March 2019 FOCUSED INVESTOR PRESENTATION

Transcription

1 March 219 FOCUSED INVESTOR PRESENTATION 1

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3 Contact Information & Advisory Statements Capital Markets & Investor Relations Bevin Wirzba Martha Wilmot General Investor Enquiries Senior Vice President, Business Development & Capital Markets Investor Relations Analyst Forward-looking Information and 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 drilling and other exploitation plans for 219 and beyond, and related production expectations, costs and cash flow, expenses, our plans for constructing and expanding facilities, the volume of ARC's oil and gas reserves and the volume of ARC's oil and gas resources in the Montney, the recognition of additional reserves and the capital required to do so, the life of ARC's reserves, the volume and product mix of ARC's oil, liquids and gas production, future results from operations and operating metrics. These statements represent Management s expectations or beliefs concerning, among other things, future operating results and various components thereof or the economic performance of ARC. The projections, estimates and beliefs contained in such forward-looking statements are based on Management's assumptions relating to the production performance of ARC s oil and gas assets, the cost and competition for services, the continuation of ARC s historical experience with expenses and production, changes in the capital expenditure budgets, future commodity prices, continuing access to capital and the continuation of the current regulatory and tax regime in Canada and necessarily involve known and unknown risks and uncertainties, such as changes in oil and gas prices, infrastructure constraints in relation to the development of the Montney, risks associated with the degree of certainty in resource assessments and including the business risks discussed in ARC s annual and quarterly MD&A and other continuous disclosure documents, and related to Management s assumptions, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause actual results to differ materially from those predicted. Other than the 219 Guidance, which is discussed quarterly, ARC does not undertake to update any forward-looking information in this document whether as to new information, future events or otherwise except as required by securities laws and regulations. We have adopted the standard of six thousand cubic feet of natural gas to one barrel of oil ratio when converting natural gas to barrels of oil equivalent ("boe"). Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different than the energy equivalency of the 6:1 conversion ratio, utilizing the 6:1 conversion ratio may be misleading as an indication of value. Non-GAAP Measures Throughout this presentation, ARC uses the terms operating netback ( netback ) and return on average capital employed ( ROACE ) to analyze financial and operating performance. These non-gaap measures do not have any standardized meaning prescribed under IFRS and therefore may not be comparable to similar measures presented by other entities. Operating Netback ( Netback ) ARC calculates netback on a total and per boe basis as commodity sales from production less royalties, operating and transportation expenses. ARC discloses netbacks both before and after the effect of realized gains or losses on risk management contracts. Realized gains or losses represent the portion of risk management contracts that have settled in cash during the period and disclosing this impact provides Management and investors with transparent measures that reflect how ARC s risk management program can impact its netback. Management believes that netback is a key industry benchmark and a measure of performance for ARC that provides investors with information that is commonly used by other crude oil and natural gas producers. The measurement on a per boe basis assists Management with evaluating operating performance on a comparable basis. Return on Average Capital Employed ARC calculates ROACE, expressed as a percentage, as net income plus interest and total income taxes (recovery) divided by the average of the opening and closing capital employed for the 12 months preceding period end. Capital employed is the total of net debt plus shareholders equity. ROACE since inception is the annual average net income plus interest and total income taxes (recovery) for the years 1996 to 218 divided by the average of the opening and closing capital employed over the same period. Refer to the "Capital Management" note in ARC s financial statements for additional discussion on net debt. ARC uses ROACE as a measure of long-term operating performance, to measure how effectively Management utilizes the capital it has been provided and to demonstrate to shareholders the sustainability of its business model and that capital has been invested profitably over the long term. Other Definitions Throughout this presentation, ARC uses the terms sustaining capital and growth capital. These measures do not have any standardized meaning and therefore should not be used to make comparisons to similar measures presented by other entities. Sustaining Capital Sustaining capital refers to capital expenditures to maintain production from existing facilities at current production levels. Growth Capital Growth capital refers to capital expenditures that result in increased production levels at existing facilities or increased production from new facilities and infrastructure required to support higher production levels. Corporate Profile Corporate Summary Production (Q4 218) 136,52 boe/day ARC is a Canadian oil and gas producer in its 23 rd year of delivering on its disciplined, returns-focused value proposition. Reserves (2P Gross YE 218) (1) 879 MMboe Montney Land Base Reserve Life Index (2P) (1)(2) 17.4 years BC AB Monthly Dividend $.5 per share Annualized Returns since Inception (3) 1% Market Summary Ticker Symbol Average Daily Volume (4) Shares Outstanding Enterprise Value (5)(6) Net Debt (5)(6) Net Debt to Funds from Operations (6)(7) TSX: ARX 3.4 million 353 million $4.2 billion $72.7 million.9 times Dry Gas Oil and Liquids (1) Refer to Reserves and Resources Disclosure and Definitions of Oil and Gas Reserves and Resources in the Appendix to this presentation. (2) Based on 219 production guidance midpoint of 138,5 boe/day. (3) Annualized total return to February 28, 219, including January dividend, and assuming reinvestment of dividends in ARC shares. (4) Daily average trading volume for the trailing six month period ended February 28, 219. (5) Market capitalization as at February 28, 219 and net debt as at December 31, 218. (6) Refer to the Capital Management note in ARC s financial statements. (7) Based on annualized funds from operations for the year ended December 31, 218 and net debt as at December 31, 218. Condensate-rich Gas 3/1/219 1

4 218 Results & 219 Guidance 218 Financial and Operational Results Were in Line, or Better Than, Guidance Production 218 Guidance 218 Actuals 219 Guidance Crude oil (bbl/day) 23, - 24, 23,46 18, - 22, Condensate (bbl/day) 7, - 7,5 7,281 7,5-8,5 Crude oil and condensate (bbl/day) 3, - 31,5 3,741 25,5-3,5 Natural gas (MMcf/day) NGLs (bbl/day) 6,5-7, 6,955 6, - 6,5 Total production (boe/day) 131, - 133, 132, , - 142, Expenses ($/boe) Operating Transportation G&A expenses before share-based compensation plans G&A - share-based compensation plans (1) Interest Current income tax (per cent of funds from operations) (2) Capital expenditures before land purchases and net property acquisitions (dispositions) ($ millions) (3) Land purchases and net property acquisitions (dispositions) ($ millions) N/A (195.) N/A Weighted average shares (millions) (1) Comprises expenses recognized under the Restricted Share Unit and Performance Share Unit Plans, Share Option Plan, and Long-term Restricted Share Award Plan, and excludes compensation under the Deferred Share Unit Plan. In periods where substantial share price fluctuation occurs, G&A expenses are subject to greater volatility. (2) The current income tax estimate varies depending on the level of commodity prices. (3) Land expenditures and net property acquisitions and dispositions are not included as these amounts are unbudgeted. Lookback to 214 Since 214, ARC Has Delivered Long-term Shareholder Value with Its Share Count Unchanged since 216 Dividends Production Portfolio Optimization Cost Control Financial Strength >$1 billion in dividends Current yield of 6% Fully funded Increased production by 18% Replaced ~2% of produced reserves Sold 2, boe/day of noncore assets for net proceeds of $1 billion to fully fund growth through mid-22 Dawson I & II Dawson IV Ante Creek Reduced operating expenses by 33% Reduced debt by 45% Maintained net debt to funds from operations below 1.x 3/1/219 2

