THIRD MOST ACTIVE DRILLER 400 350 300 250 200 150 100 50 0 BC
Slide 9: Horizontal Wells – Day IP Rates July 2011
9/6/2011 HORIZONTAL WELLS – 30 DAY IP RATES JULY 2011: Glacier - Town 12000 10000 ARC Others 8000 Production Rate (mcf/d) ARC P50 6000 P50 4000 2000 0 1 108 215 322 429 536 643 P50 – All Wells 3.4 mmcf/d • Dawson/ Parkland – 5.1 mmcf/d MONTNEY TYPE CURVE GEOLOGY MATTERS 5000 Dawson 4500 Parkland Tow
Slide 10: Regional Schematic Cross Section
9/6/2011 REGIONAL SCHEMATIC CROSS SECTION X Y Total Net Pay>3% (m) 103 78 43 36 Total Net Pay>6% (m) 30 2 23 4 DGIIP (BCF/Section)* 100 60 45 20 A Y Lower Upper Montney B Montney X E [1] Discovered Gas Initially in Place (“DGIIP”) is the quantity of gas that is estimated to be contained in known acc
Slide 11: Dawson – Test Results Stay Strong
9/6/2011 DAWSON – TEST RESULTS STAY STRONG • ARC’s Dawson completions were considerably improved post 2008 with both and increase in test rates and test pressures DAWSON – PEAK RATES OVER TIME • ARC typically restricts Dawson Peak IP vs. Peak IP Month (Filtered + H1 2011 Adjusted IP) 7000 production
Slide 12: Dawson – Staying Flat Longer
9/6/2011 DAWSON – STAYING FLAT LONGER • ARC typically restricts production rates to approximately 55.4 4 mmcf per day • Over the past 2 years, the length of time that the Dawson wells are producing at greater than 5 mmcf/d has increased. • Typical wells are now producing at least 1.0 Bcf (200 days a
Slide 13: Dawson Development Economics
9/6/2011 DAWSON DEVELOPMENT ECONOMICS 7,000 P10 Type Curve P90 IP (1mo) MMcf/d 5.9 5.0 3.3 6,000 IP (12mo) MMcf/d 4.4 3.7 2.1 5,000 EUR (Bcf) 7.7 6.2 3.8 Gas Rate mcf/d 4,000 3,000 2,000 (26 mos) 1,000 0 (49 mos) 0 2 4 6 8 10 12 14 16 18 20 22 24 Months P10 Producers Type Curve P90 Producers Capital
Slide 14: 2010 Dawson Gas Plant; Parkland – Liquids Rich Gas
9/6/2011 2010 DAWSON GAS PLANT • Dawson 5-35 Gas Plant (Phase 2) – Construction was completed on time and on budget – Early April 2011 start-up of Phase 2 Dawson plant, with full production by the end of the month Progress of the gas plant can be tracked at: http://www.arcresources.com/en-ca/operati
Slide 15: Parkland – Can a Single Well Drain the Full Vertical Section?
9/6/2011 PARKLAND – CAN A SINGLE WELL DRAIN THE FULL VERTICAL SECTION? • At Parkland, the Upper Montney is considerably thicker than at Dawson. We believe the lower-most sands are not contributing to production – a horizontal well has been drilled into these lower sands to test this theory. IF corre
Slide 16: Parkland 2011 Budget Plans; Tower
9/6/2011 PARKLAND 2011 BUDGET PLANS Capital: • Total Capital $67 MM Drilling (13 wells): • Horizontal 11 • Vertical 2 • Oil/Gas 0/13 Production: • Year-End 2010 8,000 boe/d • Year-End 2011 10,070 boe/d • Year Average 8,435 boe/d Strategy: • Grow production. • Evaluate liquids potential of undevelope
Slide 17: West Montney Resource 5.5 Tcf Gas
9/6/2011 WEST MONTNEY RESOURCE 5.5 TCF GAS • 5.5 Tcf of gas classified as DGIIP in Septimus, Sunrise/Sunset and Sundown - P+P Reserves of 253 Bcf at year-end 2010 (approximately 5 per 5.5 Tcf cent of DGIIP) • Current production of pp y 7 mmcf/d net approximately to ARC through small, partner operate
Slide 18: Attachie – New Opportunity
9/6/2011 ATTACHIE ATTACHIE – NEW OPPORTUNITY UNDEFINED POTENTIAL • Prospective land base of 106 sections • First horizontal well tested 10 mmcf/d with 30 bbls/mmcf of liquids at 9 Mpa • ARC has drilled a second horizontal well on the east side of the block that is currently waiting on test equipment
Slide 19: Ante Creek – Another Montney Success
9/6/2011 ANTE CREEK – ANOTHER MONTNEY SUCCESS ANTE CREEK - ANOTHER MONTNEY SUCCESS • ARC entered the Ante Creek area through an acquisition in late 2000 • Since then ARC has made several acquisitions to build a 238 net section land base • Lands may also be prospective for the Nordegg formation – an
Slide 20: Ante Creek – Another Montney Growth Story
• • 30 Day y IP Gas and Oil Rates (bo oe/d) , - 1,000 2,000 3,000 4,000 5,000 6,000 8,000 9,000 7,000 0 100 200 300 400 500 600 700 800 900 2001 1 01 00/11-24-065- 25W5 2001 1 04 Oil 00/05-13-065- 2001 1 07 Gas 25W5 2001 1 10 00/08-17-067- 2002 2 01 24W5 2002 2 04 00/06-23-065- 25W5 2002 2 07 02/02-
Slide 21: Ante Creek Measured Initial Pressure; Future Opportunities
