Spot AECO $Cdn/GJ. 1 2 Daily Index Values; Rolling 12-Month History. $US/$Cdn $0.90 $0.85 $0.80 $0.75 $0.70

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1 January 1, Chart Watch ARC Energy Charts Visit for more information on this publication and the Institute WTI hit its highest since December 1 US oil inventories fell counter to seasonal trends US gas production is recovering from freeze offs US gas storage had the largest draw ever AB s first land sale totaled $1.7 MM Spot WTI Crude $US/B.3 á Edmonton Light $US/B Spot Henry Hub Spot AECO $Cdn/GJ Spot AECO Basis Currency $US/$Cdn 7.7 á.9 á 1. á á á Indexed to 1 Months Ago Broad Equity Markets Year-to-Date 1 Daily Index Values; Rolling 1-Month History So far in the DJIA is up by.%. Shanghai Composite S&P/TSX Composite Dow Jones The TSX Composite is up by less than 1% in the same time 9 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-1 Indexed to 1 Months Ago 11 1 Performance of Oil and Equities Year-to-Date Daily Index Values; Rolling 1-Month History 9 ARC Junior E&P Index S&P E&P S&P/TSX E& P Index Large cap E&Ps have gained so far in, rising with WTI. US and Cdn E&Ps are up by.1% and 3.1% respectively. 7 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-1 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. Indexed to 1 Months Ago Oil & Service Equities Year-to-Date 3 Daily Index Values; Rolling 1-Month History Philadelphia Service Index PSAC Cana dian In dex Service cos have also gained with oil prices so far this year. US and Cdn service cos are up 9.% and 7.% respectively. $US/$Cdn $.9 $. $. Canadian Currency Exchange Daily Close Values; Rolling -Month History Projections are for the US Federal Reserve to hike......interest rates three more times in. The Bank of Canada is also expected to raise rates in 1 $.7 $.7 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-1 The performance of Canadian oil and gas service equities are plotted in tandem with the corresponding US index., Petroleum Services Association of Canada $. Jan-1 May-1 Sep-1 Jan-17 May-17 Sep-17 Jan-1 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 January 1, Crude Oil WTI Crude Oil Price and Differential to Brent Near-Month WTI and Brent Differential; Rolling 1-Month History WTI ($US/B) 7 3 WTI rose to $.3/B, its highest since December 1. WTI Diff WTI Dif f to Brent ($US/B) 1 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-1 WTI Brent also gained on the week, breaking through $7/B. North American crude oil prices can sometimes disconnect from global prices depending on regional supply and demand dynamics US Crude Oil Futures West Texas Intermediate (WTI) to Oil prices have WTI $US/B risen along the...the gain has curve in recent been much more weeks, but... substantial in 19 the front end. The -month contract is now trading at a discount to... spot of $7./ B, the steepest backwardation since Aug 1. July 3, Forward prices for WTI are plotted against months in the calendar year. Years are distinguished by color and symbol coding. Canadian Heavy Oil Price Differential to WTI Western Canadian Select (WCS) Differential; Rolling 1-Month History 7 Canadian Light Crude Oil Price Differential to WTI WTI and Edmonton Light differential; Rolling 1-Month History WCS ($US/B) 3 WCS remains significantly discounted to WTI due to... WCS Diff. WCS...a local glut and export pipeline issues. WCS Dif f to WTI ($US/B) 3 1 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-1 Canadian heavy crude oil differentials are becoming less volatile with growing access to new markets via pipeline and rail. 1 1 Edm. Light ($US/B) 3 Edmonton Light crude is also discounted, although the......diff narrowed last week to $./B from $.7/B. Edm. Light Diff. Edmonton L ight Edm. Light Dif f to WTI ($US/B) 1 Dec-1 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 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 ratio of long:short WTI contracts among Managed......Money has surged recently to the highest since July 1. Speculator bullishness has been supportive of oil prices. Jan-1 Apr-1 Jul-1 Oct-1 Jan-17 Apr-17 Jul-17 Oct-17 This represents the relative bullishness of money managers on the price of oil in the United States., U.S. Commodity Futures Trading Commission 1 1 Offshore Oil Production Onshore Oil Production The EIA expects that US oil production......will surpass 1 in the next few As of October months. production was 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 January 1, Crude Oil Alberta Oil Production Monthly; Conventional and Oil Sands Upgraded Oil Sands Non-Upgraded Oil Sands Conventional The OPEC cut agreement, made in early December, is... OPEC Oil Production Monthly; Rolling -Month History...providing support to global crude prices. July 3, Oct-1 Oct-13 Oct-1 Oct-1 Oct-1 Oct-17 Most of Canada s oil production comes from