5 ARC Has Delivered on Its Commitments Looking Forward, ARC s Plan Remains Focused on Profitability, Sustainability, and Creating Optionality for the Long Term Monthly dividend of $.5 per share Brought on Dawson Phase III Sustained Montney businesses Execute capital program of $775 million Sold Saskatchewan assets Rebuilt liquids production from divestments Built 3,5 bbl per day battery at Attachie West Bring on Sunrise Phase II to full capacity Eliminated DRIP and SDP plans Achieved success in Lower Montney and Attachie Completed Sunrise Phase II (6 MMcf per day in service in Q4) Bring on Dawson Phase I & II liquidshandling upgrade 118,671 boe per day 122,937 boe per day Parkland-Dawson interconnect in service Divested non-core assets including Redwater 132,724 boe per day Progress multiple largescale projects, leading to per share production and cash flow growth Dawson Phase IV Ante Creek expansion Attachie West Phase I Maintain Share Count Cash Flow per Share Growth Is Critical ARC s Three-year Plan Three-year Capital Investment Program Will Result in Meaningful Liquids Production and Cash Flow per Share Growth Years Execute capital program of $775 million Bring on Dawson Phase IV in Q2 Bring on Attachie West Phase I Dividend Average $21 million Bring on Sunrise Phase II to full capacity Bring on Ante Creek expansion in Q2 Progress next major capital project Sustaining capital Average $4 million Bring on Dawson Phase I & II liquidshandling upgrade Progress multiple largescale projects, leading to per share production and cash flow growth Dawson Phase IV Ante Creek expansion Attachie West Phase I Progress Attachie West Phase I Growth capital Average $35 million Three-year Production CAGRs Total: >1% Condensate: >4% NGLs: >25% Natural gas: >1% Crude oil: <5% decline Maintain Share Count Consider Development, Share Buybacks, and Increasing Dividend (1) Sustaining and growth capital do not have any standardized meaning and therefore should not be used to make comparisons to similar measures presented by other entities. Refer to Other Definitions in the Advisory Statements to this presentation. 3/1/219 3

6 Building Sustainable Businesses in the Montney ARC s Production Compound Annual Growth Rate from 211 to 218 Is 14 Per Cent after Adjusting for Dispositions Montney Businesses Attachie West Phase I Montney Production Cardium & Non-core Production Dawson Phase IV Ante Creek Expansion Sunrise Phase II Dawson Phase I & II Upgrade Dawson Phase I Dawson Phase II Ante Creek Phase I Parkland Tower Phase I Sunrise Phase I Parkland Tower Battery Upgrade Dawson Phase III Sunrise Phase II 29 Non-core Dispositions Q4 219 Q2 22 Q ~$575 Million Facility Investment $36 Million Facility Investment 54 MMcf/day of Natural Gas Capacity 17.5 Mbbl/day of Liquids Capacity 165 MMcf/day of Natural Gas Capacity 3 Mbbl/day of Liquids Capacity ARC s Focus Has Improved The Results Are Clear Delivering Industry-leading Returns via per Share Growth and Dividends Disciplined Capital Allocation Sustaining Capital Requirements (1) 27% Three-year Average 2P F&D Costs (2) F % Focus on Efficiency Improvements Physical Market Access and Financial Risk Management Net Well Count Multiple Direct Sales Points across North America for liquids and natural gas production 57% Operating Expenses F ~$.9 billion of realized cash gains on risk management contracts since 29 46% (1) Sustaining capital does not have any standardized meaning and therefore should not be used to make comparisons to similar measures presented by other entities. Refer to Other Definitions in the Advisory Statements to this presentation. (2) Excludes future development capital. 3/1/219 4

7 Creating a Sustainable Dividend-paying E&P Company ARC s continued focus on maintaining a strong balance sheet, targeting a 25 per cent payout ratio, improving capital efficiencies to preserve operating netbacks, targeting decline rates below 3 per cent, and delivering superior full-cycle corporate returns will support profitable future growth Maintaining Balance Sheet Strength Targeting a Payout Ratio (1) of 25 Per Cent $ millions 1,4 1,2 1, Net Debt to Funds from Operations Ratio Cumulative Dividends ($ billions) Cumulative Dividends and Historic Payout Ratio 218 Payout Ratio of 26% % 1% 8% 6% 4% 2% % Payout Ratio Net Debt (LHS) Funds From Operations (LHS) Net Debt to Funds from Operations (RHS) Cumulative Dividend (LHS) Payout Ratio (before DRIP and SDP) (RHS) Improving Capital Efficiencies to Preserve Operating Netbacks Delivering Full-cycle Asset Level Returns and Corporate Return on Average Capital Employed (2) 6 6, Operating Netback ($/boe) Preserve Operating Netbacks Improve Capital Efficiencies F 5, 4, 3, 2, 1, Capital Efficiency ($/boe/day) After-tax Rate of Return Single-well Economics (Half-cycle) Proportional Facility and Appropriate Timing Included: Project Economics (Full-cycle) Corporate Costs ROACE of 1% since Inception Operating Netback (LHS) Capital Efficiency (RHS) ARC s Funding Model ARC s current funding model includes the reinvestment of proceeds from 216 and 218 non-core dispositions, allowing ARC to fund infrastructure and profitably grow the business Once the productive capacity at Dawson Phase IV is brought on-line, ARC will be able to fund its dividends and sustain and grow its business entirely out of funds from operations Total Forecasted Inflows & Outflows (3)(4) 217 to 22 Future Inflows & Outflows (3)(4) ARC can sustain the business at US$5/bbl WTI & <US$2.5/MMBtu NYMEX Henry Hub Net A&D Proceeds from 216 to 218 Unallocated Funds from Operations Allocated Funds from Operations Dawson Phase III Sunrise Phase II Dawson Phase I & II Upgrade Dawson Phase IV Ante Creek Expansion Funds from Operations ~$4MM/year Attachie West Phase I Thereafter, Consider: Development Projects Share Buybacks Increasing the Dividend ARC can fund the dividend as well as sustaining and growth capital at US$55/bbl WTI & US$3./MMBtu NYMEX Henry Hub ~$21MM/year Capital Efficiencies $1,/boe/day Capital Efficiencies $15,/boe/day ~$21MM/year Sources of Cash Dividend Sustaining Capital Discretionary Outflows Sources of Cash Dividend Sustaining Capital Discretionary Outflows (1) Payout ratio is calculated as dividends before DRIP and SDP as a percentage of funds from operations. (2) Non-GAAP measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. Refer to Non-GAAP Measures in the Advisory Statements to this presentation. (3) Sustaining capital refers to capital expenditures to maintain production from existing facilities at current production levels. Sustaining capital does not have any standardized meaning and therefore should not be used to make comparisons to similar measures presented by other issuers. (4) Growth capital refers to capital expenditures that result in increased production levels at existing facilities or increased production from new facilities and infrastructure required to support higher production levels. Growth capital does not have any standardized meaning and therefore should not be used to make comparisons to similar measures presented by other issuers. 3/1/219 5

8 219 Budget of $775 Million Delivers Annual Production of 135, to 142, boe per day and Advances Multi-year Infrastructure Development Projects BC Attachie Attachie $184MM 6 wells 3, boe/day Attachie West Phase I sanctioned and expected to be brought on-stream in 221 AB Red Creek Sunrise Tower $24MM 34, boe/day Initial 6 MMcf/day at Phase II facility in service; production will ramp up once final transportation arrangements come into effect in 219 Pouce Coupe Septimus Parkland Sunset Sunrise Dawson Sundown Ante Creek Parkland/Tower $128MM 13 wells 32, boe/day Sustain production at current facility capacity and develop lower Montney via interconnect to Dawson Dawson $299MM 39 wells 42, boe/day Phase IV facility sanctioned to come on stream in Q2 22; development is focused on liquids-rich lower Montney $4MM Sustaining Capital (1) $375MM Growth Capital (1) Ante Creek $95MM 12 wells 16, boe/day Expansion at Ante Creek 1-36 facility to add 15 MMcf/day of gas and 2,5 bbl/day of oil in Q2 22 Pembina Pembina $31MM 7 wells 1, boe/day Manage production declines and maximize cash flow generation from light oil production (1) Sustaining and growth capital do not have any standardized meaning and therefore should not be used to make comparisons to similar measures presented by other entities. Refer to Other Definitions in the Advisory Statements to this presentation. Note: Well counts denote wells drilled in calendar year; number of wells with completion activities in calendar year may vary. Three-year Infrastructure Investment Plan Advancing Multiple Projects to Add Significant Processing Capacity; Production to Grow into Infrastructure Capacity over Time Processing Capacity Projects Oil and Condensate (bbl/day) NGLs (bbl/day) 217 Natural Gas (MMcf/day) Total (boe/day) 18 3, Parkland-Dawson Interconnect Sunrise Phase II 1 Dawson Phase I & II Upgrade 2, 1, Dawson Phase IV 7,5 3, Ante Creek Expansion 2,5 Attachie West Phase I 1, 4, Sanctioned Q , 9 25,5 15 5, 6 24, Sanctioned 3/1/219 Development Processing Capacity Available 6

