Annual Report - 2001 - ARC Resources Ltd.

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RESERVES
RESERVES
Based on an independent engineering evaluation conducted by Gilbert
Laustsen Jung Associates Ltd. (GLJ) effective December 31, 2001, ARC had proved plus
risked probable reserves of 386 bcf of natural gas and 114 mmbbls of crude oil and natural
gas liquids. Approximately 64 per cent of ARC’s reserves are crude oil and natural gas
liquids and 36 per cent are natural gas on a 6:1 boe conversion basis. Total reserves at
December 31, 2001 were 178.5 mmboe, an increase of 37 per cent from the previous year.
The following tables summarize ARC’s reserves of natural gas, crude oil, and
natural gas liquids as evaluated by GLJ. These reserves reflect ARC’s interest before
royalties. Probable reserves are risked at 50 per cent to calculate the established
reserves. All estimates of future net cash flow in these tables are calculated without any
provision for income taxes, general and administrative costs, or management fees, but
include provisions for future well abandonment liabilities.
Reserve Life Index (RLI) is calculated by dividing the reserves by annual
production (either current year annual production or the independent evaluator’s forecast
of the first year’s production). This provides a simplified representation of the number of
years of reserves remaining if production remained constant. The actual productive life of
the reserves is significantly longer due to a declining production rate over time. To
account for the impact and timing of acquisition and divestment activity, the tables use
the independent evaluator’s forecast of the first year’s production in determining RLI, as
this results in a more consistent representation over time.
ARC ENERGY TRUST AR 2001