ARC Resources — Barclays Capital CEO Energy-Power Conference 2011
34 slides from ARC Resources's conference presentation, September 2011
Slide 1: Barclays Capital CEO Energy-Power Conference
Barclays Capital CEO Energy-Power Conference New York September 6-8, 6-8 2011
Slide 2: Forward Looking Information
8/26/2011 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 explora
Slide 3: Why Invest in ARC Resources?
8/26/2011 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 i
Slide 4: Key Reserve Information
8/26/2011 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) -1
Slide 5: Property Overview: British Columbia Montney
8/26/2011 PROPERTY OVERVIEW BRITISH COLUMBIA MONTNEY 4
Slide 6: Montney Lands: Major Growth Engine
8/26/2011 MONTNEY LANDS MAJOR GROWTH ENGINE • Lands evaluated to date are just a fraction of our total Montney lands • ARC uses a 3% porosity cut-off, currently reassessing at lower cut-offs (industry 0 – 3%) Area Net Acres Net DGIIP Reserves Net Sections Production Liquids q Sections (Bcf) P+P(Bcf)
Slide 7: Montney Production – ARC Is Currently Third Largest
8/26/2011 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 B
Slide 8: Horizontal Wells – Day IP Rates
8/26/2011 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 To
Slide 9: Regional Schematic Cross Section
8/26/2011 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 ac
Slide 10: Dawson – Peak Rates Over Time
8/26/2011 DAWSON – PEAK RATES OVER TIME • ARC typically restricts Dawson Peak IP vs. Peak IP Month (Filtered + H1 2011 Adjusted IP) 7000 production rates to AVG 5.6 approximately i l 5.44 mmcfd f Peak Calendar Month Gas Rate (mcfd) 6000 AVG 5.0 AVG 5.5 mmcfd mmcfd mmcf per day AVG 5.2 mmcfd AVG 4.5
Slide 11: Dawson – Deep Inventory of Wells Ready for Production
8/26/2011 DAWSON – DEEP INVENTORY OF WELLS READY FOR PRODUCTION Status Vertical Horizontal Total Producing 4 42 46 Shut In 72 19 91 Drilled (not completed) 1 3 4 Tied In (have not been on production) 0 4 4 Completed (completed not tied in) 0 4 4 Status is as of June 30, 2011 • ARC has a deep invento
Slide 12: Parkland – Liquids Rich Gas
8/26/2011 PARKLAND – LIQUIDS RICH GAS 0.8 TCF GAS • 0.8 Tcf of gas classified as DGIIP - P+P Reserves of 227 Bcfe booked on 17 net sections • Current production of 40 mmcf/d plus 1,200 b/d liquids FIELD LIQUIDS CONTENT (BBLS/MMCF) Parkland 30+ *Swan 2 *Septimus 27 Dawson 5 Sunrise 1 *Swan & Septimus
Slide 13: Parkland Development Economics
8/26/2011 PARKLAND DEVELOPMENT ECONOMICS 7,000 P10 Type Curve P90 6,000 IP (1mo) MMcf/d 6.4 5.0 3.7 5,000 Gas Rate mcf/d IP (12mo) Mcf/d 2.0 1.6 1.1 4,000 EUR Bcf 5.6 4.8 3.3 3,000 2,000 1,000 0 0 2 4 6 8 10 12 14 16 18 20 22 24 Months P10 Producers Type Curve P90 Producers Capital Costs ($k) Econom
Slide 14: West Montney Resource
8/26/2011 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 operat
Slide 15: Attachie – New Opportunity
8/26/2011 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 • A thi
Slide 16: Ante Creek – Another Montney Success
8/26/2011 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 oil bearing g shale that sits on top
Slide 17: Ante Creek Horizontal Wells
8/26/2011 ANTE CREEK HORIZONTAL WELLS 900 • New horizontal oe/d) Gas 800 wells are y IP Gas and Oil Rates (bo Oil 700 consistently 600 coming on- 500 stream in the 400 300 to 400 300 boe/d range, 200 with the best 100 wells in excess 30 Day of 500 boe/d 0 00/11-24-065- 00/05-13-065- 00/08-17-067- 00
Slide 18: Ante Creek Future Opportunities
8/26/2011 ANTE CREEK FUTURE OPPORTUNITIES R26 R25 R24 R23 R22W5 T69 W G _ T69 • Land holding of 245 gross and 238 net 1 36 6 31 1 36 6 31 36 1 6 31 1 36 6 31 sections GW T68 G J F FE T68 • Horizontal multi stage completions have JL F G been very successful – 30 day production 1 36 6 31 1 36 6 31 C G
Slide 19: Pembina Cardium
8/26/2011 PEMBINA CARDIUM 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
Slide 20: Pembina – Cardium Structural Cross Section
8/26/2011 PEMBINA – CARDIUM STRUCTURAL CROSS SECTION A A 1375m CARDIUM 1494m UNIT Rge 8 Rge 7 Rge 6W5 Twp 49 Conglomerate unit Upper Sand Unit Twp 48 Middle Unit Twp 47 5 km Lower Sand Unit PEMBINA HORIZONTAL DRILLING PLANS • 2010 drilled 25 horizontals and 3 vertical wells • Initial production resu
Slide 21: Pembina – First Month Initial Production Rates
8/26/2011 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 22: Pembina – Third Month Initial Production Rates
8/26/2011 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 23: Horizontal Well Results
8/26/2011 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 22
Slide 24: Summary
8/26/2011 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 ex
Slide 25: 2011 Capital Program
8/26/2011 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 Explorat
Slide 26: 2011 Guidance and Hedging Update
8/26/2011 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
Slide 27: Montney Lands: Major Growth Engine
8/26/2011 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 Con
Slide 28: Dawson Production and 2011 Budget Plans
8/26/2011 DAWSON PRODUCTION 165 MMCF/D IN Q2 2011 180.0 Production through Phase 1 was 150.0 temporarily interrupted during the integration of Phase 2 mmcf/d 120.0 90.0 60.0 30.0 0.0 • First 60 mmcf/d gas plant on stream May 2010, second 60 mmcf/d gas plant started up in April, 2011 – currently runn
Slide 29: 2010 Dawson Gas Plant; Parkland 2011 Budget Plans
8/26/2011 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/operat
Slide 30: Sunrise/Sunset/Septimus 2011 Budget Plans
8/26/2011 SUNRISE/SUNSET/SEPTIMUS 2011 BUDGET PLANS Capital: • Total Capital $25 MM Drilling g ((3 wells): ) • Horizontal 2 • Vertical 1 Production: • 7 mmcf/d third party at Sunrise Strategy: • Sunrise/Sunset: Tie-in 7 existing vertical and horizontal wells to 3rd party – 15 mmcf/d contracted • Ord
Slide 31: Swan Hills
8/26/2011 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 32: Virtual field tour and forward-looking statements
8/26/2011 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 per
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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