9 Physical Marketing Activities Crude Oil & Liquids ARC s Crude Oil & Liquids Sales Mix Crude Oil & Condensate Benchmark Pricing Mixed Sweet Blend WTI Condensate Western Canadian Select 43% 2% 37% Oil Condensate NGLs 8% of ARC s liquids production is made up of oil and condensate US$/barrel Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 64% of ARC s 218 overall sales revenue derived from crude oil and liquids production Natural Gas Integrated physical marketing and financial risk management strategies enable ARC to effectively execute on its long-term plans Market Access Firm transportation pipeline agreements to support existing production and future development beyond 221 Market Diversification Portfolio approach to physical diversification into consuming regions reduces single price hub risk Station 2 $.97 $.14 $.83 Westcoast /NWP Natural Gas Flows & Sales Points (218 Pricing in US$/MMBtu) AECO $1.19 $.15 Initial Tie-in of ARC s Production: 8% through the TransCanada NGTL system 2% through the Enbridge Westcoast system ARC s Corporate Natural Gas Price $3.47 $3.34 $3.18 $3.18 $.62 $.78 $.91 $.81 $1.15 $.39 $.69 $.72 $2.17 $1.58 $1.7 $ Cdn$/Mcf Malin $2.69 $.15 $.52 $2.2 GTN Pricing Hub Hub Market Price (1) Field-to-Hub Transportation Cost (2) Hub-to-Hub Transportation Cost (3) Market Netback $1.4 Northern Border Alliance GLGT Via Northern Border Ventura Chicago $3.1 $3.6 $.15 $.15 $.51 $.64 $2.44 $2.27 Henry Hub TCPL Mainline < 1% of expected overall sales revenue exposed to AECO and Station 2 in 219 (1) 218 monthly index pricing, or daily index in the absence of a monthly index. (2) Uses a three-year average published toll including abandonment costs. (3) As per published pipeline data. Dawn $3.12 $.15 $.79 $2.18 Q4 217 Q Realized Gains on Risk Management Contracts Diversification Activities Average Price before Diversification Activities ARC Natural Gas Diversification (4)(5) 4% 4% 6% 4% 7% 7% 12% 13% 22% 26% 17% 23% 29% 14% 6% % Bal 219 Cal 22 Cal 221 Hedged AECO Floating Station 2 Floating Midwest US Floating Dawn Floating Henry Hub Floating Pac-NW US Floating (4) Based on production assumptions for sanctioned projects. (5) Hedged includes all physical and financial fixed price swaps and collars at AECO, Station 2, and Henry Hub. 3/1/ % 18% 12% 15% 8% 45%. 1% 75% 5% 25% % of Total Production

10 Optionality in the Montney BC AB Significant Resource Potential Total petroleum initially-in-place (1) identified across ARC s Montney assets includes: 14.3 billion barrels of tight oil 11.8 Tcf of shale gas 1,m Lower Montney 1 kpa/m Line Oil and Liquids Red Creek 2,m Attachie Tower Pouce Coupe Septimus Parkland Sunset Dawson Sunrise 3,m 1,m Sundown Geographic Optionality Proximity of ARC Montney land base enables: Capital and operating efficiencies Application of learnings across areas ARC holds ~1,12 net Montney sections (~73, acres) Majority of lands 1% owned-and-operated, located across two jurisdictions (Alberta and BC) Ante Creek Dry Gas 2,m Egress Optionality Dual-connected ARC facilities allow for takeaway optionality in well-served area with three major pipelines providing access to North American markets Condensate-rich Gas Commodity Optionality ARC can target crude oil, liquids-rich natural gas or natural gas, depending on commodity price levels ARC designs its infrastructure to allow for optionality Montney Erosional Edge Multi-layer Optionality (1) Strategic capital invested in the lower Montney has increased overall depth of portfolio Year-end 218 results comply with current Canadian Oil and Gas Evaluation Handbook guidelines. Resources Evaluation volumes provided are the risked Best Estimate case. Year-end 218 total petroleum initially-in-place estimates utilize a one per cent porosity cut-off based on Best Estimate case. 3/1/219 8

11 Multiple Layers to Develop Significant Future Delineation Opportunities with the Efficient Development of Sustainable Resource Base Attachie Septimus Sunrise Tower Parkland Dawson Pouce Coupe Upper Montney Montney A Montney B Montney C Lower Montney Montney D Montney E Existing Horizontal Wells, Development Existing Horizontal Wells, Pilots Potential Horizontal Wells Proven Development Model Inventory at All Stages Allows for Self-funding and Strong Full-cycle Returns across Portfolio Growth for Future Phase Exploration Appraisal / Piloting Development Phase Develop to Commercialize Invest in Infrastructure Geographic and Commodity Diversity Net Positive Cash Flow Phase Optimization Maintenance Development to Sustain Cash Flow Pembina Dawson Phase I & II Ante Creek Sunrise Phase I Parkland/Tower Phase I & II Dawson Phase III Net Cash Flow + Dawson Phase IV Ante Creek (South Expansion) Attachie West Phase I Dawson Phase V Attachie West Phase II Septimus Parkland/Tower Phase III Pouce Coupe Attachie East Attachie West (Pilot) Sunrise Phase II Sundown 219 Budget $775 million Growth & Development Capital (1) $375 million Sustaining Capital (1) $4 million (1) Sustaining and growth capital do not have any standardized meaning and therefore should not be used to make comparisons to similar measures presented by other entities. Refer to Other Definitions in the Advisory Statements to this presentation. 3/1/219 9

12 Montney Reserves and Risked Resources (1) Extensive Development Potential from Montney Assets with TPIIP of 14.3 Billion Barrels of Oil and 11.8 Tcf of Shale Gas Shale Gas Tight Oil, Condensate & NGLs 1.3 Tcf CUMULATIVE PRODUCTION Oil 38 MMbbl Condensate & NGLs 39 MMbbl 4. Tcf TOTAL PROVED + PROBABLE RESERVES Oil 48 MMbbl Condensate & NGLs 14 MMbbl ECONOMIC CONTINGENT RESOURCE 8.1 Tcf 5.3 Tcf DEVELOPMENT PENDING RISKED Oil 47 MMbbl Condensate & NGLs 255 MMbbl ECONOMIC CONTINGENT RESOURCE Oil 64 MMbbl Condensate & NGLs 412 MMbbl 2.8 Tcf DEVELOPMENT UNCLARIFIED RISKED Oil 17 MMbbl Condensate & NGLs 157 MMbbl (1) Independent Resources Evaluation conducted by GLJ effective December 31, 218. Contingent Resource quoted is Best Estimate case. For reserves and resources disclosure, please refer to ARC s February 7, 219 news release entitled, ARC Resources Ltd. Announces 118 MMboe of Total Proved Plus Probable Reserve Additions in 218, Replacing 245 Per Cent of Production, and Delivers Record Proved Producing Reserve Additions of 82 MMboe Large Inventory of Development Opportunities (1) GLJ Has Recognized over 3,5 Future Drilling Locations across ARC s Montney Assets 1, 75 Number of Locations 5 25 Dawson Parkland / Tower Sunrise / Sunset Attachie Ante Creek Other Montney Pembina Total HZ Wells Drilled to YE 218 2P Booked Undeveloped Locations Development Pending ECR Booked Locations Development Unclarified ECR Booked Locations Pembina area has ~6 future drilling opportunities in the Cardium based on ARC s internal evaluation (1) Subject to change based on technology and economic environment. 3/1/219 1

