Spot AECO $Cdn/GJ. 1 2 Daily Index Values; Rolling 12-Month History. Indexed to 12 Months Ago. $US/$Cdn $0.90 $0.85 $0.80 $0.75 $0.

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1 March, Chart Watch ARC Energy Charts Visit for more information on this publication and the Institute The DJIA rose above 1, for the first time US crude production fell by 91 MB/d in Dec We have added a new chart US LNG exports pulled back last week US gas storage had a surprise 7 Bcf gain Spot WTI Crude $US/B á Edmonton Light $US/B Spot Henry Hub Spot AECO $Cdn/GJ Spot AECO Basis Currency $US/$Cdn á.39 á..777 á á á Indexed to 1 Months Ago Broad Equity Markets Year-to-Date 1 Daily Index Values; Rolling 1-Month History Shanghai Composite S&P/TSX Composite Dow Jones Markets generally reacted positively to Donald Trump s... The DJIA rose above 1, for the first time ever....address to congress. 9 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-17 Mar-17 Indexed to 1 Months Ago Performance of Oil and Equities Year-to-Date Daily Index Values; Rolling 1-Month History 9 ARC Junior E&P Index S&P 5 E&P S&P/TSX E& P Index US and Canadian large cap E&P equities have fallen 1% and % respectively since their Dec peak, despite flat oil price. Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-17 Mar-17 Broad market indices are one the many vital signs measuring the health of the economy. Energy demand is a function of economic health., ARC Financial Corp. Performance of Canadian and US oil & gas equities are compared against each other., ARC Financial Corp. Oil & Service Equities Year-to-Date 3 Daily Index Values; Rolling 1-Month History Canadian Currency Exchange Daily Close Values; Rolling -Month History Indexed to 1 Months Ago Philadelphia Service I ndex PSAC Cana dian In dex According to Canyon Services Group, demand far outweighs for services... its ability to supply crews. $US/$Cdn $.9 $.5 $. $.75 $.7 The Canadian Dollar fell by 1. cents last week. The BOC identified significant uncertainties......that the Canadian economy faces, including a......a lack of clarity over Donald Trump s economic agenda Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-17 Mar-17 The performance of Canadian oil and gas service equities are plotted in tandem with the corresponding US index., Petroleum Services Association of Canada $.5 Mar-15 Jul-15 Nov-15 Mar-1 Jul-1 Oct-1 Feb-17 Much of Canada s oil and gas production is sold in US dollars. As such, the exchange rate significantly impacts corporate revenues and profits. Please see Advisories and Disclaimers at the end of the publication for important cautionary advisory and disclaimer language ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts 1

2 March, Crude Oil 5 WTI Crude Oil Price and Differential to Brent Near-Month WTI and Brent Differential; Rolling 1-Month History WTI ($US/B) 5 WTI Diff WTI WTI Dif f to Brent ($US/B) 5 US Crude Oil Futures West Texas Intermediate (WTI) to 19 July 3, WTI $US/B The forward curve is in contango for...year, and then most of this... flips into a slight 1 backwardation in 1 and WTI broke through $5/B before falling back down to $5/B by Friday Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-17 Mar-17 North American crude oil prices can sometimes disconnect from global prices depending on regional supply and demand dynamics. 5 Forward prices for WTI are plotted against months in the calendar year. Years are distinguished by color and symbol coding. Canadian Heavy Oil Price Differential to WTI Western Canadian Select (WCS) Differential; Rolling 1-Month History 7 Canadian Light Crude Oil Price Differential to WTI WTI and Edmonton Light differential; Rolling 1-Month History WCS ($US/B) 5 3 WCS Diff. WCS According to Enbridge, once the Line 3 replacement and......other Enbridge Mainline expansions are completed, only one... WCS Dif f to WTI ($US/B)...new Canadian pipeline project will be needed. 1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-17 Mar-17 Canadian heavy crude oil differentials are becoming less volatile with growing access to new markets via pipeline and rail Edm. Light ($US/B) 5 3 Edm. Light Diff. Edmonton L ight Enbridge s Line A was damaged on February 17. Edm. Light Dif f to WTI ($US/B) The line, which carries light crude and condensate......between Edmonton and Hardisty, remains shut down. Feb-1 Apr-1 Jun-1 Aug-1 Oct-1 Dec-1 The differential should reflect the transportation cost from Alberta to Cushing. Greater discounts can result from infrastructure or refinery outages Ratio of Long to Short Contracts - WTI Managed Money - Futures and Options 9 1 Total US Oil Production Monthly; 1 to Present Long:Short The number of long contracts held by money managers fell......by.% last week. 1 1 Offshore Oil Production Onshore Oil Production December production data showed a month over month......decrease of 91 MB/d, led by a 135 MB/d onshore decrease. Production is still up by 1 MB/d from the September low. Mar-15 Jun-15 Sep-15 Dec-15 Mar-1 Jun-1 Sep-1 Dec-1 This represents the relative bullishness of money managers on the price of oil in the United States., U.S. Commodity Futures Trading Commission The advancement of drilling and completion methods boosted US crude oil production, prior to the downturn in prices., U.S. Energy Information Administration ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts

