High Performers Continue to Yield Results
ARC established its presence in southeast Saskatchewan in 2001 through assets it acquired with Startech Energy Inc. These assets have been and continue to be high performers. Average daily production in SE Saskatchewan increased to 11,260 boe/d in 2006 from 10,676 boe/d in 2005.

and a source of opportunities. Largely through development drilling, the continued success of the Weyburn CO2 flood and minor acquisitions, ARC was able to increase production five per cent to 11,260 boe per day in 2006. In addition to ARC's operated activities on fields such as Lougheed, Weir Hill and Oungre, ARC is involved in the two commercial CO2 EOR projects in Saskatchewan - Midale and Weyburn. ARC has a 6.93 per cent interest in the EnCana operated Weyburn Unit where the CO2 flood was implemented in 2000 and a 15.5 per cent interest in the Apache operated Midale Unit where the CO2 flood was implemented in October 2005. The knowledge gained in partnering on these projects will allow ARC to transfer the science to pilot projects it is planning on some of its other CO2 amenable fields such as Pembina and Redwater.

ARC purchased assets in Manitoba in the Goodlands area late in 2006, which are incorporated into SE Saskatchewan for operating purposes. ARC added approximately 785 boe per day of production in the fourth quarter of 2006 through this acquisition. ARC has allocated $4 million for development opportunities on these assets in 2007. ARC plans to spend approximately $67 million in southeast Saskatchewan with drilling programs planned for Lougheed, Oungre, Weir Hill and other areas. With continued strong commodity prices, the drilling of these high productivity horizontal wells provides exceptional returns.

• Information updated to year end 2006

Superintendent: Ken McKellar
461 Devonian Street, Estevan, Saskatchewan S4A 2A3
Tel: (306) 637-3100-----Fax: (306) 634-6161