13 Montney Development Economics Strong Rates of Return across the Montney Portfolio Half-cycle Economics (1)(2)(3) US$6/bbl WTI Cdn$2./GJ AECO Attachie West Upper Montney Parkland- Dawson Lower Montney Dawson Upper Montney Ante Creek Upper Montney Tower Upper Montney Sunrise Upper Montney IRR 5% 8% to 11% (dependent on liquids ratio) 8% to 9% (dependent on liquids ratio) 13% 85% to 11% (dependent on area) 7% Recycle Ratio 4.x 4.2 to 4.3x 3.3 to 4.9x 5.6x 3.2 to 3.4x 5.3x Breakeven ~US$3/bbl Cdn$.1/Mcf to Cdn$.3/Mcf Cdn$.1/Mcf to Cdn$1.15/Mcf ~US$14/bbl ~US$14/bbl ~Cdn$1./Mcf Production Split 6 Mcf : 1 barrel (4) 2 Mcf : 1 barrel (5) Liquids / Natural Gas 59% / 41% 83% / 17% Liquids / Natural Gas 19-35% / 65-81% 44-64% / 36-56% (dependent on liquids ratio) Liquids / Natural Gas 1% / 9% 26% / 74% Liquids / Natural Gas 43% / 57% 72% / 28% Liquids / Natural Gas 45% / 55% 73% / 27% Liquids / Natural Gas 1% / 99% 2% / 98% (1) IRR (half-cycle after-tax rate of return) run at US$6/bbl WTI and Cdn$2./GJ AECO flat pricing. (2) Breakeven prices are US$ per barrel WTI or Cdn$ per Mcf AECO as indicated. Breakeven analysis is run on a single commodity and is defined as the price at which NPV1 is equal to zero. (3) Recycle ratio is calculated using first 12 months of undiscounted netback divided by F&D. (4) Utilizes the standard 6 Mcf:1 barrel ratio when converting natural gas to boe. (5) Utilizes a 2 Mcf:1 barrel ratio when converting natural gas to boe. Greater Dawson Area Lower Montney Production Strong Liquids Results to Produce into Integrated Infrastructure of Greater Dawson Area Lower Montney CGRs Range from 25 to 2 bbl/mmcf Dawson month cum: 116 Mbbl condensate.6 Bcf gas ~2 bbl/mmcf Parkland F month cum: 124 Mbbl condensate 1.3 Bcf gas ~95 bbl/mmcf Parkland month cum: 44 Mbbl condensate 1.1 Bcf gas ~4 bbl/mmcf Dawson C month cum: 89 Mbbl condensate.5 Bcf gas ~165 bbl/mmcf Dawson K month cum: 63 Mbbl condensate.5 Bcf gas ~135 bbl/mmcf Dawson F month cum: 56 Mbbl condensate 2.3 Bcf gas ~25 bbl/mmcf 217 & 218 Lower Montney Wells 218 Lower Montney Wells with < 6 Months Production Dawson D month cum: 63 Mbbl condensate 2.5 Bcf gas ~25 bbl/mmcf Note: All noted volumes are raw wellhead gas and condensate volumes. 3/1/219 11

14 Cost Management Low-cost Producers Deliver Superior Returns over Time Focused assets, characterized by high working interest, and ARC owned-and-operated facilities, provides ARC with control over costs and operations 2 Three-year FD&A Costs ( ) (1)(2)(3) ($/boe) 15 H1 218 Operating Costs (4)(5) ($/boe) $/boe 12 8 Group Average $/boe 9 6 Group Average 4 ARC Sunrise Gas ARC ARC NE BC Oil & Gas ARC Dawson Gas 3 ARC Sunrise Gas ARC Dawson Gas ARC NE BC Oil & Gas ARC (1) Three-year 2P FD&A Costs ( ) includes future development capital. Source: Peters & Co. 217 Reserves Comparison E&P Producers April 4, 218. (2) Refer to ARC s February 8, 218 news release entitled, ARC Resources Ltd. Announces Record 32 Per Cent Replacement of Produced Reserves through Development Activities and ARC s February 7, 219 news release entitled, ARC Resources Ltd. Announces 118 MMboe of Total Proved Plus Probable Reserve Additions in 218, Replacing 245 Per Cent of Production, and Delivers Record Proved Producing Reserve Additions of 82 MMboe for information pertaining to ARC s finding and development costs. (3) Three-year 2P FD&A Costs ( ) peer group includes: BNP, BTE, CPG, PEY, POU, TOU, VET, VII, WCP. (4) H1 218 Operating Expenses from company reports and represent data for the six months ended June 3, 218. (5) H1 218 Operating Expenses peer group includes: BNP, BTE, CPG, ERF, PEY, POU, TOU, VET, VII, WCP. Montney Exploitation Approach Improves Efficiencies ARC Has Advanced Its Understanding of the Full-stack Development Potential for All Project Areas in Order to Execute Efficiently Montney Full-stack Development (1) Efficiencies of full-stack development include: Surface locations and infrastructure already in place Reduced surface footprint Improved logistics Liquids-to-gas ratio can vary by layer Flexibility built into facility design to handle higher liquids content of Lower Montney (1) Represents Sunrise full-stack model. Spacing and completions approach varies by project area. 3/1/219 12

15 Strong Safety Performance Health and Safety Performance Supports Capital Efficiency Improvements; Over Five Years LTI-free for Employees ARC s strong safety performance and capital efficiencies are the result of well-planned and executed operations Improvements in safety performance are the result of ARC employees being focused on safety and alignment with strong service providers ARC Contractor Total Recordable Incident Frequency % Reduction in TRIF Strong Safety Performance = Strong Business Performance TRIF (Total Recordable Incident Frequency) = # of Recordable Injuries x 2, # Hours Worked Recordable Injury (Lost Time, Restricted Work Case or Medical Aid) Environmental, Social & Governance Performance Responsible Development Has Shaped the Company We Are Today and Underpins Sustainable Future Growth GHG emission intensity reduced by 43 per cent since 27 Targeting to further reduce GHG emission intensity by 25 per cent by 221 Strong safety culture demonstrates ARC s commitment to creating an injury-free workplace for employees and contractors Superior financial returns achieved through: Risk management Good governance practices Maintenance of high ethical standards Royalty and tax payments Local hiring practices Community investment For more information and to view our 218 Sustainability Report, visit 3/1/219 13