Alberta; split between oil sands and conventional production. Source: Alberta Energy Regulator 3 9 Nov-1 Nov-13 Nov-1 Nov-1 Nov-1 Nov-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 latest IEA Oil Market report showed...oil market was that the global... in a.7 deficit in Q3. Shortfall The next oil market report will be released on Friday. Oversupply Negative numbers indicate a global crude shortfall, while positive numbers indicate an oversupply. Source: International Energy Agency US Crude Oil Imports According to Bloomberg, in China surpassed......the United States as the world s largest oil importer. Prior to the downturn, growing domestic supply was displacing crude oil imports. Crude oil imports for the current year are in blue. 1 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 US imports from Canada in 17 were up 1 from Jan-1 May-1 Sep-1 Jan-17 May-17 Sep-17 Crude oil imports from Canada are taking market share from overseas imports Crude Oil Refined Products. Jan-13 Jan-1 Jan-1 Jan-1 Jan-17 Jan-1 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 January 1, Crude Oil 17 US Crude Oil Stocks 1 MMB 3 Crude oil inventories were drawn by.9 MMB last week. This was offset by a large build in product stocks. Crude stocks are now just MMB above the -year average. 1 MMB 1,7 1, 1, OECD Total Industry Oil Stocks Americas and Rest of OECD; 1 to Present The last IEA Oil Market Report...to the five showed an OECD year average of storage surplus MMB, down from more... Other OECD...than 3 MMB earlier in the year. July 3, OECD Americas* This data is current up to Oct. Nov data comes out Fri. 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-1 Jan-1 Jan-17 Global oil stock levels can affect crude oil prices *Includes U.S. (~9%), Canada, Mexico and Chile. Source: International Energy Agency US Weekly Refinery Utilization Rates (%) 19 US Motor oline Consumption % Above normal refinery utilization is contributing to the......decline in crude stocks and growth in product stocks... 7 Refinery utilization rates change the supply of refined products, impacting price. Utilization for the current year is blue. 7. 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. US Oil Drilling Activity Baker Hughes Horizontal Oil Rig Counts; 1 to Present 1 Daily NGL Prices as a % of Edmonton Light Propane & Butane Spot Prices at Edmonton, AB # of Oil Rigs - Play Lev el Total US (Right-Axis) 3 1 Permian Eagle Ford Bakken Cana Woodford The US oil rig count rose by 1 last week to 7. The growth was mostly outside of the major shale plays. # of Oil Rigs - Total 1 Jan-1 Jul-1 Jan-1 Jul-1 Jan-1 Jul-1 Jan-17 Jul-17 Jan 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 % % % % % % Cond ensate Butane (Spot) Propa ne (Spot) -% Dec-1 Apr-1 Aug-1 Dec-1 Apr-17 Aug-17 Dec-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 January 1, Natural 3 Near-Month North American Natural Prices Daily Prices; Rolling 1-Month History $. $ $3. $. $. $1. $1. $. Henry Hub has rallied modestly in recent weeks due to record... Differential...cold temperatures. AECO $C/GJ Henry Hub $. Jan 1 Apr 1 Jul 13 Oct 11 Jan 9 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 July 3, Cold weather has pulled up the front end of the curve, but......spring futures 19 have not been as impacted. The remainder of Q1 is up by $.1/MMBtu in the last month......versus only $.1/MMBtu for Q. Forward contract prices are plotted against months in the calendar year. Years are distinguished by color and symbol coding. Ratio of Long to Short Contracts Henry Hub Managed Money Futures and Options Canadian Natural Futures AECO Hub (Bloomberg Estimate) to Long:Short Jan-1 Apr-1 Jul-1 Oct-1 Jan-17 Apr-17 Jul-17 Oct-17 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 $C/GJ.7 AECO futures 19. for the remainder of are. at $C 1.3/GJ AECO forward prices mimic Henry Hub futures plus a differential Global Natural Prices Japanese LNG, UK NBP, Henry Hub; Average Monthly Prices UK NBP Japanese LNG As of November the difference...prices and between Henry Hub was Japanese LNG... $.1/MMBtu. This is the widest since Jan 1; supporting LNG economics. Henry Hub Jan-13 Jan-1 Jan-1 Jan-1 Jan-17 $ $ $3 $ $1 US Coal and Natural Power Generation Cost Converted to a $/MWh Equivalent $US/MWh Henry Hub Appalachian Coal $ 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

