Annual Report - 2001 - ARC Resources Ltd.

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ACQUISITIONS AND DIVESTMENTS
ACQUISITIONS AND DIVESTMENTS
STARTECH ACQUISITION
The acquisition of Startech Energy Inc. completed in January 2001 was the
largest acquisition in ARC’s history and one that has provided tremendous new
opportunities in pre-existing and new focus areas. ARC’s daily production volumes
increased by 58 per cent and significant reserves and undeveloped land were added to
the Trust’s portfolio. Of particular importance was Startech’s major presence in southeast
Saskatchewan, an area that ARC had targeted as a strategic area for expansion. The
acquisition enabled ARC to gain a major foothold in this area, create an important new
focus area and acquire a portfolio of development opportunities.
OTHER ACQUISITIONS
As the cost of acquiring reserves and production increased over the remainder
of 2001, ARC focused on having the individual area teams seek opportunities within core
areas to acquire land and reserves at lower prices. Focused acquisitions in core areas
resulted in an additional 4.2 mmboe being purchased for $29.9 million.
DISPOSITIONS
Every year, ARC reviews its asset base to identify non-core assets for potential
disposition. Divested properties typically have higher operating costs, lower netbacks,
limited upside potential or marginal remaining reserve life that can create a near-term
abandonment liability.
As part of ARC’s active management of its asset base, a number of minor
non-core assets were sold in 2001 resulting in the disposition of 3.4 mmboe of reserves
for $21 million.
2001 Acquisition/Disposition Summary
Reserve
Production
Purchase/Sale Established Purchase/Sale Production Purchase/Sale Reserve
Price Reserves Price Rate Price Life Index
($ millions) (mmboe) ($/boe) (boe/d) ($/boe/d) (years)
Acquisitions 544.0 59.16 $ 9.20 15,539 $ 35,009 10.4
Dispositions (21.3) (3.40) $ 6.26 (1,024) $ 20,801 9.1
Net acquisitions 522.7 55.76 $ 9.37 14,515 $ 36,011 10.5
ARC ENERGY TRUST AR 2001