16 Why Invest in ARC? A Differentiated Investment with Tremendous Opportunity Competitive Cost Structure Profitable Investment Deep Project Inventory Long-term Value Creation Top-tier Assets Owned Infrastructure Industry-leading Operational Efficiencies Market Access Concentrated Asset Base Strong Expertise Balance Sheet Strength Full-cycle Returning Projects Disciplined Execution Managed Pace and Decline Technology Deployment Growth for Future Stage Development Stage Positive Cash Flow Stage Per Share Growth Sustainable Dividend Montney and Cardium Project Potential (boe/day) Future Development Projects Dawson V Pouce Coupe Septimus I & II Parkland/Tower III Attachie West II Sundown Attachie Central I & II Sunrise III Attachie East I & II Next Three Years Sanctioned: Dawson I & II Upgrade Dawson IV Ante Creek Expansion Attachie West I Base Production Montney Cardium 218 ARC s Attachie West Phase I Business Profitably Investing in First Major Phase of Development While Planning for Subsequent Phases,,,,,, Natural Gas Processing Capacity: 6 MMcf/day Condensate-handling Capacity: 1, bbl/day NGLs-handling Capacity: 4, bbl/day 35, 3, 25, 2, 15, 1, 5, $ 219F 22F 221F 222F 223F 224F 225F 226F 227F 228F 229F 23F 231F -5,,,),,) Field Netback (1) Capital Expenditures Facility Expenditures Net Cash Flow Production -1, -15, -2, -25, -3,,,) Facility and Infrastructure Pre-drill 22 Wells Drill 15 Wells per Year 45% of Field Netback Required to Sustain Business (1) -35, (1) Economics run at US$6/bbl WTI and Cdn$2./GJ AECO flat pricing. 3/1/219 14

17 Attachie Attachie West Phase I Sanctioned Attachie West is a leading development opportunity within ARC s portfolio due to its: Condensate-rich production profile Significantly over-pressured reservoir Extensive, contiguous land position suited for multi-layer development pad Attachie West Update Attachie West Phase I sanctioned and regulatory application for multiple phases submitted in Q MMcf/day of gas processing 1, bbl/day of condensate-handling 4, bbl/day of NGLs-handling Liquids processing capacity of 3,5 bbl/day of condensate at Attachie West battery pad Commercial demonstration pad wells have cumulatively produced ~49, bbl of condensate and ~2.3 Bcf of raw natural gas over 275 days of production ARC has secured takeaway on TCPL s North Montney Mainline, expected to be on-stream in late 219 ARC Wells ARC Attachie West Production Pilots ARC Attachie West 217 Multi-well Pad ARC Attachie East Delineation Wells Multi-layer Development Potential Journey to Commercial Development Single-well Appraisals Commercial Demonstration Pad Commercial Development Upper Montney 214 to 217 Applying Learnings 217 to 218 Infrastructure Development 221 Lower Montney Existing Horizontal Wells, Development Existing Horizontal Wells, Pilots Potential Horizontal Wells Asset Details Net Production (boe/day) Q ,12 Liquids (bbl/day) 2,21 Gas (MMcf/day) 11 Land (Montney Net Sections) 36 Working Interest ~99% 2P Reserves (MMboe) 31 Liquids (MMbbl) 14.8 Gas (Bcf) 97 Reserve Life Index (Years) (1) 27 PDP Reserves (MMboe) 5 Liquids (MMbbl) 2.5 Gas (Bcf) 15 Reserve Life Index (Years) (1) 4 (1) Reserve Life Index based on 219 guided production. 3/1/219 15

18 Dawson Asset Details Focus on Liquids with Infrastructure Enhancements at Dawson Phase I & II and Dawson Phase IV Net Production (boe/day) Q4 218 ARC 13-7 Phase III Gas Plant ARC 13-7 (9 MMcf/day & Phase IV Gas Plant 7.5 Mbbl/day) (9 MMcf/day & 1.5 Mbbl/day) ARC 1-34 Compressor Station (45 MMcf/day) ARC 5-35 Phase I & II Gas Plants (12 MMcf/day) Upgrade (3 Mbbl/day) TCPL 47,39 Liquids (bbl/day) 4,66 Gas (MMcf/day) 256 Production Split % (Liquids / Gas) ~9% Gas Land (Montney Net Sections) 137 Working Interest ~1% 2P Reserves (MMboe) 275 Liquids (MMbbl) 42. Gas (Bcf) 1,397 Reserve Life Index (Years) (1) 18 PDP Reserves (MMboe) 72 Liquids (MMbbl) 9.3 Gas (Bcf) 378 Reserve Life Index (Years) (1) ARC Gas Plants & Compressor Stations ARC Wells Competitor Wells (1) Year # Hz Wells Drilled Budget Reserve Life Index based on 219 guided production. Dawson Development Potential Liquids-rich Development Layer Below Core Acreage Drilling Inventory Upper Montney 1, 8 Lower Montney Wells Upper Montney A Booked Reserves Lower Montney Booked Reserves Wells Drilled to YE Drilling 218 Opportunities at YE 218 Development Unclarified ECR Locations Development Pending ECR Locations 2P Booked Locations Existing Horizontal Wells, Development Potential Horizontal Wells 3/1/219 Wells Drilled ARC Montney Lands ARC Montney Lands with 2P Reserves Booked as of YE

19 Parkland/Tower Asset Details Profitable with Commodity Optionality: Oil, Condensate and Natural Gas Tower Parkland (1) Tower Net Production (boe/day) Q ,88 2,35 Liquids (bbl/day) 2,76 8,85 Gas (MMcf/day) Land (Montney Net Sections) Working Interest ~9% ~94% Parkland/Tower 2P Reserves (MMboe) ARC 8-13 Compressor (2 MMcf/day) (1) (2) 49.8 Gas (Bcf) 612 Reserve Life Index (Years) (2) 13 Parkland/Tower PDP Reserves (MMboe) ARC 3-9 Gas Plants (9 MMcf/day & 1 Mbbl/day) Parkland ARC Gas Plants ARC Wells Competitor Wells Parkland Tower Boundary 152 Liquids (MMbbl) 14.1 Gas (Bcf) Reserve Life Index (Years) (2) Year Production includes 4,44 boe/day that was directed to Dawson Phase III for processing and sales via the Parkland-Dawson interconnect pipeline. Reserve Life Index based on 219 guided production. 44 Liquids (MMbbl) Budget Parkland # Hz Wells Drilled Tower # Hz Wells Drilled Parkland/Tower Development Potential Incremental Reserves Potential With Multi-layer Development Tower Drilling Inventory Parkland Upper Montney A Booked Reserves Upper Montney 1, Wells 8 Upper Montney A+ Booked Reserves 6 4 Lower Montney 2 Lower Montney Booked Reservess Wells Drilled to YE Drilling 218 Opportunities at YE 218 Development Unclarified ECR Locations Development Pending ECR Locations 2P Booked Locations Existing Horizontal Wells, Development Existing Horizontal Wells, Pilots Potential Horizontal Wells 3/1/219 Wells Drilled ARC Montney Lands ARC Montney Lands with 2P Reserves Booked as of YE

20 Sunrise/Sunset Asset Details Sunrise Phase II: First 6 MMcf per Day of Processing Capacity in Service, Balance Expected to Be in Service in H1 219 Net Production (boe/day) Q ,57 Liquids (bbl/day) 17 Gas (MMcf/day) 152 Land (Montney Net Sections) 32 Working Interest Sunset ~89% 2P Reserves (MMboe) 239 Liquids (MMbbl) ARC Sunrise Gas Plant (6 MMcf/day) & Phase II Gas Plant (1) (18 MMcf/day) 2.7 Gas (Bcf) 1, Reserve Life Index (Years) (2) PDP Reserves (MMboe) 59 Liquids (MMbbl).3 Gas (Bcf) Reserve Life Index (Years) ARC Gas Plants ARC Wells Competitor Wells (1) (2) 355 Year The first 6 MMcf/day of gas processing capacity was in service in the fourth quarter of 218 with the 12 MMcf/day balance expected to be in service in the first half of 219 once final transportation arrangements have come into effect. The 12 MMcf/day includes 6 MMcf/day of existing production that is currently flowing through a third-party facility which is expected to be redirected to Sunrise Phase II in June 219. Reserve Life Index based on 219 guided production. # Hz Wells Drilled 5 (2) Budget 5 23 Sunrise Development Potential Suited for Multi-layer Development Drilling Inventory 5 4 Wells Upper Montney Upper Montney A Booked Reserves Upper Montney A+ Booked Reserves Lower Montney Upper Montney B Booked Reserves Lower Montney Booked Reserves Wells Drilled to YE Drilling 218 Opportunities at YE 218 Development Unclarified ECR Locations Development Pending ECR Locations 2P Booked Locations Existing Horizontal Wells, Development Existing Horizontal Wells, Pilots 3/1/219 Wells Drilled ARC Montney Lands ARC Montney Lands with 2P Reserves Booked as of YE

