Production averaged 73,954 boe per day for the full year, but a better representation of our growth is the 84,686 boe per day achieved in the fourth quarter of 2010. This represents a 35 per cent increase over the 62,520 boe per day produced in the fourth quarter of 2009. The gains in production derive from both our development activities and from our strategic acquisitions. The highlight of the year was the safe start-up of our first 60 mmcf per day gas plant at our Dawson field in northeast British Columbia. This plant has proven to be very reliable, with production consistently above 60 mmcf per day. A second 60 mmcf per day plant is currently under construction with start-up planned for the second quarter of 2011. Another material highlight was the successful acquisition and integration of Storm, which closed in August. This acquisition significantly expanded our presence in the Montney gas play as Storm’s primary asset was the Parkland gas field, located just 10 kilometers from our Dawson operations. An important aspect of the Parkland field is that it is liquids rich, which substantially enhances revenue in the prevailing weak natural gas price environment. 

As we move into new areas we are constructing large facilities that require longer cycle times. These projects involve construction of infrastructure such as gas plants and expanded gathering facilities. For example, we are currently placing orders for equipment for an Ante Creek gas plant that is due to start-up in early 2012. We are also planning for new emerging areas such as Parkland, West Montney and Attachie for production in future years. 

ARC has an extensive array of value creating opportunities within its asset base and we are planning to execute a $625 million capital program in 2011. We are directing $224 million to our Montney development in northeast British Columbia as a significant portion of ARC’s production growth is targeted from that area. When we purchased Dawson in 2003, the field was producing approximately 20 mmcf per day – we estimate that by the second quarter of 2011, we will be producing 165 mmcf per day from Dawson. The Montney gas area will keep us busy over the next three to five years as we plan to build at least two more gas plants, most likely in 2013 and 2014. In 2010, we purchased an additional 90 contiguous sections of land in northeast British Columbia in an area called Attachie, which is northwest of our Dawson field. This is a prospective land base and we plan to drill five wells during 2011 in Attachie to assess its potential for commercial production. ARC purchased additional lands in Attachie early in 2011, giving us a total of 101 sections. 

ARC’ ability to execute successful capital programs and provide consistently strong returns to our investors would not be possible without a team of highly skilled employees in every aspect of our business. ARC has used a counter-cyclical approach in hiring practices – when others in our industry reduced hiring because of a slo wer economy, we ramped up our hiring program and took advantage of the opportunity to add some highly-skilled talent to our existing complement of employees. We are just as disciplined in our hiring practices as we are with the development of our assets. Our focus in 2010 was to attract people to ARC who have the expertise and vision to develop the opportunities in our new areas. We provide our people with a dynamic corporate culture, where each person’s contribution to the success of our company is valued. Providing our employees the opportunity to develop their skills through education grants and formal training and development programs is a priority at ARC. As our company grows in numbers, we encourage our employees to look after each other from a safety perspective. All the activities undertaken and the results achieved can only be considered successful when they are executed safely and in an environmentally responsible manner. Our collective goal is always zero accidents and our health and safety policies and programs strive toward that objective. We continue to communicate our environmental strategies to our stakeholders and published a new Corporate Responsibility report (available on our website at www.arcresources.com) that details our goals, achievements and activities pertaining to environment, health and safety and community investment. 

We have grown from an enterprise value of $200 million in 1996 to an entity today and one of canada’s 60 largest, publicly traded corpor ations. $8 Billion 