6 January 1, 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, AECO US$1.9 Kingsgate US$. Malin US$.9 Stanfield US$. Opal US$. San Juan Although temperatures have moderated, the lingering... Ventura US$.9...effects of record colds temps is still impacting... \...pricing at some natural gas hubs. Chicago US$3.9 Waddington US$. Dawn US$3.3 Boston US$19. TGP Zone - Marcellus US$.39 Socal US$3. US$. Permian US$. Henry Hub US$.9 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; Export volumes have been...flows to Dawn strong since the on November 1 st. start of LTFP... Exports since...up by.7 then have been... Bcf/d from the first 1 months of. 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 US Natural Exports Excluding Canada Daily;. 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 January 1, Natural 3 33 HDDs US Weekly Heating Degree Days Source: NOAA After setting a heating degree day record in the first week......of the year, temps were more mild last week. The to 1 day forecast is warmer than normal in eastern US Week Weekly natural gas demand is directly tied to the weather. The current year is in dark blue. Source: National Oceanic and Atmospheric Administration US Total Natural Demand Daily; Warmer weather softened demand last week. Demand last week was 33 Bcf/d below the week prior. July 3, 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 3 Daily Western Canadian Production Estimated Using Major Pipeline Receipts During the bomb cyclone there was a substantial......reduction in production due to freezeoffs. This production started to recover last week WCSB gas production is also recovering from freeze-offs. Production is above this time last year. US production started ramping up in late 7 and continues to grow year over year. Source: Bentek 1 This includes receipts on the TCPL, Alliance, WestCoast and Trans pipelines. Source: Various Pipeline Companies 3 37 Bcf 1 () (1) () (3) Weekly US Natural Storage Net Change Weekly Injection or (Withdrawals); 9 to Current The gas storage draw in the first week of was a record. This was driven by a combination of high demand and reduced......production due to freeze-offs. () Tcf Total Working Natural in US Storage The larger than normal draw brought storage to a deficit of Bcf to the five-year average. 1 Storage hasn t been this low to start the year since.. 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 January 1, Natural and Other Indicators 3 39 TransCanada Intra-AB Deliveries; Current Year and Historical Tracks Alberta Natural Demand Demand pulled back slightly last Still, average week with demand in the warmer weather. last 3 weeks has been. Bcf/d......over the same time a year ago.. Alberta natural gas demand has grown steadily in recent years, largely driven by new oil sands projects coming on line. Source: TransCanada Pipelines Bcf 3 1 Western Canadian Natural Storage Levels Weekly; Current Year and Historic Tracks Western Canadian storage in the week ending Jan th was % full, compared to.% last week. 1 July 3, The week ending Jan th saw a large draw of over a. Bcf/d. 1 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. Weekly Canadian Oil and Drilling Activity Baker Hughes Average Rig Counts; Rolling -Month History 1 US Drilling Activity Baker Hughes Horizontal Rig Counts; 1 to Present # of Rigs 1 1 More rigs were put to work last week, with the CAODC... Rigs...reporting that % of the fleet is now being utilized. Oil Rigs # of Rigs - Play Lev el 1 Total US (Right Axis) 1 1 Marcellus Haynesville Eagle Ford The US gas rig count gained by last week to 17. # of Rigs - Total Jan-1 May-1 Sep-1 Jan-17 May-17 Sep-17 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 Jan-1 Jul-1 Jan-1 Jul-1 Jan-1 Jul-1 Jan-17 Jul-17 Jan-1 Tracking US gas drilling by major play provides insight into the composition of US gas supply and growth trends. Source: Baker Hughes 3 $ Billions Alberta Crown Land Sales Excluding Oil Sands Year-over-Year; Cumulative The AB government s first land sale of produced... $1.9 MM in bonus bids, vs $1.73 MM for the first......sale in 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 Well Completions (s) 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 ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts

9 January 1, Canadian Industry Metrics We are now showing industry metrics. Estimated Capital Flow in the Canadian Oil and Economy for Industry Revenue, Cash Flow, Reinvestment, Drilling Activity and Production $C 3.73 per BOE Oil & Prices 7. Million BOE/day Production Volume $C 1. Billion E&P Revenue Capital Flow in the Canadian Oil and Economy G&A Royalties & Taxes Operating Expenditures Cash Flow $C.7 Billion Exploration & Development Foreign Investment and Capital Outflow CAPEX Dividends and Distributions Debt, Equity $C 3.7 Billion July 3, Reserve Additions,93 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 % % % , 1,331,1,3 9,7 3,,33 11,7.91,3 % 1% 1% ,3 1,3,3, 11, 3,9 3, 17, ,119 % % % ,73 1,,3,7 11,9 3,,139, ,7 % 9% 31% ,9 1,73,37,97 111,39,9 39,733 7, ,7 % 3% 17% ,3 1,9,33,3 1,77,711 3,1 3, ,71 % % 1% ,,1,,99 19,71 7,1,7 33, , % 7% % ,93,3,, 93,1,99 31,9,99 1.9,3 % 9% 31% ,9,1,7,93,,7, 1, 1., 17% 7% 3% e ,9,9,7 7,17 97,3 39,7 31,97 13, 1.1,93 % 7% 3% e ,9,9,9 7, 1,, 31,179 1,19 1.,93 % 7% 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