21 Ante Creek Asset Details Strong Cash Flow Generating Asset with Facility Expansion Project Planned for Q2 22 Net Production (boe/day) Q ,24 Liquids (bbl/day) 7,83 Gas (MMcf/day) 5 Production Split % (Liquids / Gas) ARC 2-26 Gas Plant (2 MMcf/day) ARC 1-7 Gas Plant (3 MMcf/day & 12.5 Mbbl/day) 48% / 52% Land (Montney Net Sections) 327 Working Interest ~1% 2P Reserves (MMboe) 72 Liquids (MMbbl) 36.6 Gas (Bcf) 215 Reserve Life Index (Years) (1) 12 PDP Reserves (MMboe) ARC 1-36 Gas Plant (1 MMcf/day) Expansion (15 MMcf/day & 2.5 Mbbl/day) Liquids (MMbbl) 1.2 Gas (Bcf) 6 Reserve Life Index (Years) Year ARC Gas Plants ARC Wells (1) 2 # Hz Wells Drilled 3 (1) Budget Reserve Life Index based on 219 guided production. Ante Creek Development Potential Large Land Base Presents Significant Drilling Inventory Drilling Inventory 8 Wells Wells Drilled to YE Drilling 218 Opportunities at YE 218 Development Unclarified ECR Locations Development Pending ECR Locations 2P Booked Locations Wells Drilled ARC Montney Lands ARC Montney Lands with 2P Reserves Booked as of YE 218 3/1/219 19

22 Pembina Asset Details High Working Interest Light Oil Production, Competitive Operating Netbacks and Strong Cash Flow Generation Net Production (boe/day) Q ,66 Liquids (bbl/day) 8,83 Gas (MMcf/day) 11 Land (Cardium Net Sections) 218 Working Interest ~88% 2P Cardium Reserves (MMboe) Berrymoor Lindale NPCU Buck Creek 63 Liquids (MMbbl) 52.1 Gas (Bcf) Reserve Life Index 63 (Years) (1) 17 PDP Cardium Reserves (MMboe) Liquids (MMbbl) MIPA PCU Gas (Bcf) Reserve Life Index SPCU Year ARC Working Interest Lands (1) 39 # Hz Wells Drilled 34 (Years) (1) Budget Reserve Life Index based on 219 guided production. ARC s HISTORY 3/1/219 2

23 ARC s History and Future Strong Foundation for Continued Success In the past 22 years, ARC has successfully achieved the following: > 1% Return on Average Capital Employed (1) $6.4 Billion of Distributions / Dividends & 1% Annualized Total Return (2) Stayed within Target of 1. to 1.5x Net Debt to Funds from Operations Transitioned Asset Base to World-class Montney Looking ahead, ARC will: Preserve Strong Balance Sheet and Maintain Financial Flexibility Fund New Projects Includes Redeployment of Proceeds from Previously Completed Non-core Divestments Manage Risk Through Physical and Financial Diversification Activities Provide Total Shareholder Return to Investors with Per Share Growth and Dividend (1) Non-GAAP measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. Refer to Non-GAAP Measures in the Advisory Statements of this presentation. (2) Annualized total return to February 28, 219, including January dividend, and assuming reinvestment of dividends in ARC shares. Consistent and Sustainable Strategy Delivering on Our Strategy of Risk-managed Value Creation 1, 75 Net Debt to Funds from Operations Net Debt (LHS) Funds From Operations (LHS) Net Debt to Funds from Operations (RHS) Operating Costs $ millions Montney Growth Assets Ratio Financial Flexibility and Market Access RISK- MANAGED VALUE CREATION HSE and Operational Excellence $/boe Employee Engagement 218 Oil and Liquids High-quality, Long-life Assets Top Talent and Strong Leadership Culture 1% 75% 5% ARC Industry Average (Baed on Gallup's Research) Dry Gas 25% ARC holds ~1,12 net Montney sections (~73, net acres) Condensate-rich Gas % /1/219 21

24 Transformation of Our Business Montney Transformation Has Allowed ARC to Manage a Profitable Business through Commodity Price Cycles 16, Production Profile 1,4 Net Debt to Funds from Operations 3. boe/day 12, 8, 4, Non-Montney Crude Oil & Liquids (bbl/day) Montney Crude Oil & Liquids (bbl/day) Non-Montney Natural Gas (boe/day) Montney Natural Gas (boe/day) Forecast 1,2 1, $ millions Ratio. Q Q Q Q Q3 2 Q2 21 Q1 22 Q4 22 Q3 23 Q2 24 Q1 25 Q4 25 Q3 26 Q2 27 Q1 28 Q4 28 Q3 29 Q2 21 Q1 211 Q4 211 Q3 212 Q2 213 Q1 214 Q4 214 Q3 215 Q2 216 Q1 217 Q4 217 Q3 218 Q Net Debt (LHS) Funds From Operations (LHS) Net Debt to Funds from Operations (RHS) 25% 2% 15% 1% 5% % (5%) Return on Average Capital Employed (1) >1% ROACE since Inception Cumulative Dividends ($ billions) Cumulative Dividends and Historic Payout Ratio (2) 218 Payout Ratio of 26% 12% 1% 8% 6% 4% 2% Payout Ratio (1%) ROACE Three-year Trailing ROACE (1) Non-GAAP measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. Refer to Non-GAAP Measures in the Advisory Statements to this presentation Cumulative Dividend (LHS) Payout Ratio (before DRIP and SDP) (RHS) calculated as dividends before DRIP and percentage of funds from operations. (2) Payout ratio is SDP as a % Record Produced Reserves Replacement in Per Cent Reserves Replacement or Greater for 11 th Consecutive Year Strong 218 development 2P reserve adds, with 245 per cent of produced reserves replaced Montney assets have been the centrepiece to ARC s strategy of organic reserves and resource growth Finding and development costs of $5.76/boe for proved plus probable reserves and $6.2/boe for total proved reserves (1) 16 Growth through Acquisition Annual Produced Reserves Replacement (2) Organic Growth 12 MMboe 8 4 (4) Reserves Replacement - Development Reserves Replacement - Net Acquisitions & Dispositions Reserves Replacement - Total Production (1) Excludes future development capital. (2) 1997 to 22 reserves data is based on company interest established reserves (proved plus 5 per cent of probable reserves). 23 to 218 reserves data is based on gross interest proved plus probable reserves. 3/1/219 22

