Barclays CEO Energy-Power Conference - ARC Resources · Barclays CEO Energy-Power Conference September 5, 2018. Advisory Statements Forward-looking Information and Statements This

BarclaysCEO Energy-PowerConferenceSeptember 5, 2018

Advisory Statements

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 2018 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 northeast British Columbia Montney (“NE BC 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 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 in British Columbia, 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 2018 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 6 Mcf:1 barrel 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.

Netback

ARC calculates netback on a total and per boe basis as sales 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 feels that its 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 boe basis assists Management and investors 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 2017

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 operating performance, to measure how effectively Management utilizes the capital it has been provided and to demonstrate to shareholders that capital has been used wisely over the long

term.

ARC at a Glance

A Leading Montney Producer Committed to Long-term Value Creation and Shareholder Returns

Global Reach55% Canada

35% US

10% Abroad

Diversified

Market AccessPreserves Margins

8th LargestCanadian

ConventionalProducer

Low-costProducer

470Valued

Employees

$6 billionEnterprise Value

22 Yearsof Success

Proven Strategy of

Risk-managed

Value Creation

ARC Is Building Sustainable Montney Businesses

Businesses Sustain Production and Generate Free Cash Flow at Low Reinvestment Rates

0

30,000

60,000

90,000

120,000

150,000

2009 Non-coreDispositions

2010 2011 2012 2013 2015 2015 2017 2019

Sunrise

Phase II

Dawson

Phase III

Tower

Battery

ExpansionSunrise

Phase IParkland/Tower

Phase II

Ante Creek

Phase IDawson

Phase IIDawson

Phase I

Montney Production

Cardium & Non-core Production

Montney Businesses

ARC’s Vision & Principles of Business

To Deliver Industry-leading Returns via Per Share Growth in Funds from Operations and Dividends

Disciplined

Capital Allocation

Physical Market

Access and Financial

Risk Management

Focus on Efficiency

Improvements

2009 2017

Net Gas Well Count

77%2009 2017

Operating Expenses

37%

2009 2017

Sustaining Capital

Requirements

29%2009 2017

Three-year Average

F&D Costs

61%

~$0.8 billionof realized cash gains

on risk management

contracts since 2009

Multiple Sales Pointsincluding US Midwest,

US Pacific Northwest, Henry Hub,

Dawn, AECO, Station 2 hubs

ARC’s Plan

2017

Monthly dividend of

$0.05 per share

Sold Saskatchewan

assets

Eliminated DRIP and

SDP plans

118,671 boe per day

2018

Sustain Montney

businesses

Build 3,000 bbl per day

battery at Attachie West

130,000 to 134,000

boe per day

2019

Maintain consistent

investment levels

Bring on Sunrise

Phase II (additional

120 MMcf/day in service)

Progress multiple large-

scale projects, leading

to per share production

and cash flow growth• Attachie West Phase I

• Dawson Phase I & II liquids-

handling enhancements

• Dawson Phase IV

ARC’s Plan Is Fully Funded and Demonstrates Our Ongoing Focus on Profitability, Sustainability and Creating Optionality

2016

Brought on Dawson

Phase III

Rebuilt liquids

production from

divestments

Achieved success

in Lower Montney and

Attachie

122,937 boe per day

Maintain Share Count

Progress Sunrise

Phase II (60 MMcf/day

in service by year-end)

ARC’s Proven Development Model

Inventory at All Stages Allows for Self-funding and Full-cycle Returns across Portfolio

Dawson Phase I & II

Sunrise Phase I

Attachie East

Parkland/Tower Phase I & II

Net Cash Flow +

Sundown

Attachie West (Pilot)

Redwater

Pembina

Growth for Future Phase

• Exploration

• Appraisal / Piloting

Development Phase

• Develop to Commercialize

• Invest in Infrastructure

• Geographic and Commodity Diversity

Free Cash Flow Phase

• Optimization

• Maintenance

• Development to Sustain Cash Flow

Growth & Development Capital

$275 million

Sustaining Capital

$390 million

Ante Creek (Central)

Dawson Phase III

Pouce Coupe

Dawson Phase IV

Attachie West Phase I

2018 Budget

$690 million (1)

Sunrise Phase II

Parkland/Tower Phase III

Septimus

(1) Includes $25 million of non-core and corporate capital.