9/6/2011 ANTE CREEK MEASURED INITIAL PRESSURE @ HORIZONTAL WELLS Ante Creek North Triassic E Pool 18000 16000 14000 Well Initial Pressure 12000 Pool Virgin Pressure (kPa) Pressure = 16.3MPa 10000 8000 Infill Horizontals Encountering Initial Pressure that is at or near Pool Virgin Pressure 6000 HWell
Slide 22: Ante Creek Development Economics
9/6/2011 ANTE CREEK DEVELOPMENT ECONOMICS Case Top 3 Avg. Well Bottom 3 600 IP (1 mo) boe/d 550 385 285 IP (12 mo) boe/d 350 235 140 E/d) 500 EUR (mboe) 445 265 140 Normalized Production Rate (BOE 400 300 200 100 0 0 3 6 9 12 15 18 21 24 27 30 33 36 Months Type Curve T C b based d on A Average off 1
Slide 23: Pembina – ARC's Holdings
9/6/2011 PEMBINA ARC’S HOLDINGS Gross Operated Wells in the Pembina Cardium # Wells Penn West 2,458 39% ARC 1,423 23% Bonterra 694 11% Imperial 362 6% Enerplus 334 5% PetroBakken 118 2% • ARC is the second largest operator in the Pembina area • Pembina has been a core holding of ARC since inception
Slide 24: Pembina Cardium Formation; Horizontal Drilling Plans
9/6/2011 PEMBINA – CARDIUM FORMATION Cardium Cardium Conglomerate Sandstone PEMBINA HORIZONTAL DRILLING PLANS • 2010 drilled 25 horizontals and 3 vertical wells • Initial production results are encouraging – average IP rates are 150 – 200 boe/d but with variability • Geology of the Pembina field is
Slide 25: Pembina – First Month Initial Production Rates
9/6/2011 PEMBINA – FIRST MONTH: INITIAL PRODUCTION RATES – ALL WELLS Cardium Area Initial Production Average (Month 1) Rate ARC’s Wells Median Well – approximately 170 b/d PEMBINA – FIRST MONTH INITIAL PRODUCTION RATES – ARC WELLS ARC’s Cardium Area Initial Production Average (Month 1) Rate MEDIAN (
Slide 26: Pembina – Third Month Initial Production Rates
9/6/2011 PEMBINA – THIRD MONTH: INITIAL PRODUCTION RATES – ALL WELLS Cardium Area Initial Production Average (Month 3) Rate ARC’s Wells Median Well – approximately 140 b/d PEMBINA – THIRD MONTH: INITIAL PRODUCTION RATES – ARC WELLS ARC’s Cardium Area Initial Production Average (Month 3) Rate MEDIAN
Slide 27: Horizontal Well Results
9/6/2011 HORIZONTAL WELL RESULTS • Given the vertical and horizontal variability in the reservoir, it is not surprising that there is great variability in production results HORIZONTAL WELL RESULTS ARC WELLS ONLY 26
Slide 28: Swan Hills
9/6/2011 SWAN HILLS SWAN HILLS • Testing various parts of the reef on non-operated lands • 8 ((gross)) partner t wells ll drilled in 2010 • 12 (gross) partner wells planned for 2011 • 2011 Budget on operated lands – 2 horizontal wells – 2 multi-stage g acid frac recompletions on existing horizontal
Slide 29: Summary
9/6/2011 SUMMARY ARC RESOURCES • A Leading oil and gas entity as measured by: • Quality of assets • Leadership • Long-term return to investors • Risk managed value creation • We expect to continue to provide both growth and income to our investors • Near-term growth in production and reserves is exp
Slide 30: Appendix: 2011 Capital Program
9/6/2011 APPENDIX 2011 CAPITAL PROGRAM TARGETS 12 PER CENT GROWTH ($ Millions) 2009 (a) 2010(a) 2011(b) Development 187 354 416 Development – Facilities 73 72 70 Maintenance 11 15 29 Optimization 8 11 18 Land & Seismic 11 65 60 Unconventional Gas 16 1 5 Enhanced Oil Recovery (EOR) 23 18 27 Explorati
Slide 31: 2011 Guidance; Hedging Update
9/6/2011 2011 GUIDANCE Production 2009 (Actual) 2010 (Actual) 2011 (Budget) Total (boe/d) 63,538 73,954 80,000 – 85,000 Costs and Expenses ($/boe) 2009 (Actual) 2010 (Actual) 2011 (Budget) Operating costs 10.19 9.70 9.40 – 9.70 Transportation costs 0.89 1.10 1.10 – 1.20 Cash G&A expenses 2.26 2.95 2
Slide 32: Virtual Field Tour; Forward-Looking Statements
9/6/2011 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 perf
Slide 33: Financial and Operational Highlights
FINANCIAL AND OPERATIONAL HIGHLIGHTS QUARTERLY HISTORICAL REVIEW (Cdn $ millions, except per share amounts) 2011 2010 2009 FINANCIAL Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Sales of crude oil, natural gas 374.9 324.7 329.3 293.6 276.7 314.1 278.6 239.2 and natural gas liquids Per share (1) 1.31 1.14 1.16 1.10 1.09
Slide 34: Corporate and Shareholder Information
CORPORATE AND SHAREHOLDER INFORMATION DIRECTORS EXECUTIVE OFFICE CORPORATE CALENDAR (3) (4) (6) ARC Resources Ltd. Mac H. Van Wielingen Chairman 1200, 308 – 4th Avenue S.W. 2011 (1) (4) (6) Calgary, Alberta T2P 0H7 Walter DeBoni November 2, 2011 Vice-Chairman Telephone: (403) 503-8600 2011 Q3 Result
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