25 Key Reserve Information Year-end 218 Reserves Added 118 MMboe of 2P Reserves through Development Activities Proved Producing 244 MMboe Total Proved 551 MMboe Proved plus Probable 879 MMboe Crude and Tight Oil 98 MMbbl NGLs 17 MMbbl Natural Gas 4. Tcf 2P Reserve Life Index (1) 17.4 years 2P Reserves (MMboe) 1, Natural Gas Liquids 1% CAGR YE 218 2P Reserves Probable 37% Natural Gas 77% PUD 34% PDP 28% Oil 11% PNP 1% Condensate & Pentanes Plus 7% NGLs 5% (1) Based on 219 production guidance midpoint of 138,5 boe per day. Risk Management Program Program Executed with a Long-term View The fair value of ARC s risk management contracts at December 31, 218 was a net asset of $266.2 million Crude Oil Natural Gas Foreign Exchange & Power Total Realized Gains (Losses) on Risk Management Contracts (1)(2)(3) $ millions 1 5 (5) (1) F 22F 221F 222F 223F WTI US$/bbl AECO Cdn$/GJ $62 $8 $95 $94 $98 $93 $49 $43 $51 $65 $47 $49 $5 $51 $52 $3.91 $3.79 $3.44 $2.27 $3. $4.19 $2.63 $1.98 $2.3 $1.46 $1.23 $1.27 $1.46 $1.63 $2.3 (1) 219 to 223 Forecast values based on the forward price curve as at December 31, 218 and net of credit adjustment. (2) Realized pricing is based on annual average settlements and forecasted pricing is the annual average prices based on the forward price curve as at December 31, 218. (3) See ARC s financial statements and notes and MD&A for additional details on risk management program results as well as current risk management contract positions. 3/1/219 23

26 Risk Management Contract Positions at February 7, Crude Oil WTI (2) US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day Ceiling , , Floor , , Sold Floor , 4. 2, Swap , Crude Oil Cdn$ WTI (3) Cdn$/bbl bbl/day Cdn$/bbl bbl/day Cdn$/bbl bbl/day Cdn$/bbl bbl/day Cdn$/bbl bbl/day Cdn$/bbl bbl/day Ceiling 88. 1, , Floor 8. 1, , Sold Floor 65. 1, , Swap , Total Crude Oil Volumes (bbl/day) 15, 5, Crude Oil - MSW (Differential to WTI) (4) US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day US$/bbl bbl/day Swap (9.28) 3, Natural Gas - NYMEX Henry Hub (5) US$/MMBtu MMBtu/day US$/MMBtu MMBtu/day US$/MMBtu MMBtu/day US$/MMBtu MMBtu/day US$/MMBtu MMBtu/day US$/MMBtu MMBtu/day Ceiling , , , , Floor , , , , Sold Floor , , , Swap 4. 4, Natural Gas AECO (6) Cdn$/GJ GJ/day Cdn$/GJ GJ/day Cdn$/GJ GJ/day Cdn$/GJ GJ/day Cdn$/GJ GJ/day Cdn$/GJ GJ/day Ceiling 3.3 1, 3.6 3, Floor 3. 1, 3.8 3, Swap , , Total Natural Gas Volumes (MMBtu/day) 183,53 16,869 5, 25, - - Natural Gas - AECO Basis (Percentage of NYMEX Henry Hub) AECO/NYMEX MMBtu/day AECO/NYMEX MMBtu/day AECO/NYMEX MMBtu/day AECO/NYMEX MMBtu/day AECO/NYMEX MMBtu/day AECO/NYMEX MMBtu/day Sold Swap , Natural Gas - AECO Basis (Differential to NYMEX Henry Hub) US$/MMBtu MMBtu/day US$/MMBtu MMBtu/day US$/MMBtu MMBtu/day US$/MMBtu MMBtu/day US$/MMBtu MMBtu/day US$/MMBtu MMBtu/day Sold Swap (.88) 12,959 (.82) 98,361 (.97) 34, Bought Swap (3.25) (2,466) Total AECO Basis Volumes (MMBtu/day) 158,493 98,361 34, Natural Gas Other Basis (Differential to NYMEX Henry Hub) (7) MMBtu/day MMBtu/day MMBtu/day MMBtu/day MMBtu/day MMBtu/day Sold Swap 6, 1, 12, 15, 72,479 2,486 Foreign Exchange Cdn$/US$ US$ Millions Cdn$/US$ US$ Millions Cdn$/US$ US$ Millions Cdn$/US$ US$ Millions Cdn$/US$ US$ Millions Cdn$/US$ US$ Millions Average Rate Forward (8) Sold USD Call (9) (1) The prices and volumes in this table represent averages for several contracts representing different periods. The average price for the portfolio of options listed above does not have the same payoff profile as the individual option contracts. Viewing the average price of a group of options is purely for indicative purposes. All positions are financially settled against the benchmark prices disclosed in the Financial Instruments and Market Risk Management note in ARC s financial statements as at and for the year ended December 31, 218. (2) Crude oil prices referenced to WTI. (3) Crude oil prices referenced to WTI, multiplied by the WM/Reuters Intra-day Cdn$/US$ Foreign Exchange Spot Rate as of Noon Eastern Standard Time. (4) MSW differential refers to the discount between WTI and the mixed sweet crude stream price at Edmonton, calculated on a monthly weighted average basis in US$. (5) Natural gas prices referenced to NYMEX Henry Hub Last Day Settlement. (6) Natural gas prices referenced to AECO 7A Monthly Index (7) ARC has entered into basis swaps at locations other than AECO. (8) Cdn$/US$ referenced to WM/Reuters Intra-day Cdn$/US$ Foreign Exchange Spot Rate as of Noon Eastern Standard Time. (9) Cdn$/US$ referenced to the 1:: AM Eastern Standard Time NY cut. Recognitions and Rankings MSCI Global Sustainability Index Jantzi Social Index FTSE Russell s FTSE4Good Index Series CDP Participant for nine consecutive years Joined the 3% Club in 218 Globe and Mail Board Games: Ranked 46 out of 236 companies with a score of 87/1 Brendan Wood International: Ranked #1 in peer group for Confidence in Corporate Strategy in Canadian Coalition for Good Governance: Best Disclosure of Corporate Governance and Executive Compensation Practices 217 & 218 IR Magazine Awards: Best IR in Energy Sector, Grand Prix for Mid-Cap, Best Financial Reporting, Best Use of Technology, Best Investor Relations Officer, Best IR by a CEO (218 only) 218 IR Magazine Global Awards: Best IR in Energy Sector 218 Brendan Wood International: Global TopGun IRO and TopGun Company for Transparency and Reporting as Reported by Investors 3/1/219 24

27 APPENDIX Reserves and Resources Disclosure All reserves and resources volumes for the Montney and elsewhere in this presentation are, unless indicated otherwise, as at December 31, 218 as evaluated by GLJ Petroleum Consultants Ltd. in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument Standards for Disclosure for Oil and Gas Activities. TPIIP, DPIIP and UPIIP have been estimated using a one per cent porosity cut-off for shale gas and tight oil. Reserves volumes for ARC s Montney assets and elsewhere in this presentation are, unless indicated otherwise, Proved plus Probable, while the resource categories for the Montney in this presentation are Best Estimates. All reserves and resources volumes for the Montney and elsewhere in this presentation are company gross. Gas volumes are sales for reserves and resource and raw gas for DPIIP and TPIIP. The tight oil DPIIP is a stock tank barrel. All DPIIP and TPIIP other than cumulative production, reserves, Contingent Resources and Prospective Resources have been categorized as unrecoverable. The amount of natural gas and liquids ultimately recovered from ARC s the Montney resource will be primarily a function of the future price of both commodities. This presentation contains metrics commonly used in the oil and natural gas industry, such as reserve replacement, reserve life index or RLI, recycle ratio, finding and development costs or F&D costs, finding, development and acquisition costs or FD&A costs, operating netback, finding and development recycle ratio or F&D recycle ratio, and finding, development and acquisition recycle ratio or FD&A recycle ratio. These terms do not have any standardized meaning and may not be comparable to similar measures presented by other entities, and therefore should not be used to make such comparisons. 3/1/219 25