Ante Creek (South)

Dawson Phase V

ARC Has Optionality in the Montney

ARC’s Montney Assets Are Strategically Located

Commodity Optionality

Egress Optionality

Geographic Optionality

Multi-layer Optionality

Oil and Liquids

Dry Gas

ABBC

Red Creek

Attachie

SeptimusTower

ParklandSunsetSunrise

Sundown

Dawson

Pouce Coupe

Ante Creek

1,000m

2,000m

3,000m1,000m

Montney Erosional Edge

2,000m

Lower Montney

10 kPa/m Line

Condensate-rich

Gas

ARC Has Identified Multiple Layers to Develop

Significant Future Delineation Opportunities with the Development of Efficient and Sustainable Resource Base

Attachie Septimus Sunrise Tower Parkland Dawson Pouce Coupe

Montney

A

Montney

B

Montney

C

Montney

D

Montney

E

Existing Horizontal Wells, Development Existing Horizontal Wells, Pilots Potential Horizontal Wells

Up

pe

r M

on

tney

Lo

we

r M

on

tne

y

ARC Is Growing Its Liquids Production

Development Activities in the Lower Montney Are Focused on Growing Liquids Production (1)

(1) Only Lower Montney wells are displayed.

10-34

14-14

07-32

16-13

09-21

03-18

11-04

01-31

02-25

16-13

2017 to Q2 2018 Lower Montney

Drilled and Completed Wells

Wells Planned for 2018

Dawson-Parkland Interconnect

01-10

12-31

03-15

• Development activities at Dawson and

Parkland will underpin condensate

production growth at Dawson Phase III,

which has liquids-handling capacity of

7,500 bbl/day

• Dawson-Parkland interconnect is

expected to be in service by late 2018

and will allow ARC to invest in Lower

Montney wells at Dawson and Parkland

on the basis of profitability

• Progress infrastructure upgrade at

Dawson Phase I & II to accommodate

additional liquids production

0

50

100

150

200

0 200 400 600 800 1,000 1,200

Cu

mu

lati

ve

Oil &

Co

nd

en

sate

Pro

du

cti

on

(M

bb

l)

Days on Production

Cumulative Oil & Condensate Production (1)

Attachie 13-14 Attachie B13-26 Tower 7-12 West Pad Average Attachie 16-16 Parkland F11-04

ARC’s Parkland Delivering Strong Lower Montney Results

Parkland Lower Montney Well Has Similar Free Liquids Production to the Best Wells at Tower and Attachie

Attachie 13-14

(Upper Montney, ~1,950 m)

Attachie B13-26

(Upper Montney, ~1,900 m)

Tower 7-12 West Pad Average

(Upper Montney, ~2,500 m)

Parkland F11-04

(Lower Montney, ~2,400 m)

Attachie 16-16

(Upper Montney, ~2,800 m)

“The Beast”

(1) Lengths in meters noted are lateral well lengths.

ARC’s Dawson Phase IV Cash Flow Model

Development Timeline:

• 2018 to 2020: Facility and infrastructure spending

• 2019 to 2020: Pre-drill ~36 wells to fill facility

• 2021: Drill ~10 wells per year to sustain business

As With Each Project ARC Advances, Dawson Phase IV Will Generate Significant Free Cash Flow and Strong Full-cycle Returns

Field Netback

Capital Expenditures, excluding Facility Expenditures

Facility Expenditures

Production

Net Cash Flow

Dawson Phase IV

Gas Processing Capacity: 90 MMcf/day

Liquids-handling Capacity: 7,500 bbl/day

On-stream: 2020

-30,000

-25,000

-20,000

-15,000

-10,000

-5,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

($150,000,000)

($100,000,000)

($50,000,000)

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

-30,000

-25,000

-20,000

-15,000

-10,000

-5,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

($150,000,000)

($100,000,000)

($50,000,000)

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

201

7

201

8F

201

9F

202

0F

202

1F

202

2F

202

3F

202

4F

202

5F

202

6F

202

7F

202

8F

202

9F

ARC Has a Premium Oil & Liquids Production Mix

• 90% of ARC’s liquids production is made up of premium light oil and condensate

68% of ARC’s H1 2018 Sales Revenue Was Derived from Oil & Liquids Production

69%

11%

19%

1%

ARC’s Crude Oil & Condensate Production Mix

Light ( > 35° API )

Medium ( 25° to 35° API )

Condensate ( > 50° API )

Heavy ( < 25° API )