3 March, Crude Oil Alberta Oil Production Monthly; Conventional and Oil Sands Upgraded Oil Sands Non-Upgraded Oil Sands Conventional 3 33 OPEC Oil Production Monthly; Rolling -Month History According to the IEA, OPEC achieved 9%...with the compliance... stated cuts in January. July 3, Saudi Arabia cut more than required, with January......production coming in.5 below December levels.. Nov-11 Nov-1 Nov-13 Nov-1 Nov-15 Nov-1 Most of Canada s oil production comes from Alberta; split between oil sands and conventional production. Source: Alberta Energy Regulator Jan-1 Jan-13 Jan-1 Jan-15 Jan-1 Jan-17 OPEC s production levels relative to its sustainable and spare capacity influences global crude prices. Source: Petroleum Intelligence Weekly Global Oil Supply-Demand Balance Quarterly; 1 to Present 13 1 The IEA s most recent monthly report showed that oil......demand growth was 1.. This was higher than estimates early in the year of ~1.. Shortfall Oversupply The IEA is forecasting growth of 1. for Negative numbers indicate a global crude shortfall, while positive numbers indicate an oversupply. Source: International Energy Agency US Crude Oil Imports Prior to the downturn, growing domestic supply was displacing crude oil imports. Crude oil imports for the current year are in blue. 15 US Weekly Crude Oil Imports from Canada Pipeline, Tanker and Barge Crude Imports; Rolling -Month History 1 US Exports of Crude Oil and Refined Products Weekly Data; 13 to Present Feb-15 Jun-15 Oct-15 Feb-1 Jun-1 Oct-1 Crude oil imports from Canada are taking market share from overseas imports Crude Oil Refined Products. Jan-13 Jul-13 Jan-1 Jul-1 Jan-15 Jul-15 Jan-1 Jul-1 Jan-17 The US exports more refined products than crude oil. If/when tight oil growth resumes, most export growth should come from crude oil exports. ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts 3

4 March, Crude Oil MMB US Crude Oil Stocks 17 1 US crude oil Growing US oil inventories rose production is by over MMB expected to last week. keep crude oil......stocks elevated this year. MMB 1,75 1,5 OECD Total Industry Oil Stocks Americas and Rest of OECD; 1 to Present We are now showing total petroleum stocks in the......oecd, split between the Americas and other OECD. This allows us to see how trends differ between the regions. July 3, OECD Americas* 35 1,5 Other OECD 3 US crude oil stock levels can affect crude oil prices. Stock levels for the current year are represented by the blue line. 1, Jan-1 Jan-13 Jan-1 Jan-15 Jan-1 Global oil stock levels can affect crude oil prices *Includes U.S. (~9%), Canada, Mexico and Chile. Source: International Energy Agency 19 % 1 95 US Weekly Refinery Utilization Rates (%) US Motor oline Consumption Refinery utilization rates change the supply of refined products, impacting price. Utilization for the current year is blue oline consumption accounts for almost half of all oil use in the US. oline consumption for the current year is represented by the blue line. 1 # of Oil Rigs - Play Lev el The US oil rig # of Oil Rigs - Total count rose by 7 1 Total US (Right-Axis) rigs last week to 5 9. The gain was led 1 by an increase of 5 rigs in the 1 Permian Eagle Ford Eagle Ford 1 US Oil Drilling Activity Baker Hughes Horizontal Oil Rig Counts; 1 to Present Bakken Cana Woodford Jan-1 Jul-1 Jan-15 Jul-15 Jan-1 Jul-1 Jan-17 Tracking US oil drilling by major play provides insight into the composition of US oil supply and growth trends. Source: Baker Hughes % of Edm. Light 1 % 1% 1 % 1 % % % % % % Daily NGL Prices as a % of Edmonton Light Propane & Butane Spot Prices at Edmonton, AB Cond ensate Butane (Spot) Propa ne (Spot) Propane prices as a % of Edm. Light have pulled back recently. This has partly been driven by a slowdown in US exports......due to a reduction in the arb between Asian and US prices. -% Feb-15 Jun-15 Oct-15 Feb-1 Jun-1 Oct-1 Feb-17 Natural gas liquids have become critical contributors to producer s cash flow. Prices are influenced by the price of oil as well as local supply and demand., ARC Financial Corp. ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts

5 March, Natural 3 Near-Month North American Natural Prices Daily Prices; Rolling 1-Month History $. $ $3. $.5 $. $ $1. $.5 Henry Hub rallied by almost $./MMBtu last week. Prices are still down by $1.1/ MMBtu from the Dec th high. AECO $C/GJ Henry Hub Differential $. Mar 5 Jun 3 Sep 1 Nov 3 Feb Near-month prices at AECO track Henry Hub prices, the exchange rate and the cost of transportation. Local factors can also affect price US Natural Futures Nymex (Henry Hub) to 19 July 3, Henry Hub gas futures are. averaging...for the rest of $3.9/MMBtu... 1, and fall to $.9/MMBtu for the same......time period in 1. Forward contract prices are plotted against months in the calendar year. Years are distinguished by color and symbol coding. 5 Ratio of Long to Short Contracts Henry Hub Managed Money Futures and Options Canadian Natural Futures AECO Hub (Bloomberg Estimate) to 19 Long:Short Net long Henry Hub contracts among money managers have......fallen by more than 5% in the last six weeks. $C/GJ AECO futures are trading in a 3.75 tighter range than Henry......Hub over the 1 next few years as falling Henry 19 Hub prices are......offset by a narrowing 3. differential Mar-15 Jun-15 Sep-15 Dec-15 Mar-1 Jun-1 Sep-1 Dec This represents the relative bullishness of money managers on the price of natural gas in the United States. Source: U.S. Commodity Futures Trading Commission AECO forward prices mimic Henry Hub futures plus a differential Global Natural Prices Japanese LNG, UK NBP, Henry Hub; Average Monthly Prices Japanese LNG UK NBP According to the Japanese METI, Japanese prices have risen to... $./MMBtu; the highest since January 15. Henry Hub Jan-1 Jan-13 Jan-1 Jan-15 Jan-1 $5 $ $3 $ $1 US Coal and Natural Power Generation Cost Converted to a $/MWh Equivalent $US/MWh Henry Hub Appalachian Coal With the recent fall in natural gas prices, the relative......economics of coal for power generation have improved. $ International natural gas prices strongly impact the economics of proposed LNG projects., Japanese Ministry of Economy, Trade and Industry This graph illustrates when it may be economic to begin coal-gas switching in power generation. Average power plant efficiencies are assumed. ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts 5

6 March, Natural 9 Closing Closing Spot Spot Prices Prices at at North North American American Natural Natural Hubs Hubs Superimposed on Relative Pipeline Flows Superimposed on Relative Physical Volumes Traded July 3, Kingsgate US$.5 AECO US$1.9 Open season on the TransCanada Mainline is expected to......close on March 9 th. The company is offering a toll of $.77/GJ......for 1-years, contingent on sufficient volumes......being committed. Malin US$. Stanfield US$.3 Opal US$.1 San Juan Ventura US$.7 \ Chicago US$. Waddington US$5 Dawn US$.93 Boston US$.5 TGP Zone - Marcellus US$. Socal US$ US$.33 Permian US$.3 Henry Hub US$.5 All prices in North America has an integrated natural gas market. Prices are determined by regional supply and demand, and pipeline flows Pipeline Flows Out of Western Canada Daily; US Natural Exports Excluding Canada Daily; US gas exports fell last week, led by a drop of ~.7 Bcf/d in......lng exports, as Sabine Pass undergoes maintenance. 7 The ability of gas producers to move gas out of the WCSB to eastern markets and the US is a major factor in local natural gas prices. Source: Various Pipeline Companies 1.. Between exports to Mexico and LNG shipments, the US is growing as a natural gas exporter. Robust US supply growth has driven this trend. Source: Bentek ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts

7 March, Natural 3 33 HDDs US Weekly Heating Degree Days Source: NOAA Heating degree days so far this year are tracking 1%......below the same time last year, driving reduced gas demand Week US Total Natural Demand Daily; US natural gas demand so far this year has averaged Bcf/d below the same time last year. July 3, Weekly natural gas demand is directly tied to the weather. The current year is in dark blue. Source: National Oceanic and Atmospheric Administration Total US demand fluctuates between Bcf/d in the summer and over 1 Bcf/d in the winter. Weather is the most important driver of consumption. Source: Bentek Total US Dry Natural Production 3 35 Daily Western Canadian Production Estimated Using Major Pipeline Receipts US natural gas production has remained flat for the start......of the year averaging 7. Bcf/d;. Bcf/d below last year US production started ramping up in late 7 and continues to grow year over year. Source: Bentek This includes receipts on the TCPL, Alliance, WestCoast and Trans pipelines. Source: Various Pipeline Companies 3 37 Bcf (5) (1) (15) () (5) (3) Weekly US Natural Storage Net Change Weekly Injection or (Withdrawals); 9 to Current Storage in the week ending Feb th gained by 7 Bcf. This is the first weekly storage gain in Feb on record. (35) Tcf Total Working Natural in US Storage With a surprise storage build, the surplus to the 5-year......average nearly doubled, up to 95 Bcf. This is still well below the surplus this time last year of Bcf..5 Weekly gas storage reports provide a snapshot of supply and demand. Current year changes are represented by the blue line. The EIA reports changes in US natural gas inventories held in underground storage facilities on a weekly basis. ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts 7

8 March, Natural and Other Indicators 3 39 TransCanada Intra-AB Deliveries; Current Year and Historical Tracks 1 # of Rigs Weekly Canadian Oil and Drilling Activity Baker Hughes Average Rig Counts; Rolling -Month History Rigs Alberta Natural Demand Alberta natural gas demand has grown steadily in recent years, largely driven by new oil sands projects coming on line. Source: TransCanada Pipelines Oil Rigs Mar-15 Jul-15 Nov-15 Mar-1 Jul-1 Nov-1 Alberta Crown Land Sales Excluding Oil Sands Year-over-Year; Cumulative 3 $ Billions Last week there were 197 oil rigs and 13 gas rigs operating in......canada, versus 5 and 79 in the same week last year. Unlike US drilling activity, Canadian rigs are dispatched seasonally. Capital allocation by operators is driven by views of future oil and gas prices. Source: Baker Hughes Industry paid $3.9 million at BC s Feb land sale; mainly......for land in the Montney. Last year s Feb land sale totaled $. According to the CAODC, utilization so far this year has......averaged 3% versus 5% last year Land prices are an important component of F&D costs. In Alberta, sales of petroleum and natural gas rights are held every two weeks. Source: Alberta Department of Energy Bcf Well Completions (s) # of Rigs - Play Lev el Western Canadian Natural Storage Levels Weekly; Current Year and Historic Tracks 11 July 3, US Drilling Activity Baker Hughes Horizontal Rig Counts; 1 to Present Marcellus 1 # of Rigs - Total Total US (Right Axis) Jan-1 Jul-1 Jan-15 Jul-15 Jan-1 Jul-1 Jan-17 Canadian Cumulative Well Completions Current Year vs Years Prior Week Relative year-over-year drilling activity is highlighted in this chart. Cumulative well completions for the current year are shown in blue. Source: Daily Oil Bulletin/JWN Canada s natural gas storage level provides a good metric if the country is well stocked. Abnormally high or low storage can affect the basis. Haynesville Eagle Ford Tracking US gas drilling by major play provides insight into the composition of US gas supply and growth trends. Source: Baker Hughes Unlike US storage, Western Canadian gas... PSAC revised its well forecast to 5,15 from,175. ARC s forecast is currently higher at ~5,3....drew last week by a relatively mild Bcf. Natural gas directed drilling fell by 5 rigs last week ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts

9 March, Canadian Industry Metrics Estimated Capital Flow in the Canadian Oil and Economy for Industry Revenue, Cash Flow, Reinvestment, Drilling Activity and Production $C 3.1 per BOE Oil & Prices 7.1 Million BOE/day Production Volume $C 19.7 Billion E&P Revenue Capital Flow in the Canadian Oil and Economy G&A Royalties & Taxes Operating Expenditures Cash Flow $C.3 Billion Exploration & Development Foreign Investment and Capital Outflow CAPEX Dividends and Distributions Debt, Equity $C. Billion July 3, Reserve Additions 5,3 Wells Drilling Activity Service Sector Revenue Land, Acquisitions Canadian Industry Statistics: Historical Data and Forecast Canadian Industry Metrics P rice P ro ductio n Vo lume C apital Inflo w R einvestment D rilling Well Split Average Price Edmonton Par AECO Conv. Liquids Bitumen + Synthetic Natural Total Volume Total Revenue After-tax Cash Flow Conv. Oil and Oilsands Reinvest Ratio Wells Compl. Avg Rig Utiliz. Oil Wells Wells $/BOE $C/B $C/GJ Average M BOE/d Average M BOE/d M BOE/d M BOE/d (@ :1) (@ :1) $C millions $C millions $C millions $C millions x:1 #/ Year % % % ,99 1,7,7 5, 15,5 3,55 3,93 1, ,77 1% 3% 5% , 1,331,51 5,3 9,57 3,,335 11,7.91,3 5% 1% 51% ,3 1,3,3 5, 11,5 3,59 35, 17, ,119 % 5% % ,73 1,,3 5,7 115,9 53,,139, ,7 5% 9% 31% ,95 1,73,37 5, ,39,9 39,733 7, ,7 % 3% 17% ,3 1,9,33,3 1,77 5,711 3,15 3, ,71 % % 1% ,,13,5,9 19,53 71,,7 33, , 5% 7% % ,93,373,79,35,17,19 3,551,9. 5,3 % 9% 31% e ,91,393,95,9 7,7,,53 1,9 1.7, 17% % % e ,,55,5 7,7 19,79,3,995 13,.91 5,3 % % % Advisories and Disclaimers: This document is provided for informational purposes only and none of the information contained herein is intended to provide, nor should be construed as, investment, financial, legal or other advice and should not be relied upon as such. Certain of the information and data contained herein has been obtained or prepared from publicly available documents and other sources prepared by third parties, and ARC has relied upon such information and data. ARC does not audit or independently verify such information and data and ARC makes no representations or warranties as to the accuracy or completeness of such information and data nor the conclusions derived therefrom. This document has been published on the basis that ARC shall not be responsible for, and ARC hereby expressly disclaims any responsibility or liability for, any financial or other losses or damages of any nature whatsoever arising from or otherwise relating to any use of this document. Certain information contained herein may constitute forward-looking information and forward-looking statements" (collectively, "forward-looking statements") under the meaning of applicable Canadian securities laws. Forward-looking statements include estimates, plans, expectations, intentions, opinions, forecasts, projections, guidance or other statements that are not statements of fact, including but not limited to global and industry economic conditions and policies, production, demand and commodity prices. Although ARC believes that the assumptions underlying and expectations reflected in such forward-looking statements are reasonable, it can give no (and does not give any) assurance that such assumptions and expectations will prove to have been correct. Such forward-looking statements involve known and unknown risks, uncertainties and other factors outside of ARC's control that may cause actual results to differ materially from those expressed herein. Neither ARC nor any of its affiliates undertakes any obligation to publicly revise such forward-looking statements to reflect subsequent events or circumstances, except as required by law. ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts 9