28 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 use of established technology; and specified economic conditions, which are generally accepted as being reasonable. Reserves are classified according to the degree of certainty associated with the estimates as follows: Proved Reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. Probable Reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves. Resources encompasses all petroleum quantities that originally existed on or within the earth s crust in naturally occurring accumulations, including Discovered and Undiscovered (recoverable and unrecoverable) plus quantities already produced. "Total Resources" is equivalent to "Total Petroleum Initially-in-Place". Resources are classified in the following categories: Total Petroleum Initially-in-Place ("TPIIP") is that quantity of petroleum that is estimated to exist originally in naturally occurring accumulations. It includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered. Discovered Petroleum Initially-in-Place ("DPIIP") is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of DPIIP includes production, reserves, and contingent resources; the remainder is unrecoverable. Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development but which are not currently considered to be commercially recoverable due to one or more contingencies. Economic Contingent Resources ("ECR") are those Contingent Resources which are currently economically recoverable. Project Maturity Subclass Development Not Viable is defined as a Contingent Resource that is not viable in the conditions prevailing at the effective date of the evaluation, and where no further data acquisition or evaluation is planned and therefore has not been assigned a low chance of development. Project Maturity Subclass Development Pending is defined as a Contingent Resource that has been assigned a high chance of development and the resolution of final conditions for development are being actively pursued. Project Maturity Subclass Development Unclarified is defined as a Contingent Resource that requires further appraisal to clarify the potential for development and has been assigned a lower chance of development until contingencies can be clearly defined. Definitions of Oil and Gas Reserves and Resources Undiscovered Petroleum Initially-in-Place ("UPIIP") is that quantity of petroleum that is estimated, on a given date, to be contained in accumulations yet to be discovered. The recoverable portion of UPIIP is referred to as "prospective resources" and the remainder as "unrecoverable". Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Unrecoverable is that portion of DPIIP and UPIIP quantities which is estimated, as of a given date, not to be recoverable by future development projects. A portion of these quantities may become recoverable in the future as commercial circumstances change or technological developments occur; the remaining portion may never be recovered due to the physical/chemical constraints represented by subsurface interaction of fluids and reservoir rocks. Uncertainty Ranges are described by the COGE Handbook as low, best, and high estimates for reserves and resources. The Best Estimate is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 5 per cent probability that the quantities actually recovered will equal or exceed the best estimate. Forecast 3/1/219 26

29 This presentation contains forward-looking information and 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. Reference is made to the section titled Forwardlooking Statements at the beginning of the presentation and also to the February 7, 219 news release entitled, ARC Resources Ltd. Announces 118 MMboe of Total Proved Plus Probable Reserve Additions in 218, Replacing 245 Per Cent of Production, and Delivers Record Proved Producing Reserve Additions of 82 MMboe which may be found on ARC s website at or on SEDAR at and which are hereby incorporated by reference in this presentation and which outline a number of assumptions, risks and uncertainties associated with forward-looking statements. Actual results could differ materially as a result of changes to ARC s plans, the impact of changes in commodity prices, general economic, market and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. For further information about ARC Resources Ltd. please visit our website Or contact: Investor Relations ir@arcresources.com T F Toll Free ARC Resources Ltd. 12, 38 4 Avenue SW Calgary, AB T2P H7 3/1/219 27

30 Notes 3/1/219 28

31 FINANCIAL AND OPERATIONAL HIGHLIGHTS ($ millions, except per share amounts) FINANCIAL Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Sales of crude oil, natural gas, condensate, NGLs and other income Per share, basic Per share, diluted Net income (loss) (45.9) Per share, basic (.13) Per share, diluted (.13) Funds from operations (1) Per share, basic Per share, diluted Dividends declared Per share (2) Total assets 6,16.2 5, ,59.8 6, ,224. 6,115. 6, ,169.3 Total liabilities 2,34.4 2, , , , , , ,591.4 Net debt outstanding (1) Weighted average shares, basic Weighted average shares, diluted Shares outstanding, end of period CAPITAL EXPENDITURES Geological and geophysical Drilling and completions Plant and facilities Administrative assets Total capital expenditures Undeveloped land Total capital expenditures, including undeveloped land purchases Acquisitions Dispositions (.9) (96.2) (.7) (98.3) Total capital expenditures, land purchases and net acquisitions and dispositions OPERATING Production Crude oil (bbl/day) 2,92 23,867 24,893 25,37 24,641 25,2 23,813 24,3 Condensate (bbl/day) 8,458 8,158 6,96 5,55 6,989 6,815 4,253 4,54 Natural gas (MMcf/day) NGLs (bbl/day) 7,42 7,687 6,38 6,332 6,38 6,91 4,691 3,893 Total (boe/day) 136,52 135,41 127, ,16 133,49 129, ,41 115,129 Average realized prices, prior to risk management contracts Crude oil ($/bbl) Condensate ($/bbl) Natural gas ($/Mcf) NGLs ($/bbl) Oil equivalent ($/boe) TRADING STATISTICS (3) ($, based on intra-day trading) High Low Close Average daily volume (thousands) 2,117 1,246 1,15 1,46 1,114 1,8 1,269 1,14 (1) Refer to the "Capital Management" note in ARC s financial statements and to the sections entitled, "Funds from Operations" and Capitalization, Financial Resources and Liquidity contained within ARC s MD&A. (2) Dividends per share are based on the number of shares outstanding at each dividend record date. (3) Trading statistics denote trading activity on the Toronto Stock Exchange only.

32 CORPORATE AND SHAREHOLDER INFORMATION DIRECTORS Harold N. Kvisle Chairman Myron M. Stadnyk President and Chief Executive Officer David R. Collyer (1) (2) John P. Dielwart (2) (3) Fred J. Dyment (3) (4) James C. Houck (2) (3) Kathleen O Neill (4) (5) Herbert C. Pinder Jr. (1) (4) William G. Sembo (1) (5) Nancy L. Smith (3) (5) (1) Member of Human Resources and Compensation Committee (2) Member of Safety, Reserves and Operational Excellence Committee (3) Member of Risk Committee (4) Member of Policy and Board Governance Committee (5) Member of Audit Committee OFFICERS Myron M. Stadnyk President and Chief Executive Officer Terry M. Anderson Senior Vice President and Chief Operating Officer P. Van R. Dafoe Senior Vice President and Chief Financial Officer Bevin M. Wirzba Senior Vice President, Business Development and Capital Markets Chris D. Baldwin Vice President, Geosciences Ryan V. Berrett Vice President, Marketing Kris J. Bibby Vice President, Finance Sean R. A. Calder Vice President, Production Lara M. Conrad Vice President, Engineering and Planning Armin Jahangiri Vice President, Operations Lisa A. Olsen Vice President, Human Resources Grant A. Zawalsky Corporate Secretary EXECUTIVE OFFICE ARC Resources Ltd. 12, 38 4th Avenue SW Calgary, Alberta T2P H7 T TOLL FREE F W TRANSFER AGENT Computershare Trust Company of Canada 6, 53 8th Avenue SW Calgary, Alberta T2P 3S8 T AUDITORS PricewaterhouseCoopers LLP Calgary, Alberta ENGINEERING CONSULTANTS GLJ Petroleum Consultants Ltd. Calgary, Alberta LEGAL COUNSEL Burnet Duckworth & Palmer LLP Calgary, Alberta CORPORATE CALENDAR April 3, 219 Q1 219 Results May 1, 219 Annual General Meeting August 1, 219 Q2 219 Results November 7, 219 Q3 219 Results STOCK EXCHANGE LISTING The Toronto Stock Exchange Trading Symbol: ARX INVESTOR INFORMATION Visit our website at or contact: Investor Relations T or TOLL FREE E ir@arcresources.com ARC is listed on the Jantzi Social Index; a common stock index of 6 Canadian companies that pass a set of broadly based environmental, social and governance rating criteria.