Crude Oil & Condensate Benchmark Pricing

25

35

45

55

65

75

Jul-

16

Oct-

16

Jan

-17

Ap

r-1

7

Jul-

17

Oct-

17

Jan

-18

Ap

r-1

8

US

$/b

arr

el

Mixed Sweet Blend WTI

Condensate Western Canadian Select

Ju

n-1

8

ARC Manages an Advantaged Diversification Strategy

• Less than 5% of ARC’s expected total sales revenue is exposed to AECO and Station 2 for the remainder of 2018

ARC Is Physically and Financially Diversifying to Downstream Markets to Manage Risk and to Achieve Optimal Pricing

Realized Gains on Risk Management Contracts

Diversification Activities

Average Price before Diversification Activities

$2.04 $2.17 $2.18

$1.28

$0.19

$0.39 $0.32

$0.63

$0.92

$0.78 $0.74

$1.05

$3.15$3.34

$3.24

$2.96

0.00

1.00

2.00

3.00

4.00

2016 2017 Q1 2018 Q2 2018

Cd

n$

/Mc

f

ARC’s Corporate Natural Gas Price ARC’s Natural Gas Diversification (1)(2)

(1) Based on production assumptions for sanctioned projects.

(2) “Hedged” includes all physical and financial fixed price swaps and collars at AECO, Station 2, and Henry Hub.

Hedged

Midwest US Floating

Dawn Floating

AECO Floating Station 2 Floating

Henry Hub Floating Pac-NW US Floating

37%

23%15%

2%

17%23%

8% 7% 11%

34%26% 19%

9%19%

21%

6% 4% 7%4% 4% 4%

0%

25%

50%

75%

100%

Bal 2018 Cal 2019 Cal 2020

% o

f To

tal P

rod

ucti

on

Total Forecasted Inflows & Outflows (1)

2017 to 2019

ARC Can Sustain the Business at Low Prices

Disposition Proceeds Have Given ARC the Ability to Counter-cyclically Invest in Growth Projects

Capital Efficiencies

$10,000/boe/day

Capital Efficiencies

$15,000/boe/day

ARC can sustain the

business in a

US$50/bbl WTI &

Cdn$1.50/GJ AECO

price environment

Funds from Operations

(~60% Oil & Liquids) ~$200 million/year

Funds from Operations(~40% Gas) ~$400 million/year

Net A&D Proceedsand

Excess Funds from Operations

Dawson Phase IIISunrise Phase II

Dawson Phase IV

Sources of Cash Dividend Sustaining Capital Growth Capital

(1) Sustaining and growth capital expenditures are before land and net property acquisitions and dispositions.

ARC Is Positioned for Continued Long-term Profitability

Low Sustaining Capital Requirements, Efficient Investment of Growth Capital and Low-cost Funding Decisions Lead to Profitability

ROACE of 10% since Inception

(10%)

0%

10%

20%

30%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Return on Average Capital Employed (1)

ROACE

Trailing Three-year 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.

ARC Is Committed to Strong ESG Performance

• In 10 years of formal sustainability reporting, ARC has achieved the following:

• 47% reduction in recordable injury rates for employees

• 43% reduction in greenhouse gas intensity

• 31% increase in the percentage of women in supervisory or professional positions

ARC’s Leadership Culture Is Reflected in Its ESG Practices

Recognitions and Rankings:

• MSCI Global Sustainability Index

• Jantzi Social Index

• FTSE Russell’s FTSE4Good Index Series

• CDP Participant for nine consecutive years

• Joined the 30% Club in 2018

• Globe and Mail Board Games (Ranked 26 out of 242 companies with a score of 90/100)

• Brendan Wood International (Ranked #1 in peer group for Confidence in Corporate Strategy in 2018)

• 2016 Canadian Coalition for Good Governance: Best Disclosure of Corporate Governance and Executive Compensation Practices

• 2017 & 2018 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 (2018 only)

• 2017 IR Magazine Global Top 50

For more information, visit www.arcresponsibility.com

Why Invest in ARC?

A Differentiated Investment with Tremendous Opportunity

• 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

Development

• Free Cash Flow

• Per Share Growth

• Sustainable Dividend

Montney and Cardium Project Potential

(boe/day)

2017

Competitive Cost

Structure

Profitable

Investment

Deep Project

Inventory

Long-term

Value Creation

Base Production

• Montney

• Cardium

Project Options – Next Five Years

Sanctioned:

• Sunrise II

• Dawson IV

Next Decade

• Sunrise III

• Septimus I & II

• Attachie West II

• Attachie Central I & II

• Attachie East I & II

• Pouce Coupe

• Sundown

Follow-on Options:

• Attachie West I

• Ante Creek II• Parkland/Tower III

• Dawson V