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

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1 January, 1 Chart Watch Canadian oil differentials remain very narrow ARC Energy Charts 1 Cdn crude exports by rail hit 33 kb/d in Nov US crude inventories rose by MMB Visit for more information on this publication and the Institute 3 US natural gas production is up.3 Bcf/d YTD We have updated our industry outlook for 1 Spot WTI Crude $US/B 3. á Edmonton Light $US/B Spot Henry Hub Spot AECO $Cdn/GJ Spot AECO Basis Currency $US/$Cdn á 1.. á á á á Indexed to 1 Months Ago 11 1 Broad Equity Markets Year-to-Date 1 Daily Index Values; Rolling 1-Month History Shanghai Composite S&P/TSX Composite Dow Jones Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-1 Indexed to 1 Months Ago Performance of Oil and Gas Equities Year-to-Date Daily Index Values; Rolling 1-Month History ARC Junior E&P Index S&P E&P S&P/TSX E& P Index Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 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. Oil & Gas 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 Index PSAC Cana dian In dex Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 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 $US/$Cdn $. $. $. $. Jan-1 May-1 Sep-1 Jan-1 May-1 Sep-1 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 1 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 Diff WTI ($US/B) WTI Dif f to Brent ($US/B) WTI Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-1 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) 1 to WTI $US/B 1 July 3, 1 Forward prices for WTI are plotted against months in the calendar year. Years are distinguished by color and symbol coding. Canadian Heavy Oil Price Differential to WTI Western Canadian Select (WCS) Differential; Rolling 1-Month History Canadian Light Crude Oil Price Differential to WTI WTI and Edmonton Light differential; Rolling 1-Month History WCS ($US/B) 3 WCS Diff. WCS WCS Dif f to WTI ($US/B) 1 Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 Jan-1 The differential should reflect quality differences and transportation costs. Greater discounts can result from infrastructure or refinery outages Edm. Light ($US/B) 3 Edm. Light Diff. Edmonton L ight Edm. Light Dif f to WTI ($US/B) 1 Jan-1 Mar-1 May-1 Jul-1 Sep-1 Nov-1 The differential should reflect the transportation cost from Alberta to Cushing. Greater discounts can result from infrastructure or refinery outages Canadian Crude Oil Exports by Rail Monthly; 1 to Present 1 Total US Oil Production Monthly; 1 to Present MB/d Offshore Onshore Rail is expected to grow as the pipelines have hit the limit for moving additional barrels of crude oil, and supply is still growing. Source: National Energy Board The advancement of drilling and completion methods is increasing US crude oil production., U.S. Energy Information Administration 1 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 OPEC Oil Production Monthly; Rolling -Month History July 3, Oct-13 Oct-1 Oct-1 Oct-1 Oct-1 Oct-1 Most of Canada s oil production comes from Alberta; split between oil sands and conventional production. Source: Alberta Energy Regulator 3 Dec-13 Dec-1 Dec-1 Dec-1 Dec-1 Dec-1 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 Shortfall Oversupply Negative numbers indicate a global crude shortfall, while positive numbers indicate an oversupply. Source: International Energy Agency Contracts,,, 3,, 1, Long and Short Contracts - WTI Managed Money - Futures Long Short Jan-1 Apr-1 Jul-1 Oct-1 Jan-1 Apr-1 Jul-1 Oct-1 Long contracts take the position that WTI oil price will increase, while short contracts expect a decline., U.S. Commodity Futures Trading Commission 1 US Crude Oil Imports Weekly Data; 13 to Present 1 US Exports of Crude Oil and Refined Products Weekly Data; 13 to Present Other Imports Imports from Canada Jan-13 Jan-1 Jan-1 Jan-1 Jan-1 Jan-1 Jan-1 Crude oil imports from Canada are taking market share from overseas imports. 3 1 Crude Oil Refined Products Jan-13 Jan-1 Jan-1 Jan-1 Jan-1 Jan-1 Jan-1 The US exports more refined products than crude oil. With the rapid growth of tight oil, most export growth should come from crude oil exports. 1 ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts 3

4 January, 1 Crude Oil 1 US Crude Oil Stocks 1 MMB MMB 3, OECD Total Industry Oil Stocks Monthly; 1 to Present July 3, 1 3, 3 1,, 3 US crude oil stock levels can affect crude oil prices. Stock levels for the current year are represented by the blue line., Jan-1 Jan-13 Jan-1 Jan-1 Jan-1 Jan-1 Jan-1 OECD stock levels can affect crude oil prices. Source: International Energy Agency 1 % 1 US Weekly Refinery Utilization Rates (%) US Motor Gasoline Consumption 1.. Refinery utilization rates change the supply of refined products, impacting price. Utilization for the current year is blue.. Gasoline consumption accounts for almost half of all oil use in the US. Gasoline 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 Permian Bakken 1 Cana Woodford # of Oil Rigs - Total 1, Eagle Ford Jan-1 Jan-1 Jan-1 Jan-1 Jan-1 Jan-1 1, 1, 1, 1, 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% 1% % % % % Cond ensate Butane (Spot) Propa ne (Spot) % Dec-1 Apr-1 Aug-1 Dec-1 Apr-1 Aug -1 Dec-1 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. 1 ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts

5 January, 1 Natural Gas 3 Near-Month North American Natural Gas Prices Daily Prices; Rolling 1-Month History AECO $C/GJ Henry Hub Differential. Jan Apr Jul Oct Jan 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 Gas Futures Nymex (Henry Hub) 1 to July 3, 1. 1 Forward contract prices are plotted against months in the calendar year. Years are distinguished by color and symbol coding. Long and Short Contracts Henry Hub Managed Money - Futures Canadian Natural Gas Futures AECO Hub (Bloomberg Estimate) 1 to Contracts, 3, 3,,, 1, 1, Long $C/GJ , Long contracts take the position that Henry Hub gas price will increase, while short contracts expect a decline. Source: U.S. Commodity Futures Trading Commission Global Natural Gas Prices Japanese LNG, UK NBP, Henry Hub; Average Monthly Prices UK NBP Japanese LNG Short Dec-1 Apr-1 Aug-1 Dec-1 Apr-1 Aug-1 Jan-1 Jan-1 Jan-1 Jan-1 Jan-1 Henry Hub.. $US/MWh 3 1 AECO forward prices mimic Henry Hub futures minus a differential. US Coal and Natural Gas Power Generation Cost Converted to a $/MWh Equivalent Henry Hub Pennsylvania 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. 1 ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts

6 January, 1 Natural Gas Closing Closing Spot Spot Prices Prices at at North North American American Natural Natural Gas Gas Hubs Hubs Superimposed on Relative Pipeline Flows Superimposed on Relative Physical Volumes Traded July 3, AECO US$1. Kingsgate US$3. Malin US$3.3 Stanfield US$3.3 Opal US$3.3 San Juan Ventura US$3.1 \ Chicago US$3.1 Waddington US$3. Dawn US$3.1 Boston US$. TGP Zone - Marcellus US$. Socal US$3. US$. Permian US$.3 Henry Hub US$3.1 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; 3 31 US Natural Gas Exports Excluding Canada Daily; 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 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 1 ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts

7 January, 1 Natural Gas 3 33 HDDs US Weekly Heating Degree Days Source: NOAA US Total Natural Gas Demand Daily; 1 July 3, 1 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 in the summer and during the winter as weather is an important driver of consumption. Source: Bentek Total US Dry Natural Gas Production 3 3 Daily Western Canadian Production Estimated Using Major Pipeline Receipts US production started ramping up in late and continues to grow year over year. Source: Bentek 1 This includes receipts on the TCPL, Alliance, WestCoast and TransGas pipelines. Source: Various Pipeline Companies 3 3 Bcf 1 () (1) () (3) Weekly US Natural Gas Storage Net Change Weekly Injection or (Withdrawals); to Current 1 1 () Tcf Total Working Natural Gas in US Storage 1. 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. 1 ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts

8 January, 1 Natural Gas and Other Indicators 3 3 TransCanada Intra-AB Deliveries; Current Year and Historical Tracks Alberta Natural Gas Demand 1. Alberta natural gas demand has grown steadily in recent years, largely driven by new oil sands demand and power generation projects. Source: TransCanada Pipelines Bcf 3 1 Western Canadian Natural Gas Storage Levels Weekly; Current Year and Historic Tracks 1 1 July 3, 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 Gas Drilling Activity CAODC Drilling Rig Count; Current Year and Historical Tracks 1 US Gas Drilling Activity Baker Hughes Horizontal Gas Rig Counts; 1 to Present # of Rigs Drilling Unlike US drilling activity, Canadian rigs are dispatched seasonally. Capital allocation by operators is driven by views of future oil and gas prices. Source: CAODC # of Gas Rigs - Play Lev el Total US (Right Axis) Marcellus Haynesville Eagle Ford # of Gas Rigs - Total Jan-1 Jan-1 Jan-1 Jan-1 Jan-1 Jan-1 Tracking US gas drilling by major play provides insight into the composition of US gas supply and growth trends. Source: Baker Hughes Alberta Crown Land Sales Excluding Oil Sands Year-over-Year; Cumulative 3 $ Billions 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 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 1 ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts

9 January, 1 Canadian Industry Metrics Estimated Capital Flow in the Canadian Oil and Gas Economy for 1 Industry Revenue, Cash Flow, Reinvestment, Drilling Activity and Production $C 3. per BOE Oil & Gas Prices. Million BOE/day Production Volume $C. Billion E&P Revenue Capital Flow in the Canadian Oil and Gas Economy G&A Royalties & Taxes Operating Expenditures Cash Flow $C 33. Billion Exploration & Development Foreign Investment and Capital Outflow CAPEX Dividends and Distributions Debt, Equity $C 31. Billion July 3, Reserve Additions,1 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 Gas Total Volume Total Revenue After-tax Cash Flow Conv. Oil and Gas Oilsands Reinvest Ratio Wells Compl. Avg Rig Utiliz. Oil Wells Gas 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 % % % ,3 1,3,3, 11, 3, 3, 1, ,11 1% % % ,3 1,,3, 11, 3,,13, , % % 31% , 1,3,3, 111,3, 3,33, , % 3% 1% ,3 1,,33,3 1,,11 3,1 3, ,1 % % 1% ,,1,, 1,33,, 33, , % % % ,3,3,, 3,1,3 31,, 1.,3 % % 31% ,11,1,3, 3,1 3, 3, 1, 1.3, 1% % 3% ,,,,3 1,1,,1 13,3., 3% % 3% 1e ,33,,3, 1,3,, 1,., 3% % 3% 1e ,,,,,1 3,3 1,3 1,.,1 % % 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. 1 ARC Energy Research Institute. All Rights Reserved. ARC Energy Charts