Plant Additions with production opportunity

Sunrise (Add 40 MMcf of Plant)               Gas Processing capacity                             300 MMcf day Capacity
Sunrise added 40 MMcf of gas processing to the facility, which is about a 15% increase in production and will bring the capacity of the facility close to 300 MMcf. The production at sunrise is primarily dry gas and they would be considered a full cycle addition of roughly 6666 boe/day. Should show up in Q3 numbers.

300   Gas  MMCF
0.0    NGL       Boe/day
0.0    Condensate  

CF boe = 3.40 * 6 = $20.40 boe

Last Quarter Production total = 43,242   (Likely see a increase to 50,000 boe/day)
 
Greater Dawson
Add (10 MMcf of sour gas processing), This is because of the resource ARC want to exploit that is a little bit sour in the play area. Greater Dawson play is really the grouping of 6 individual play areas.
  1. Tower
  2. Septimus
  3. Parkland
  4. Sundown
  5. Dawson
  6. Pouce Coupe
427.5     Gas  MMCF                  $3.40     78.10%
8439      NGL       Boe/day          $30.0       9.25%
11533    Condensate                  $95.00   12.64%

CF boe =    (3.40*6)*78.10 + 9.25%*30 + 12.64%*96  = $30.71 cents boe

Last Quarter Production total = 91219   (Likely see production at 100,000 boe/day in Q3)
 
Kakwa                                                                                                     Gas Processing Capacity 1010 MMcf
Kakwa is currently being studied by ARC engineer in pursuit of 2% annual decline efficiencies. Production declined in the Second quarter; the company objective is to hold production flat.
437.6    Gas  MMCF                     $3.40     42.18%
39633      NGL       Boe/day         $30.0       22.9%
60319    Condensate                 $95.00   34.88%

CF boe =    (3.40*6)*42.18% + 22.9%*30 + 34.88%*95  = $48.61  boe

Last Quarter Production total = 172890   (Likely see production at 180,000 boe/day targe)

Gas plant utilization is roughly 437.6/1010 = 43.333

Once engineering has completed it investigation regarding declines ARC will be able to pursue the filling the gas plant on a 1/2 cycle cost basis, and if the production mix remains the same that could add potentially 226,000 boe of half cycle production to the Kakwa Area.

Kakwa by itself could increase production to 400,000 boe a day with no gas plant build out if the production mix remained the same.


ARC has a clear line of sight to 575,000 boe a day, with zero requirement for full cycle capital expenditures.